MERCEDES-BENZ

Company suffers strong 28% drop in profits in 2018 and expects cost increase in 2019

"For Daimler, 2018 was a year of strong opposing winds and this was reflected in our financial results and our share earnings." This is how Dieter Zetsch, Mercedes Ceo and Daimler, presented the drop in profits that Daimler experienced in 2018: despite a growth in sales to 167.4 billion euros (164.2 billion euros in 2017), net income in 2018 fell 28% to 7.6 billion euros (10, 6 billion in 2017). Thanks to this break, the dividend per share will be 3.25 euros versus 3.65 euros in 2017. But even more complicated was the decline in EBIT, which dropped from 14.3 billion in 2017 to 11.1 billion in 2018. Even so, Mercedes sold 2.4% more vehicles than in 2017 (3.4% versus 3.3 million units).
"We have, however, faced these contrary winds and made substantial progress in key areas of the future. It was not our best performance, but as with all divisions in the group, a profitable business is key to continuing to invest in new technologies and products for the future, "said Dieter Zetsche. However, Daimler took advantage of the fact that its credit rating is at level A with a stable outlook, to contract a credit line with a banking syndicate with more than 40 European, American and Asian banks of 11 billion euros, enough to have financial flexibility until 2025.
The Mercedes division (AMG, Maybach, Mercedes Me and smart) saw sales rise to 2 382 800 units (new record compared to 2017 which was 2 373 500 units), sales volume was 93.1 billion (EUR 94.4 billion in 2017) with EBIT falling to EUR 7,216 million (EUR 8,843 million in 2017). Operating margin declined to 7.8% when in 2017 it was 9.4%.
And Zetsch took the opportunity to leave a message for 2019: the strong investments that have to be made - offer of electrified variants on all models of the Mercedes and Smart ranges until 2022 with 130 variants ranging from hybrids with 48 volts, Plug In and electric plus the brand EQ - will have a negative impact on the results of 2019.
But with the new credit line, significant cash flow and ample cash reserves, Daimler is far from experiencing problems in the future. Also because if investments have penalized the final profit, others helped maintain the numbers, such as the investment in Aston Martin which was readjusted to a fairer value of 111 million euros.
Daimler believes that 2019 is a year of more sales growth, taking advantage of the comfort provided by 11% increase in sales in China, despite being a depressed market. Daimler changed the name of the financial division to Daimler Mobility, continuing the transformation into a mobility services company, while its urban mobility division ended in a merger with the same BMW division.
Finally, Daimler will go ahead with tests of autonomous driving with a totally autonomous "shuttle" that will operate in the cities of San José and San Francisco, in addition to investing more than 500 million euros in highly automated trucks that will circulate in the next 12 months. José Manuel Costa, direto de Portugal