2012 was a great year for all German brands we discuss here at GCF. Audi had a very successful year, selling approximately 1.45 million automobiles, which translates in 48.8€ billion revenue, 5.4€ billion operating profit and an operating return on sales of 11.0 percent, which is above the strategic target corridor of eight to ten percent. In late 2012 the Ducati brand was also added to the brand's portfolio, as 2012 was a year of many investments. Audi did also great in the US, setting new sales records in each month of 2012, but where Audi really excelled was China. Audi is expecting the growth to continue in 2013 despite the overall harsh economic climate and plans to recruit 1,500 additional employees in Germany alone.
According to BMW's CEO Dr. Norbert Reithofer, 2012 was the best year in the brand's corporate history, as the Group revenues rose by 11.7% to €76.8 billion, the EBIT was up 3.5% to €8.3 billion, the Profit before tax was 5.9% higher at €7.8 billion, the Group profit up was 4.4% to €5.1 billion, and there was an EBIT margin of 10.9% for Automotive segment. In total, the sales of BMW, MINI and Rolls-Royce automobiles rose in 2012 by 10.6% to a new high of 1,845,186 units. For 2013, BMW intends to continues the growth, even though the economic conditions are likely to remain challenging in many markets
2012 was a great year for Daimler as well, with an EBIT from ongoing business of €8.1 billion (2011: €9.0 billion). The Net profit was €6.5 billion (2011: €6.0 billion) and the Group revenue of €114.3 billion exceeded that of the prior year (2011: €106.5 billion). Both Mercedes-Benz Cars and Trucks posted an increase in sales and revenue, with the former selling 1,451,600 vehicles and the latter 462,000 vehicles. The Mercedes-Benz Vans sales, on the other hand, decreased to 252,400 vehicles, from 264,200 in 2011. Daimler AG's analysts expect the demand for automobiles to grow between 2 and 4% in 2013 mainly due to the Chinese market. The European one is expected to be stable, while the demand in Japan is expected to decrease.
Finally, VW's sales revenue grew by 20.9 percent to €192.7 billion. Most importantly, though, the Porsche brand has been wholly owned by Volkswagen since August 1, 2012 and Ducati has now joined the Group family, while the launch of the MQB platform was a major breakthrough in reducing the Groups R&D costs. Numbers-wise, tonsolidated operating profit rose slightly to a record €11.5 billion, not including the €3.7 billion proportional share of the operating profit recorded by the Chinese joint ventures. The return on investment for the Automotive Division was down slightly on the previous year at 16.6% (17.7% in 2011), primarily as a result of the increase in invested capital, but was still significantly above its minimum required rate of return of 9 percent. Deliveries climbed 12.2 percent to 9.3 million vehicles, with the Group’s global share of the passenger car market rising to 12.8 percent. The Volkswagen Passenger Cars brand delivered 5.7 million vehicles, an increase of 12.7 percent compared with the previous year. VW's CEO Dr. Winterkorn sees even more growth for 2013, hoping "that VW reaches the top of the automotive industry by 2018 – profitably, sustainably and permanently."
You can find all four press releases after the jump.
Source: [Audi], [BMW], [Daimler], and [VolksWagen]
Audi's Press Release
The Audi Group surpassed its targets for the year 2012. Despite the significant effects of the debt crisis in some countries and a contracting overall market in Europe, the company posted record figures for production, shipments, revenue and earnings. In the past financial year, the brand with the four rings sold more than 1.45 million automobiles and increased its revenue to €48.8 billion. The Audi Group was also able to increase its operating profit to €5.4 billion, a record result in the company’s history so far. In the full year, the operating return on sales of 11.0 percent was above the strategic target corridor of eight to ten percent. In 2013, the company intends to continue its growth and gain additional customers. In addition, the automobile manufacturer from Ingolstadt plans to recruit approximately 1,500 new employees in Germany alone, and will offer 700 young people an apprenticeship or traineeship.
Audi presented all of its key figures for the past financial year at its annual press conference held today at the company’s headquarters in Ingolstadt and attended by more than 300 international journalists. Rupert Stadler, the CEO of AUDI AG, stated: “2012 was a very successful year for us. We surpassed our targets and added an attractive premium brand, Ducati, to our brand portfolio. We intend to continue our growth in 2013 and with two new plants this year, we will create the right conditions to reinforce our claim to leadership over the long term.” As of 2016, Audi will produce the next generation of the Q5 at its new plant in San José Chiapa, Mexico.
2012 was another year of record figures for Audi: Worldwide, the company shipped 1,455,123 automobiles of the Audi brand (2011: 1,302,659). That represents growth of 11.7 percent or approximately 152,500 additional customers. The brand with four rings increased its revenue by 10.6 percent to €48,771 million (2011: €44,096 million).
Despite the increasingly difficult economic situation, the Audi Group slightly increased its operating profit to the new record figure of €5,380 million in 2012 (2011: €5,348 million). The operating return on sales of 11.0 percent (2011: 12.1 percent) was once again significantly above the target corridor of eight to ten percent.
Distribution costs amounted to €4,593 million in 2012 (2011: €3,599 million). The increase compared with the prior year is due to the larger sales volume and higher marketing costs, as well as the market launch of additional models and the implementation of strategic sales concepts such as Audi City in London and Beijing.
The Audi Group’s net financial income in the year under review amounted to €576 million (2011: €692 million). As a result, the Group posted profit before tax of €5,956 million (2011: €6,041 million).
The main return figures reflect the company’s strong profitability. They demonstrate that the Audi Group continues to be one of the world’s most successful automobile manufacturers. In addition to the operating return on sales of 11.0 percent, the return on sales before taxes reached the excellent level of 12.2 percent (2011: 13.7 percent). The return on capital was 30.9 percent (2011: 35.4 percent).
For Axel Strotbek, Board of Management Member for Finance and Organization at AUDI AG, the company’s high profitability reflects the success of the growth strategy. The CFO regards investing in the future as evidence of farsighted management: “We already initiated the biggest investment program in our history in 2011. We now plan total investment averaging more than €3.5 billion each year until 2015, in order to effectively pursue our growth path.”
The high investment volume of recent years is paying off. The new Audi Q3 was launched in the first markets in the fall of 2011 and was thus available for its first full year in 2012. In Europe alone, Audi handed over nearly 80,000 units of the compact SUV to customers. The Audi A6 Avant has also been at dealerships since the fall of 2011 and is responsible for strong growth impetus on the brand’s home continent. Sales of this large wagon increased in the region by 38.9 percent to approximately 63,100 automobiles in 2012. Across all models, the Audi brand sold about 739,000 cars in Europe last year, improving by a significant 1.8 percent compared with the prior year in a difficult market environment.
In the United States, the company set new sales records in each month of the year 2012, further accelerating the growth rates of 2011. And the brand with the four rings maintained its clear lead in the premium segment in China. The company’s global strategy showed positive results – Audi achieved record unit sales in more than 50 markets last year.
The company would not be able to meet its targets without highly motivated employees. The Board of Management therefore thanks all members of the Audi workforce for their efforts and commitment. Once again, the employees of AUDI AG will benefit from a profit share for last year: Employees at the German sites covered by collective pay agreements will receive an average profit share of €8,030. For the year 2013, AUDI AG plans to recruit 1,500 additional employees in Germany alone. And once again, approximately 700 young people will start an apprenticeship or traineeship at Audi this year.
The Audi Group anticipates a slight increase in revenue in the years 2013 and 2014. The development of earnings will profit not only from the targeted growth in unit sales, but also from the continuous improvements in productivity and processes initiated in the past, as well as from efficient corporate structures. Despite high expenditure for new products and technologies – in particular to fulfill stricter CO2 regulations all over the world and investments to expand the international production network – the company anticipates an operating return on sales at the upper end of the strategic target corridor of eight to ten percent.
New models of the Audi brand will help the company to achieve this goal. Last week, the automobile manufacturer from Ingolstadt continued its model offensive at the Geneva Motor Show, with the Audi A3 Sportback e-tron for example. The A3 sedan will also have its world premiere this year and will strengthen Audi’s position in strategically important markets such as the United States and China. And Audi has more sporty RS models in its product range this year than ever before. In addition to the RS 7 Sportback and the RS Q3, the RS 6 Avant and the RS 5 Cabriolet will also be launched in 2013.
BMW's Press Release
Munich. The BMW Group continued on its successful course in the financial year 2012. Group revenues increased year-on-year by 11.7% to reach a new record of € 76,848 million (2011: € 68,821 million). Despite higher expenditure on new technologies and increased personnel costs, earnings also climbed to new record levels. Profit before financial result (EBIT) increased by 3.5% to € 8,300 million (2011: € 8,018 million), while profit before tax (EBT) amounted to € 7,819 million (2011: € 7,383 million), an improvement of 5.9%. Group profit for the year went up by 4.4% to € 5,122 million (2011: € 4,907 million).
The total number of BMW, MINI and Rolls-Royce brand vehicles delivered to customers worldwide in 2012 rose by 10.6% to a new high of 1,845,186 units (2011: 1,668,982 units), thus enabling the BMW Group to maintain its position as the world's leading premium manufacturer.
“The past year has been the most successful year in BMW Group’s corporate history, with new high levels achieved for sales volume, revenues and Group earnings. We have achieved or surpassed all of our targets for 2012 in the face of very challenging market conditions", stated Norbert Reithofer, the Chairman of the Board of Management of BMW AG on Thursday in Munich.
Dividend to increase to € 2.50 per share of common stock
The Board of Management and the Supervisory Board will propose to shareholders at the Annual General Meeting on 14 May 2013 that the dividend be increased to € 2.50 (2011: € 2.30) per share of common stock and € 2.52 (2011: € 2.32) per share of preferred stock. Based on these figures, the total distribution will rise to € 1,640 million (2011: € 1,508 million), corresponding to a distribution ratio of 32.0% (2011: 30.7%). "The increased dividend reflects the BMW Group's excellent performance in 2012 as well as the underlying strength of its earnings and financial position" commented Friedrich Eichiner, member of the Board of Management responsible for Finance.
Automotive segment: EBIT rises to € 7.62 billion
The BMW, MINI and Rolls-Royce brands were all able to post new sales volume records in 2012. Automotive segment revenues went up by 11.0% to € 70,208 million (2011: € 63,229 million) thanks to the sharp rise in the number of vehicles sold. Segment EBIT edged up to € 7,624 million (2011: € 7,477 million/+2.0%), giving an EBIT margin of 10.9%. Profit before tax amounted to € 7,195 million (2011: € 6,823 million), an increase of 5.5% over the previous year.
Sales of BMW brand cars increased by 11.6% to 1,540,085 units (2011: 1,380,384 units), thus surpassing the mark of 1.5 million units for the first time in a single financial year. One major contributing factor for this success was the performance of the BMW 1 Series, sales of which rose by 28.6% to 226,829 units (2011: 176,418 units), making it the best-selling car in its own segment.
The success story of the BMW 3 Series also continues, with sales volume rising by 5.8% in 2012 to 406,752 units (2011: 384,464 units). The BMW 3 Series Sedan also headed its own segment with 294,045 units (2011: 240,279 units/+22.4%) sold during the past year. With a sales volume of 359,016 units sold (2011: 332,501 units/+8.0%), the BMW 5 Series also retained pole position in its segment. The BMW 6 Series performed extremely well with 23,193 units sold (2011: 9,396 units/+146.8%).
The various models of the BMW X family also performed well in 2012. Sales of the BMW X1 grew by 16.9% to 147,776 units (2011: 126,429 units), making it the best-selling model in its segment. The BMW X3 also registered sharp growth (27.1%) with 149,853 units sold (2011: 117,944 units). The BMW X5 and BMW X6 posted sales volumes of 108,544 units (2011: 104,827 units/+3.5%) and 43,689 units (2011: 40,822 units/+7.0%) respectively.
The MINI brand surpassed the sales volume threshold of 300,000 units for the first time in a single year with the number of cars sold up by 5.8% to 301,526 units (2011: 285,060 units). The MINI Countryman put in an extremely strong performance and recorded a 14.9% increase to 102,271 units (2011: 89,036 units). Sales of the MINI Coupé rose to 11,311 units (2011: 3,799 units), almost tripling the volume recorded one year earlier. In terms of model mix, 44.5% of customers opted for the MINI Cooper, 35.7% for the MINI Cooper S and 19.8% for the MINI One.
Rolls-Roycewas the clear market leader in the ultra-luxury segment in 2012. In total, 3,575 units were sold during the year (2011: 3,538 units/+1.0%), with demand particularly strong for the Phantom and Ghost models.
The BMW Group was able to increase sales volume figures in almost all of the regions in which it is active. The number of vehicles sold in Europe, the Group's largest sales market, edged up by 0.8% to 865,417 units despite the difficult business conditions prevailing in many countries.
Sales volume in Asia jumped by 31.4% to 493,393 units, including 327,341 BMW and MINI brand cars sold in China (excluding Hong Kong and Taiwan), giving an increase in this market of 40.1%. This was the first time that the BMW Group has sold more than 300,000 vehicles in China in a single year. In Japan, the number of cars sold rose by 19.0% to 56,701 units.
Good growth was also achieved in the Americas, with sales volume running 11.8% higher at 425,382 units. Sales in the USA climbed by 13.8% to 348,532 units, enabling BMW to remain the leading premium manufacturer in this market.
Motorcycles segment also achieves sales volume record
117,109 BMW and Husqvarna brand motorcycles were sold worldwide during the past year (2011: 113,572 units/+3.1%), a new sales volume record for the segment.
Sales of BMW brand motorcycles went up by 2.0% to 106,358 units (2011: 104,286 units), while Husqvarna handed over 10,751 motorcycles to customers (2011: 9,286/+15.8%). In future, the Motorcycles segment intends to focus exclusively on the BMW brand. At the end of January 2013, the BMW Group signed a contract with the Austrian company, Pierer Industrie AG, for the sale of Husqvarna.
Segment revenues were 3.8% higher at € 1,490 million (2011: € 1,436 million). EBIT, however, fell to € 9 million (2011: € 45 million/-80.0%) as a result of the new direction now being taken for the BMW Group's motorcycles business. Profit before tax decreased accordingly to € 6 million (2011: € 41 million/- 85.4%).
Financial Services segment remains on growth course
The Financial Services segment continued to perform well in the past year. Revenues grew by 11.7% to € 19,550 million (2011: € 17,510 million). Profit before tax amounted to € 1,561 million (2011: € 1,790 million/-12.8%), whereby the decrease in segment earnings is primarily a reflection of the previous year's extremely high figures: in 2011, the segment recorded exceptional income of € 439 million resulting from the reduction in provisions for residual value and bad debt risks. Business with end-of-contract leasing vehicles gave rise to an exceptional gain of €124 million in 2012.
The number of new lease and credit financing contracts signed worldwide (1,341,296) was 12.1% up on the previous year. The number of lease and financing contracts in place with dealers and retail customers at the end of the year rose by 7.1% to a total of 3,846,364 contracts.
Workforce grows by 5.6%
The BMW Group’s workforce increased sharply 2012, rising by 5.6% to 105,876 employees. The BMW Group continues to recruit staff, in particular engineers and skilled workers, in order to keep pace with ongoing strong demand for BMW Group cars, push ahead with innovations and develop new technologies.
BMW Group in the fourth quarter 2012
BMW Group revenues rose in the fourth quarter by 11.9% to € 20,536 million (2011: € 18,349 million). EBIT increased by 14.1% to € 1,894 million (2011: € 1,660 million) and the profit before tax by 32.9% to € 1,779 million (2011: € 1,339 million). Profit after tax amounted to € 1,207 million (2011: € 879 million), an improvement of 37.3%. The total number of BMW, MINI and Rolls-Royce brand vehicles delivered to customers in the period from October to December grew by 16.8% to 509,684 units (2011: 436,398 units).
Automotive segment revenues increased by 15.8% in the fourth quarter to € 19,496 million (2011: € 16,838 million). EBIT rose sharply to € 2,076 million (2011: € 1,542 million/+34.6%) and profit before tax jumped by 63.4% to € 1,921 million (2011: € 1,176 million). The EBIT margin for the Automotive segment was 10.6%.
Fourth-quarter Motorcycles segment revenues increased by 7.5% to € 274 million (2011: € 255 million). The segment reports negative fourth-quarter EBIT of € 73 million (2011: negative EBIT of € 17 million) and a pre-tax loss of € 74 million (2011: pre-tax loss of € 19 million).
Financial Services segment revenues increased by 2.0% in the final quarter of 2012 to € 4,968 million (2011: € 4,870 million). Segment EBIT improved by 3.9% to € 267 million (2011: € 257 million) and the profit before tax by 3.0% to € 271 million (2011: € 263 million).
BMW Group forecasts further sales volume growth in 2013
The BMW Group intends to continue on its growth course in the current year. "We are again targeting further sales volume growth worldwide in 2013 and hence a new record level for deliveries. However, economic conditions are likely to remain challenging in many markets", commented Reithofer. "The BMW Group is preparing for tomorrow's technological challenges and is setting the course for further growth and profitability", he added.
Supervisory Board
The Supervisory Board proposes that Supervisory Board members Prof. Renate Köcher, Prof. Reinhard Hüttl, and Dr. Karl-Ludwig Kley be reelected for a mandate period of five years. It also proposes that Chairman of the Supervisory Board Prof. Joachim Milberg be reelected for a mandate period of three years; with the consent of the Supervisory Board, should he be elected, Prof. Milberg will stand again for the position of Chairman.
Daimler AG's Press Release
Stuttgart/Germany – Daimler AG (stock-exchange symbol DAI) today presented its preliminary and unaudited figures for the Group and its divisions for the year 2012.
Daimler achieved EBIT of €8.6 billion in 2012 (2011: €8.8 billion). EBIT from the ongoing business amounted to €8.1 billion (2011: €9.0 billion).
“The past financial year was overall a strong year for Daimler with some great achievements, but also with clear potential for improvement. We achieved new records for unit sales and revenue at both the Group and Mercedes-Benz Cars, and launched new products in all divisions to the market, which received excellent response” stated Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars.
“Notwithstanding our success and the numerous pioneering investments in 2012, it is a fact that we did not reach our own targets for earnings and profitability,” Zetsche pointed out. “To ensure that our future growth is even more profitable, we have implemented detailed measures in all divisions that will further increase our efficiency.”
The Group’s net profit amounted to €6.5 billion (2011: €6.0 billion), including the gain on the sale of 7.5% of the shares of EADS. Earnings per share amounted to €5.71 (2011: €5.32).
Daimler wants its shareholders to participate appropriately in the company’s success once again in 2012. In view of the earnings achieved and the business development in 2012, the Board of Management and the Supervisory Board will propose the distribution of a dividend of €2.20 per share at the Annual Shareholders’ Meeting to be held on April 10, 2013 (prior year: €2.20). This represents a total dividend payout of €2,349 million (prior year: €2,346 million).
“With this dividend continuity, we are emphasizing the attractiveness of our shares and expressing our gratitude to the shareholders for their trust in our company,” stated Bodo Uebber, Member of the Board of Management of Daimler AG for Finance, Controlling and Daimler Financial Services.
Financial year 2012
Despite partially difficult market conditions, the development of earnings reflects ongoing growth in unit sales at Mercedes-Benz Cars and Daimler Trucks. Daimler Buses and Mercedes-Benz Vans posted lower unit sales, however. A shift in the regional structure of unit sales, a less favorable model mix and higher expenses in connection with the expansion of Mercedes-Benz Cars’ product portfolio and the current product offensive at Daimler Trucks also had a negative 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 posted earnings at the prior-year level. The development of exchange rates had an overall positive impact on Group EBIT.
EBIT also includes significantly higher expenses in connection with the compounding of non-current provisions (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.
As previously announced, Daimler further increased its
unit sales. Sales of 2.2 million vehicles were 4% higher than in 2011. Mercedes-Benz Cars and Daimler Trucks were responsible for the growth, while the Mercedes-Benz Vans and Daimler Buses divisions did not match their unit sales of the prior year. The Group’s
total revenue improved by 7% to €114.3 billion; adjusted for exchange-rate effects, there was an increase of 4%.
The
net liquidity of the industrial business amounted to €11.5 billion at December 31, 2012 (2011: €12.0 billion).
The
free cash flow of the industrial business amounted to €1.5 billion in 2012. The positive profit contributions of the industrial business were offset by the increase in working capital, defined as the net change in inventories, trade receivables and trade payables, in a total amount of €0.8 billion. High investments in property, plant and equipment and intangible assets as well as capital contributions to Engine Holding and the joint venture of Daimler Trucks in China led to cash outflows. There was an additional effect from first-time pension contributions at EvoBus. Other positive effects resulted from the sale of shares in EADS and MBtech Group.
As of December 31, 2012, the Daimler Group employed a total
workforce of 275,087 people. Due to the significant increase in business volumes, the workforce grew by 3,717 persons. While the number of employees in Germany decreased slightly to 166,363 (2011: 167,684), there was growth in the United States to 21,720 (2011: 20,702). At year-end, 14,610 people were employed in Brazil (2011: 14,533) and 11,286 in Japan (2011: 11,479). The number of persons employed by the consolidated subsidiaries in China increased to 2,730 (2011: 2,121). In addition, there were 16,383 (2011: n. a.) persons employed by Daimler’s non-consolidated associated companies in China, of which 9,048 (2011: 7,204) work at Beijing Benz Automotive Corporation (BBAC), 1,543 (2011: 2,003) at Fujian Benz Automotive Corporation (FBAC) and 5,530 (2011: n. a.) at the joint venture Beijing Foton Daimler Automotive (BFDA).
Investments in the future
Based on Daimler’s “Road to Emission-free Mobility” strategy, the main focus of work was in the area of new, extremely fuel-efficient and environmentally friendly drive technologies in all automotive divisions. Work was carried out on optimizing conventional drive technologies as well as on achieving further efficiency improvements through hybridization and with electric vehicles using fuel cells or batteries. In order to further enhance the efficiency of its vehicles, Daimler is also improving other key automotive aspects - from energy management to aerodynamics and lightweight construction. Another focus of activities is on new safety technologies and accident-free driving.
As in the prior year, Daimler therefore invested the very large amount of €5.6 billion in research and development in 2012 (2011: €5.6 billion). Total research and development expenditures at Mercedes-Benz Cars of €3.9 billion once again exceeded the high level of the prior year (2011: €3.7 billion). Daimler Trucks invested €1.2 billion in research and development projects (2011: €1.3 billion).
In 2012, Daimler once again significantly increased its investment in property, plant and equipment to €4.8 billion (2011: €4.2 billion). Of that total, €3.3 billion was invested in Germany (2011: €2.7 billion).
The focus was on extensive capital expenditure on local production facilities, new products and new technologies. One main area within Mercedes-Benz Cars was the expansion of production capacities for the new compact-class models at the Rastatt plant in Germany and at the new plant in Kecskemét, Hungary. In Sindelfingen, Daimler invested in preparations for production of the new S-Class. In Tuscaloosa, USA, and Bremen, Germany, preparations are already under way for production of the new C-Class as of 2014. At Daimler Trucks, the main areas of investment were the new Mercedes-Benz Antos, the new heavy-duty construction-site truck Arocs, and various projects for global harmonization and standardization of engines and main components and for the fulfillment of stricter emission regulations. Daimler also invested in expanding its production capacities in Brazil and at the new plant in India, where trucks of the new BharatBenz brand have been rolling off the production line since mid-2012. At the Mercedes-Benz Vans division, the focus of investment was on the new Citan small van and the successor generation of the Vito goods van and the Viano passenger van. Daimler also invested in the production and marketing of the Sprinter in Argentina and in the expansion and modernization of the sales organization. The main investments at Daimler Buses in 2012 were in new products and the modernization of production facilities.
Details of the divisions
Mercedes-Benz Cars, comprising the brands Mercedes-Benz, Maybach and smart, sold 1,451,600 vehicles in the year under review (2011: 1,381,400), and thus continued to grow. Revenue increased by 7% to a new record of €61.7 billion, although major markets weakened in the second half of 2012.
The division’s EBIT of €4,389 million was below the prior-year figure of €5,192 million. The return on sales was 7.1% (2011: 9.0%).
In an economic environment that became increasingly difficult during the year, unit sales developed well. Mercedes-Benz Cars achieved high growth rates in particular in the segments of compact cars and SUVs. In regional terms, the 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 the 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, higher expenses arose in connection with the compounding of non-current provisions.
In a difficult market environment,
Daimler Trucks was able to further increase its unit sales and revenue, with particularly strong growth in the NAFTA region and Asia. Daimler Trucks sold 462,000 vehicles during in 2012, which is 9% more than in the prior year. Revenue amounted to €31.4 billion (+9%).
The division’s EBIT of €1,714 million was below the prior-year figure (2011: €1,876 million). The return on sales was 5.5% (2011: 6.5%).
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. Furthermore, expenses arose from the compounding of non-current provisions. Earnings for the year include expenses of €70 million due to the natural disaster in Japan and an impairment charge on the investment in Kamaz (€32 million).
Worldwide unit sales by
Mercedes-Benz Vans decreased to 252,400 vehicles, due in particular to the difficult market situation in Western Europe (2011: 264,200). Revenue of €9.1 billion was also slightly below the prior-year level (2011: €9.2 billion).
The division achieved EBIT of €541 million in 2012 (2011: €835 million). Its return on sales was 6.0%, compared with 9.1% in the prior year.
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 sold 32,100 buses and bus chassis worldwide in 2012 (2011: 39,700). Revenue decreased accordingly by €0.5 billion to €3.9 billion.
Daimler Buses posted EBIT of -€232 million (2011: €162 million) and a return on sales of -5.9% (2011: 3.7%).
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’ business developed positively once again in 2012. New business increased by 14% to the new record of €38.1 billion. The division’s contract volume rose by 12% to €80.0 billion. Adjusted for exchange-rate effects, the increase was 13%.
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%).
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.
The
reconciliation of the divisions’ EBIT to Group EBIT comprises the proportionate share of the results of Daimler’s equity-method 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 Daimler’s investment in Renault (€110 million).
Outlook
According to current estimates, worldwide
demand for automobiles is likely to grow this year by approximately 2 to 4%. This growth should be primarily driven by the ongoing expansion of the Chinese market and a moderate increase in demand in the United States. No impetus is to be expected from the Western European market, however. Demand in Japan will probably decrease significantly, with a perceptible negative impact on the growth of the world market.
Worldwide demand for
medium and heavy trucks can be expected to increase perceptibly in 2013. However, this will mainly be driven by the significant recovery in China, which was responsible for a large proportion of the global drop in demand last year. In North America, a decline of 5 to 10% is anticipated as a result of uncertainty about the country’s fiscal problems. For the European truck market, demand is expected to fall by up to 5% due to the ongoing weak economic environment. The Japanese market should be at about the prior-year level, following the expiry of certain special effects in connection with the reconstruction there. A significant recovery of up to 10% is expected for the Brazilian market thanks to better economic prospects and the continuation of favorable financing conditions.
Mercedes-Benz Cars is consistently implementing its “Mercedes-Benz 2020” offensive. Numerous model changes and new products should ensure that the division achieves new records for unit sales in the years 2013 and 2014. A major contribution to this growth is likely to come from the new models in the high-volume compact-car segment. The third model based on the new compact-car architecture will be launched in April 2013: the CLA four-door coupe. Also starting in April, the new E-Class sedan and wagon will be available from Mercedes-Benz dealerships after a thorough upgrade. And as of mid-May 2013, the new E-Class coupes and convertibles will create additional sales impetus. In June 2013, the locally emission-free super sports car SLS AMG Coupe Electric Drive will be launched on the market. In the second half of 2013, Mercedes-Benz expects significant growth in the luxury segment, above all due to the launch of the all-new S-Class. As the most important new model of the year 2013, the new S-Class will set new standards with pioneering innovations for comfortable and safe driving, summarized under the heading of “Mercedes-Benz Intelligent Drive.” In addition, the Mercedes-Benz brand will also continue to profit in 2013 from the great market success of its models in the compact-car and SUV segments.
Within the framework of the long-term “Mercedes-Benz 2020” growth strategy, the product portfolio will be further expanded across all segments in the coming years. In the compact-car segment, a total of five new models will be added to the Mercedes-Benz product portfolio. In parallel, the model offensive will also be continued at the upper end of the automobile spectrum, for example with new models of the coming S-Class and with another SUV model version.
The smart brand expects good chances that the unique two-seater in the highly competitive micro-car segment will defy its advanced model lifecycle also in 2013, and will achieve unit sales in the magnitude of the prior year. The successor model of the two-seater, the new smart four-seater and the electric smart scooter will be presented in 2014.
Daimler Trucks anticipates a slight increase in unit sales in the year 2013 and further growth in 2014, although the development in 2013 will at first be rather moderate or even negative in some key markets due to the ongoing difficult economic situation. The introduction of stricter emission limits in 2014 is expected to cause some purchases to be brought forward to 2013. As a result of its extensive product offensive, Daimler Trucks not only has a complete model range of Euro VI trucks, but is also in a very good starting position in all relevant regions: A highly attractive, innovative product portfolio should allow Daimler to further strengthen its market position worldwide and to increase its share of important markets.
Unit sales should benefit from the complete availability of the Actros and Antos models and from other new models such as the Arocs for the construction sector and the new Atego. The strong North American products like the new Freightliner Cascadia Evolution in combination with the strong Detroit components should also make an important contribution to further growth. With a clear focus on profitable customer segments such as the construction and municipal segments within the framework of its “Vocational Strategy,” the truck division wants to utilize further market potential and extend its market leadership in North America.
The brands Fuso and BharatBenz will also make an important contribution to growth in unit sales in the coming years. The Fuso Canter and its hybrid version, which has been produced also in Europe since 2012, should stimulate additional demand. Fuso will extend its leading position in the field of “green innovation” with the new Canter Eco Hybrid and other technologies. Furthermore, Fuso is developing profitable export markets in the context of its growth offensive. In India, the range of BharatBenz trucks will be expanded to a total of 17 models in the weight classes from 6 to 49 metric tons by the year 2014, and the sales and service network will also be expanded. In Russia and China, Daimler Trucks is gradually intensifying its cooperation with local partners Kamaz and Foton, and is thus creating the right conditions for the further development of those growth markets.
Mercedes-Benz Vans plans to increase its unit sales in the years 2013 and 2014. On the product side, the new Mercedes-Benz Citan should contribute to this growth. Entering the market segment of small vans makes the division a full-range supplier and thus gives it additional growth potential in Europe. As of mid 2013, there will be demand stimulus from the upgraded Sprinter. As part of the “Vans goes global” strategy, Mercedes-Benz Vans is increasingly developing the markets outside Europe. It is therefore intensifying its sales activities especially in North America, Latin America, Russia and China. Furthermore, Mercedes-Benz vans are increasingly produced also locally: in Argentina and China, and production will begin also in Russia with the partner GAZ in the first half of 2013.
Daimler Buses assumes that it will be able to maintain its globally leading position in its core markets for buses above 8 tons with innovative and high-quality new products. Not least due to various major orders in advance of the soccer World Cup in 2014 and the Olympic Games in 2016, a rise in unit sales is anticipated in Brazil for the years 2013 and 2014. In Western Europe the division has launched excellent high-quality products in this stable key market: the new Mercedes-Benz Citaro and the new coach generation, the Setra 500. In order to realize further growth potential and to enhance competitiveness, Daimler Buses started the “GLOBE 2013” growth and efficiency offensive in 2012.
With its “DFS 2020” strategy,
Daimler Financial Services aims to achieve further profitable growth in the coming years. Key growth drivers are the expansion of business in Asia, the product offensives of the Daimler Group, and the further development of innovative mobility service packages. Worldwide, Daimler wants to gain larger numbers of young customers, who will be increasingly attracted with new models in the compact class and who are particularly open-minded with regard to financing and leasing offers. Daimler Financial Services sees additional growth opportunities in the field of innovative mobility services, where the service offering will be systematically expanded in the coming years – with and beyond car2go.
On the basis of assumptions concerning the development of automotive markets and the divisions’ planning, the
Daimler Group expects to achieve further growth in total
unit sales in the years 2013 and 2014.
Daimler assumes that
Group revenue will continue growing in the years 2013 and 2014. Although uncertainty regarding the future development of the Group’s markets tended to increase during the year 2012, numerous new products will be launched in the context of the growth strategy in the coming years. Furthermore, the Group will increasingly develop the growth markets of Asia, Eastern Europe and Latin America for its products – partially also through local production. The anticipated growth 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, Daimler assumes that growth rates will be above average in the emerging markets and in North America.
Daimler assumes that the development of major markets will at first remain weak in the first half of 2013, and therefore anticipates 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, earnings are expected 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, Daimler currently assumes that
Group EBIT from the ongoing business in 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, an improvement in operating profit is expected for all automotive divisions and for the Group. For Daimler Financial Services, a stable development of earnings is anticipated in the next two years.
In the medium term, Daimler aims to achieve an annual average return on sales in its 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, the target for return on equity is 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. Daimler therefore assumes that the targets will not be achieved as originally planned in the year 2013, but at a later date. In order to make sure it meets its profitability targets in the long term, Daimler is carrying out far-reaching programs to improve its efficiency and competitiveness in all divisions.
In the years 2013 and 2014, Daimler plans to spend a total of €10.8 billion on research and development activities and approximately €10.2 billion on property, plant and equipment. This means that research and development investment will remain at the high level of the years 2011 and 2012; capital expenditure on property, plant and equipment will once again exceed the already very high levels of the two previous years.
Due to the anticipated business development, production volumes will continue to grow in the years 2012 and 2013. At the same time, efficiency and thus also productivity will be significantly increased as a result of the programs being carried out in all divisions. Against this backdrop, Daimler assumes that it will be able to achieve its ambitious growth targets with a largely stable
workforce. New jobs will tend to be created in the international growth markets.
Volkswagen AG's Press Release
Wolfsburg, 14 March 2013 - The Volkswagen Group successfully mastered the challenges posed by a difficult market environment in 2012, again posting record vehicle sales, sales revenue and earnings. “Volkswagen is feeling the headwinds –especially in Europe. Nevertheless we remain guardedly confident”, said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, on Thursday during the presentation of the Company’s 2012 financial results.
The Volkswagen Group not only turned in a compelling operational performance in the past fiscal year – it also met its targets for major strategic projects: The Porsche brand has been wholly owned by Volkswagen since August 1, 2012 and Ducati, a legendary motorcycle brand, has now joined the Group family. A leading mobility group needs a strong commercial vehicles business – and the alliance between MAN, Scania and Volkswagen Commercial Vehicles means that the groundwork for this has been laid. The launch of the Modular Transverse Toolkit in 2012 ushered in a new era in passenger cars. In addition, Volkswagen became the first carmaker to commit to the CO2 target of 95g/km by 2020.
CFO Hans Dieter Pötsch was also satisfied with 2012. “We continued our successful course and further strengthened our market position thanks to our high profitability”, said Pötsch. “Our growing presence in all key markets, our outstanding brand portfolio, our attractive product range and our broad financial services offering combined with our sound finances and forward-looking management are contributing to the systematic implementation of our Strategy 2018.”
Group figures for 2012
The Volkswagen Group’s sales revenue increased by 20.9 percent in fiscal year 2012 to €192.7 billion (previous year: €159.3 billion). Consolidated operating profit rose slightly to a record €11.5 billion (€11.3 billion). The consolidated operating profit does not include the €3.7 billion (€2.6 billion) proportional share of the operating profit recorded by the Chinese joint ventures. These companies are included in the consolidated financial statements using the equity method and are therefore reflected in the Group’s financial result, which rose by €6.3 billion last year to €14 billion. The improvement in the financial result is primarily attributable to noncash effects of €12.3 billion from the final valuation of the put/call rights relating to Porsche as of July 31, 2012, as well as from the remeasurement of the existing shares of Porsche held at the contribution date. All in all, the Volkswagen Group’s profit before tax last year rose by approximately €6.6 billion to €25.5 billion. Profit after tax amounted to €21.9 billion (€15.8 billion).
In view of the Company’s continued success, the Board of Management and the Supervisory Board will be proposing to the Annual General Meeting on April 25, 2013 to increase the dividend to €3.50 (€3.00) per ordinary share and €3.56 (€3.06) per preferred share.
At 16.6 percent, the return on investment for the Automotive Division was down slightly on the previous year (17.7 percent), primarily as a result of the increase in invested capital, but was still significantly above its minimum required rate of return of 9 percent. The return on equity in the Financial Services Division declined slightly to 13.1 percent (14.0 percent). “We aim to safeguard the quality of our earnings for the long term. In this context, we will take care to further increase profitability in all regions and to establish ourselves on new growth markets”, said Pötsch.
Net liquidity in the Automotive Division remained sound at €10.6 billion at the end of December 2012 (year-end 2011: €17.0 billion). This gives the Group the necessary financial stability and flexibility to systematically implement its Strategy 2018. Reasons for the decline include the contribution in full of Porsche’s automotive business, the acquisition of Ducati and the increased stake in MAN SE. The ratio of capital expenditure to sales revenue rose slightly (0.4 percentage points) to 5.9 percent. In addition to its production facilities, Volkswagen invested primarily in the expansion and ecological focus of its model range, and in the modularization of its vehicle concepts.
Brands and business fields
Despite the tough environment, the Volkswagen Group outperformed the market in 2012, growing in almost all key regions. Deliveries climbed 12.2 percent to 9.3 million vehicles. This saw the Group’s global share of the passenger car market rise to 12.8 percent
(12.3 percent).
The Volkswagen Passenger Cars brand delivered 5.7 million vehicles to customers, an increase of 12.7 percent compared with the previous year. The brand’s operating profit amounted to €3.6 billion (€3.8 billion), down 4.1 percent year-on-year. This was due in part to upfront expenditures for the Modular Transverse Toolkit and startup costs for the new Golf.
2012 was another record year for the Audi brand, which delivered 1.5 million (1.3 million) vehicles. Operating profit rose slightly by 0.6 percent to €5.4 billion (€5.3 billion) and the brand’s operating return on sales was 11.0 percent (12.1 percent).
ŠKODA’s sales increased by 6.8 percent to 939,000 (879,000) vehicles. At €712 million (€743 million), operating profit was down slightly on the prior-year figure due to market factors.
Deliveries by the SEAT brand declined by 8.3 percent in 2012 to 321,000 (350,000) cars. The operating loss was cut by €69 million to €156 million.
Bentley delivered 8,510 (7,003) vehicles, 21.5 percent more than in 2011. Its operating profit climbed to €100 million (€8 million).
Sports car manufacturer Porsche sold 60,000 vehicles and generated an operating profit of €946 million in the five months of its full consolidation in the Volkswagen Group (from August 1, 2012).
Volkswagen Commercial Vehicles delivered 550,000 (529,000) units, an increase of 4.1 percent. Operating profit declined by 6.1 percent to €421 million (€449 million).
Scania recorded a 15.9 percent decline in deliveries to 67,000 (80,000) trucks and buses. Its operating profit declined from €1.4 billion to €930 million. MAN delivered 134,000 trucks and buses and reported an operating profit of €808 million.
Volkswagen Financial Services generated an operating profit of €1.4 billion (€1.2 billion) in 2012. The division signed 3.8 million new finance, leasing and service/insurance contracts around the world, 21.0 percent more than in the previous year.
Outlook
Volkswagen is starting 2013 from a position of strength, despite tougher competition and difficult economic conditions. Excluding MAN and Scania, 1.4 million vehicles were delivered worldwide in the first two months of the year. At 8.3 percent, the Group grew more strongly than the market. “Volkswagen has everything it needs to continue its successful trajectory of recent years even under different circumstances”, said Winterkorn, adding: “We want to lead the Volkswagen Group to the top of the automotive industry by 2018 – profitably, sustainably and permanently.” In 2013, the Volkswagen Group’s brands will launch a large number of fascinating new models and so help further expand its strong position on the global markets.
Winterkorn was guardedly confident that the Group will outperform the market as a whole and deliveries to customers will increase. However, Volkswagen is not completely immune to the intense competition and the impact this has on business. The modular toolkit system, which is being continuously expanded, will have an increasingly positive effect on the Group’s cost structure. The Volkswagen Group’s 2013 sales revenue is expected to exceed the prior-year figure.
Given the ongoing uncertainty in the economic environment, the goal for operating profit is to match the prior-year level in 2013. Positive effects from its attractive model range and strong market position will be curbed by increasingly stiff competition in a challenging market environment. Disciplined cost and investment management and the continuous optimization of Volkswagen’s processes remain an integral part of the Strategy 2018.
