One of the reasons for the reduction in earnings at Mercedes-Benz cars was reduced pricing in China.
Daimler AG posted a net profit of €1,416 million in the first quarter of 2012, a 20% increase year-over-year on revenue that increased 9% to €27.0 billion. Earnings per share rose to €1.25 from €0.99 in the first quarter of 2011. EBIT of €2,130 million in the first quarter of 2012 was only slightly higher than the high prior-year level (Q1 2011: €2,031 million).
Daimler said the increase came from the ongoing growth of unit sales at Mercedes-Benz Cars and Daimler Trucks. In the first quarter of 2012, the Daimler Group sold a total of 502,100 cars and commercial vehicles worldwide, up 9% from Q1 2011. Daimler expects to sell more than 2.1 million vehicles globally during 2012.
Despite higher investment in future growth and a challenging market environment, we succeeded in surpassing the very good prior-year results in terms of unit sales, revenue, EBIT and net profit,” said Dieter Zetsche, Chairman of the Board of Management of Daimler AG.
Mercedes-Benz Cars posted record sales of 338,000 in the first quarter of 2012, a 9% increase year-over-year. First-quarter revenue increased by 8% to €14.9 billion. With EBIT of €1,252 million, Mercedes-Benz Cars was down from the prior-year period (Q1 2011: €1,288 million). The division’s return on sales was 8.4% (Q1 2011: 9.3%). One of the reasons for the reduction in earnings was reduced pricing in China.
Daimler Trucks increased its unit sales by 21% to 107,700 vehicles. Revenue rose by 18% to €7.4 billion (Q1 2011: €6.2 billion). The division’s EBIT of €383 million was lower than in the prior-year period (Q1 2011: €413 million). Return on sales was 5.2% (Q1 2011: 6.6%).
Unit sales by Mercedes-Benz Vans decreased in the first quarter of this year to 51,200 vehicles, primarily due to the market weakness in Western Europe (Q1 2011: 54,000). Revenue of €2.1 billion was above the prior-year level (Q1 2011: €2.0 billion). The division achieved an operating profit of €168 million (Q1 2011: €173 million). Return on sales amounted to 8.0%, compared with 8.8% in the first quarter of last year.
Worldwide unit sales of 4,900 buses and bus chassis by Daimler Buses were below the prior-year number of 7,700 units. As a result, revenue of €730 million was lower than in the prior-year period (Q1 2011: €831 million). The division’s EBIT was -€103 million (Q1 2011: -€33 million), primarily due to the decline in unit sales of 37%. A repositioning of the European business in the first quarter of 2012 led to charges of €36 million.
Daimler Financial Services sold 234,000 new leasing and financing contracts globally in Q1, worth a €8.3 billion, a growth of 20% compared y-o-y. Contract volume amounted to €71.6 billion at the end of the first quarter of 2012, even compared with the end of 2011. Adjusted for exchange-rate effects, there was an increase of 1%. The division achieved earnings of €344 million (Q1 2011 €321 million). The main reason for this positive development was the increased contract volume compared with the first quarter of last year. There was an opposing effect from lower interest margins.
Daimler’s share of the net profit of EADS in the first quarter of 2012 amounted to €133 million (Q1 2011: €74 million). The reconciliation also includes an expense at the corporate level of €35 million (Q1 2011: expense of €189 million).
Forecast: The following EBIT targets are for individual divisions:
- Mercedes-Benz Cars: at the prior-year level
- Daimler Trucks: at least at the prior-year level
- Mercedes-Benz Vans: at least at the prior-year level
- Daimler Buses: below the prior-year level
- Daimler Financial Services: slightly below the prior-year level
For the automotive business, Daimler said it wants to achieve an annual average return on sales of 9% across market and product cycles. This is based on targeted returns on sales for the individual divisions, to be achieved on a sustained basis by 2013, of 10% for Mercedes-Benz Cars, 8% for Daimler Trucks and 9% for Mercedes-Benz Vans. Daimler Buses has the target of 6% to be reached in the coming years. The target for the Daimler Financial Services division is a return on equity of 17%.
