Daimler AG’s Q1 income falls despite increase in sales

The Daimler Group’s net profit for the first quarter of 2016 fell 32% from €2,050 million in Q1-2015 to €1,400 in Q1-2016. The net profit attributable to the shareholders of Daimler AG amounted to €1,353 million as compared to €1,963 million in the same quarter last year, representing earnings per share of €1.26 (Q1 2015: €1.83).

The dip in income came despite an increase in sales and revenue. A total of 683,900 cars and commercial vehicles were sold (up 7% year-on-year) in this quarter. Mercedes-Benz Cars also set a new record for this period with sales of 496,800 vehicles (+8%). The Group’s revenue amounted to €35 billion and was thus 2% above the prior-year level. Adjusted for changes in currency exchange rates, revenue grew by 4%.

Commenting on the Group’s performance, Dr Dieter Zetsche, chairman of Board of Management of Daimler AG and head of Mercedes-Benz Cars said, “Daimler is on a successful path. Our growth in unit sales clearly shows that we are following the right strategy and have the right products in the market. The model offensive is continuing at the same speed. We will continually improve as the year progresses and will make 2016 into another successful year for Daimler.”

The Q1-2016 income was primarily impacted by a lifecycle-related decrease in unit sales of the S- and E-Class at the Mercedes-Benz Cars division. The fall in earnings was not offset by the improvement in earnings at the Daimler Trucks, Mercedes-Benz Vans and Daimler Buses divisions. At Daimler Financial Services, earnings increased primarily due to the higher contract volume. Exchange-rate effects had an overall negative effect on earnings. Declining discount rates also reduced earnings.

“We continue to make large investments in products and technologies – and thus in the future of Daimler. We are in a robust position with our solid financial statements, financial discipline and worldwide production networks in all divisions. This enables us to cope flexibly with market fluctuations and to consistently pursue our strategy. In addition, we are working to further develop our efficient business models sustainable and on utilizing the potential of digitization,” stated Bodo Uebber, member of the Board of Management of Daimler AG responsible for Finance & Controlling and Daimler Financial Services.

Positive outlook for Indian market

In Q1-2016, Daimler Trucks’ global sales decreased by 6% to 105,700 vehicles. However, the Indian market saw an increase of 12%. The same applies for medium- and heavy-duty trucks (M&HCV) where the global demand for Daimler should be slightly below the prior-year volume. But in India, “Further significant growth in the segment of medium- and heavy-duty trucks is anticipated. An increase in unit sales should be achieved with the product portfolio in India. With the expanded range of FUSO vehicles produced in India, the truck division will generate additional unit sales in Asia and Africa.”