Daimler Posts 24 Percent Profit Increase in 2017

Company expects even better results for 2018.

by on Feb.01, 2018

Daimler's Dieter Zetsche reported the company enjoyed its best year ever in 2017.

Daimler AG’s net profit increased by 24% to 10.9 billion euros, the company’s unit sales increased by 9%, and its revenues increased by 7% in best year in the company’s long history.

For 2018, Daimler executives said during the company’s annual press conference the it will be able to increase its overall unit sales on the strength of its “innovative” product portfolio in all divisions, the ongoing positive development of global automotive markets and its strengthening market position.

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On the basis of the positive development of unit sales, a slight increase in revenue is anticipated, they added.

While growth in unit sales and revenue will have a positive impact on the development of earnings, the continuation of very high advance expenditure for the model offensive and innovative technologies will dampen earnings growth, so the company anticipates Group EBIT in the magnitude of the previous year in 2018.

“The Daimler workforce has once again succeeded in breaking the records set in the previous year,” said Dieter Zetsche, chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars.

Mercedes-Benz once again captured the top spot in global sales among luxury brands.

(German automakers digging in for tough auto negotiations. Click Here for the story.)

“Our company stands for stable success in volatile times. But: stability is no justification for still stand. That’s why we are pushing forward with the transformation in all areas at Daimler.”

The Daimler Group achieved earnings before interest and taxes 14.7 billion euros in 2017, compared with 12.9 billion in 2016. The company’s net profit increased to a new record of 10.9 billion euros compared to 8.8 billion euros. Earnings per share also increased to 9.84 euros compared with 7.97 in 2016.

Daimler increased its unit sales in 2017 by 9% to 3.3 million vehicles, thus surpassing its growth target.

The Mercedes-Benz Cars and Mercedes-Benz Vans divisions all exceeded the forecasts made at the beginning of the year by recording significant growth. Daimler Trucks also posted a significant increase of 13% in unit sales.

At the beginning of the year, the division had anticipated unit sales similar to those of the previous year. The sales forecast was successively adjusted as a result of more favorable market developments in some important markets. Unit sales at Daimler Buses were also significantly higher than in the prior year.

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The development of earnings reflects primarily the very good situation of unit sales in the automotive segments. Accordingly, the Mercedes-Benz Cars division increased its earnings due in particular to further growth in unit sales, especially of the SUV models and the new E-Class.

Daimler Trucks also significantly improved its earnings compared with the previous year, mainly due to increased unit sales in the NAFTA region and the sale of real estate in Japan. Mercedes-Benz Vans and Daimler Buses achieved EBIT at the prior-year level. EBIT at Daimler Financial Services increased significantly. Exchange-rate effects had a net positive impact on operating profit.

“We have continued our trend of profitable growth and once again set new records for unit sales, revenue and earnings. In addition, we have further increased the funding of our pension plans with a contribution of €3 billion,” said Bodo Uebber, member of the Board of Management of Daimler AG responsible for Finance & Controlling and Daimler Financial Services.

“We have strengthened our core business and created an excellent starting position to master the challenges of the fundamental transformation of the automotive industry that lie ahead of us.”

The Board of Management and the Supervisory Board will propose to the Annual Shareholders’ Meeting to be held on April 5, 2018 that the dividend per share for the 2017 financial year be increased to 3.65 euros from the previous year’s 3.25 euros.

(To see more about Mercedes-Benz coming out on top of the luxury vehicle sales battle, Click Here.)

“We are proud of the best year in the company’s history. We want our shareholders to participate in this success and are proposing the biggest dividend in the company’s history,” said Uebber.

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