Annual Report 2020

Financial position

The balance sheet total decreased compared with December 31, 2019 from €302.4 billion to €285.7 billion. The reduction includes negative effects from currency translation of €12.5 billion; adjusted for these exchange-rate effects, there was a decrease of €4.2 billion. Daimler Mobility accounts for €161.3 billion of the balance sheet total (2019: €174.8 billion), equivalent to 56 % of the Daimler Group’s total assets (2019: 58 %).

The global impact of the covid-19 pandemic affected balance sheet items to varying degrees as of December 31, 2020. The decrease in total assets primarily reflects the reduced volume of the financial services business, lower inventories and lower property, plant and equipment due to, among other things, the adjustment and realignment of capacities within the global production network. Opposing effects came from significantly higher cash and cash equivalents. On the liabilities side of the balance sheet, there were decreases in financing liabilities while provisions for pensions and similar obligations were above the prior-year level. Table B.31 shows the condensed statement of financial position for the Group as well as for the industrial business and Daimler Mobility.

Current assets account for 40 % of the balance sheet total, which is below the prior-year level (2019: 42 %). Current liabilities amount to 35 % of total equity and liabilities, which is at the prior-year level. Table B.32 shows the structure of the balance sheet by maturity.

Intangible assets of €16.4 billion (2019: €16.0 billion) include €13.1 billion of capitalized development costs (2019: €12.5 billion), €1.6 billion of franchises, industrial property and similar rights (2019: €1.7 billion) and €1.2 billion of goodwill (2019: €1.2 billion). The Mercedes-Benz Cars & Vans segment accounts for 94 % (2019: 93 %) of the development costs and the Daimler Trucks & Buses segment accounts for 6 % (2019: 7 %). Capitalized development costs amounted to €2.5 billion in 2020 (2019: €3.1 billion) and accounted for 29 % of the Group’s total research and development expenditure (2019: 32 %).

Property, plant and equipment decreased to €35.2 billion due to, among other things, the adjustment and realignment of capacities within the global production network (2019: €37.1 billion). In 2020, €5.7 billion was invested worldwide (2019: €7.2 billion), primarily at our production and assembly sites for innovative products and new technologies, as well as for the modernization of the worldwide production network. The decrease was partially due to our measures to reduce costs and ensure liquidity in response to the unexpected covid-19 pandemic. The sites in Germany accounted for €3.7 billion of the capital expenditure (2019: €4.4 billion).

B.31 Condensed statement of financial position

Consolidated Industrial Business Daimler Mobility
At December 31, At December 31, At December 31,
2020  2019 2020 2019 2020 2019
In millions of euros
Assets
Intangible assets 16,399 15,978 15,686 15,077 713 901
Property, plant and equipment 35,246 37,143 34,904 36,782 342 361
Equipment on operating leases 47,552 51,482 17,949 18,799 29,603 32,683
Receivables from financial services 96,185 103,661 -83 -88 96,268 103,749
Equity-method investments 5,189 5,949 4,443 4,842 746 1,107
Inventories 26,444 29,757 25,298 28,420 1,146 1,337
Trade receivables 10,649 12,332 9,929 11,045 720 1,287
Cash and cash equivalents 23,048 18,883 20,344 16,152 2,704 2,731
Marketable debt securities and similar investments 6,397 8,655 5,468 7,522 929 1,133
thereof current 5,356 7,885 5,165 7,420 191 465
thereof non-current 1,041 770 303 102 738 668
Other financial assets 6,924 6,083 -10,862 -13,283 17,786 19,366
Other assets 11,704 12,515 1,396 2,349 10,308 10,166
Total assets 285,737 302,438 124,472 127,617 161,265 174,821
Equity and liabilities
Equity 62,248 62,841 47,933 47,858 14,315 14,983
Provisions 32,520 30,652 31,323 29,473 1,197 1,179
Financing liabilities 145,842 161,780 9,168 13,289 136,674 148,491
thereof current 59,303 62,601 -18,717 -21,218 78,020 83,819
thereof non-current 86,539 99,179 27,885 34,507 58,654 64,672
Trade payables 12,378 12,707 11,605 11,896 773 811
Other financial liabilities 8,598 9,864 5,532 6,224 3,066 3,640
Contract and refund liabilities 12,956 13,631 12,598 13,239 358 392
Other liabilities 11,195 10,963 6,313 5,638 4,882 5,325
Total equity and liabilities 285,737 302,438 124,472 127,617 161,265 174,821

Equipment on operating leases and receivables from financial services decreased to a total of €143.7 billion (2019: €155.1 billion). The decrease adjusted for the effects of currency translation was €4.1 billion. Although new business stabilized in the second half of the year, contract volume was below the prior-year level, mainly due to lower customer demand caused by the corona crisis. The leasing and sales-financing business as a proportion of 50 % of total assets was lower than in the previous year (2019: 51 %).

Equity-method investments decreased to €5.2 billion (2019: €5.9 billion). They mainly comprise the carrying amounts of our equity interests in Beijing Benz Automotive Co., Ltd., BAIC Motor Corporation Ltd.- (BAIC Motor), There Holding B.V. and YOUR NOW Holding GmbH (YOUR NOW). The decrease came primarily from the interests in BAIC Motor and YOUR NOW.

Inventories decreased from €29.8 billion to €26.4 billion; also as a proportion of total assets, they were below the prior-year level at 9 % (2019: 10 %). The decrease of €2.1 billion, adjusted for exchange-rate effects, mainly came from the two automotive segments, and, among other things, is due to the lower business volume in 2020 resulting from the covid-19 pandemic and the measures taken for active working-capital management.

Trade receivables of €10.6 billion are below the prior-year level of €12.3 billion. The decrease was partially due to the sales development and the stronger focus on working capital. The Mercedes-Benz Cars & Vans segment accounts for 64 % of these receivables (2019: 61%) and the Daimler Trucks & Buses segment accounts for 29 % (2019: 28 %).

Cash and cash equivalents increased compared with the end of 2019 by €4.2 billion to €23.0 billion.

Marketable debt securities and similar investments decreased compared with December 31, 2019 from €8.7 billion to €6.4 billion. Those assets include the debt instruments that are allocated to liquidity, most of which are traded in active markets. They generally have an external rating of A or better.

Other financial assets of €6.9 billion are above the prior-year level (2019: €6.1 billion). They primarily consist of derivative financial instruments, equity and debt instruments, investments in non-consolidated subsidiaries, and loans and other receivables due from third parties. The increase is mainly attributable to higher positive fair values of derivative financial instruments.

Other assets of €11.7 billion (2019: €12.5 billion) primarily comprise deferred tax assets and tax refund claims. The main effect here was from lower refund claims in connection with value added taxes.

The Group’s equity decreased compared with December 31, 2019 from €62.8 billion to €62.2 billion. Positive effects on equity resulted from the net profit of €4.0 billion and from the remeasurement of derivative financial instruments not recognized in profit or loss (€0.8 billion). This was offset by the effects of currency translation of €2.5 billion, actuarial losses from defined-benefit pension plans recognized in retained earnings of €1.9 billion and the dividend of €1.0 billion paid out to Daimler’s shareholders. Equity attributable to the shareholders of Daimler AG decreased accordingly to €60.7 billion (2019: €61.3 billion).

While the balance sheet total decreased by 6 %, equity decreased by 1 % compared with the previous year. The Group’s equity ratio of 21.3 % was therefore above the level at the end of 2019 (20.5 %); the equity ratio for the industrial business was 37.3 % (2019: 36.7 %). It is necessary to consider the fact that the equity ratios at the end of 2019 and 2020 are adjusted for the paid and proposed dividend payments.

Provisions increased from €30.7 billion to €32.5 billion; as a proportion of the balance sheet total, they were also above the prior-year level at 11 % (2019: 10 %). Provisions for pensions and similar obligations increased to €12.1 billion (2019: €9.7 billion). Opposing the significant increase in the present value of defined-benefit pension obligations to €39.9 billion (2019: €36.2 billion) was the fair value of the pension-plan assets applied to finance those obligations of €28.9 billion (2019: €27.8 billion). Especially the further decrease in discount rates led to an increase in the present value of defined-benefit pension obligations. This effect was only partially offset by positive income from the plan assets. Provisions also relate to liabilities from product warranties of €8.5 billion (2019: €8.7 billion), from personnel and social costs of €4.6 billion (2019: €4.2 billion) and from liability and litigation risks and regulatory proceedings of €4.6 billion (2019: €4.9 billion), as well as provisions for other risks of €2.7 billion (2019: €3.1 billion).

Financing liabilities of €145.8 billion were significantly below the level of the previous year (2019: €161.8 billion). Adjusted for exchange-rate effects, the decrease of €8.9 billion was primarily due to the lower refinancing requirement of the leasing and sales-financing business. 53 % of the financing liabilities were accounted for by bonds, 22 % by liabilities to financial institutions, 11 % by liabilities from ABS transactions and 10 % by deposits in the direct banking business.

Trade payables decreased compared with December 31, 2019 by €0.3 billion to €12.4 billion. The Mercedes-Benz Cars & Vans segment accounts for 71 % (2019: 71 %) of those payables and the Daimler Trucks & Buses segment accounts for 23 % (2019: 22 %).

Other financial liabilities amounted to €8.6 billion (2019: €9.9 billion) and mainly consist of liabilities from residual-value guarantees, wages and salaries, derivative financial instruments, deposits received and accrued interest on financing liabilities. The decrease is partially attributable to lower negative fair values of derivative financial instruments.

Contract and refund liabilities of €13.0 billion are lower than a year earlier (2019: €13.6 billion). They mainly comprise deferred revenue from service and maintenance contracts as well as extended warranties and obligations from sales in the scope of IFRS 15.

Other liabilities of €11.2 billion (2019: €11.0 billion) primarily comprise deferred taxes, tax liabilities and deferred income.

Further information on the assets presented in the statement of financial position and on the Group’s equity and liabilities is provided in the Consolidated Statement of Financial Position (see table D.03), the Consolidated Statement of Changes in Equity (see table D.05) and the related notes in the Notes to the Consolidated Financial Statements.

Table B.33 shows the derivation of net assets for the automotive segments. They relate to the operating assets and liabilities for which the divisions are responsible.

B.33 Net Assets of the automotive segments

Mercedes-Benz Cars & Vans Daimler Trucks & Buses
At December 31, At December 31,
2020 2019 2020 2019
In millions of euros
Intangible assets 13,991 13,234 1,681 1,828
Property, plant and equipment 26,661 27,933 7,905 8,569
Inventories 19,117 20,959 6,307 7,615
Trade receivables 6,839 7,556 3,090 3,469
Other segment assets 24,752 24,808 5,847 6,497
Segment assets 91,360 94,490 24,830 27,978
Trade payables 8,752 9,042 2,824 2,847
Other segment liabilities 51,416 52,150 14,176 14,706
Segment liabilities 60,168 61,192 17,000 17,553
Net assets 31,192 33,298 7,830 10,425
Liquidity and capital resources
Daimler AG