Daimler and the Capital Market
Global stock markets signiﬁcantly improved in 2017 and reached record levels in several regions. Daimler’s share price was volatile during 2017 and closed the year at the level of a year earlier. The Board of Management and the Supervisory Board will propose to the Annual Shareholders’ Meeting that an increased dividend of €3.65 (2016: €3.25) per share be paid for 2017.
A.01 Development of Daimler’s share price and of major indices
|End of 2017||End of 2016||17/16|
|Daimler share price (in euros)||70.80||70.72||+0|
|Dow Jones Euro STOXX 50||3,504||3,291||+6|
|Dow Jones Industrial Average||24,719||19,763||+25|
|Dow Jones STOXX Auto Index||615||543||+13|
Global stock markets significantly improve in 2017
Global stock markets started the year 2017 in an optimistic mood, with many investors anticipating that the new administration in the Unites States would implement measures to stimulate the economy. In this environment, the key US stock-market indices rose to all-time highs. At the same time, investors in automotive stocks behaved in a very risk-averse manner. Following a short phase of uncertainty prior to the presidential elections in France, stock markets rose significantly at the end of April after the first round of the elections. During this period, the German DAX share index surpassed its previous record of 12,375 from the year 2015. The positive development that followed was supported by the ongoing expansionary monetary policy of the European Central Bank (ECB) and a course of rather moderate interest-rate increases in the United States on the part of the Federal Reserve, which, as expected, raised base interest rates by 25 basis points in March and then again in June. Market volatility increased in mid-August, partly due to the rising tension between the US and North Korea. Automotive stocks were also subject to major fluctuations in this environment, but markets as a whole then recovered strongly once again in September. Along with robust economic data and the strong US dollar, the prospect of a new business-friendly government in Germany had a stimulating effect on the German economy. During the rest of the year, the global economic recovery and positive financial reporting by European companies increased investors’ propensity to purchase shares. Many stock-market indices around the globe reached all-time highs in the fourth quarter. Nevertheless, expectations regarding the future behavior of central banks worldwide remained very much on investors’ minds.
The index of the most important shares in the euro zone, the Dow Jones Euro STOXX 50, rose by 6 % in 2017. The leading German share index, the DAX, performed significantly better, rising by 13 %. The DAX also broke the 13,000 mark for the first time ever in October 2017, and reached a new all-time high of 13,479 on November 3. In Japan, the Nikkei index also finished the year with a significant increase, to 22,765 (+19 %), its highest level in several years. In the United States, the Dow Jones reached an all-time high of 24,719 in December 2017 and recorded a 25 % increase for the year as a whole.
Volatile development of Daimler share price
Automotive stocks were able to carry over their momentum from the prior year in the early part of 2017, but this momentum began to dissipate once again at the beginning of the second quarter. Along with their general concern regarding the sustainability of demand for cars in Western Europe, North America and Japan, investors were also very much focused on the further development of the Chinese car market after adjustments to subsidies there in late 2016. The discussions regarding diesel technology and ongoing litigation also had an increasingly negative effect on automotive stocks. On the other hand, investors did recognize the fact that business continued to develop favorably in the automotive industry. Nevertheless, automotive stocks came under further pressure on global markets in the months that followed. Discussions regarding the future of diesel engines now spread to many other countries with a negative impact on the entire sector, and thus on our share price as well. Investors believe that the expansion of drivetrain electrification in the coming years will lead to a high level of capital investment and a comparatively lower level of profitability. Investors and analysts also continued to pay close attention to the various automotive markets during the year under review. The focus here was on the development of the car market in the United States, where a declining number of new registrations and concerns about residual values led to increased uncertainty on the capital market as to whether demand could be sustained. In general, the appreciation of the euro against the dollar had a negative effect on the shares of companies with a high proportion of exports to dollar-based markets. In this situation, the Daimler share price dropped to its lowest point of the year 2017 when it fell to €59.29 on July 31. Following the diesel summit in Germany at the beginning of August, the debate on diesel technology took on a more objective tone, and greater clarity was also achieved regarding the measures planned by the German federal government and automakers. This led to greater investor confidence in the automotive sector, and many investors took advantage of the favorable opportunity to purchase automotive shares. Investors’ new share-price expectations were also reinforced by the innovations presented at the Frankfurt International Motor Show (IAA) and by the strategic course adopted by the automotive industry.
Mercedes-Benz Cars in the Fast Lane | IAA 2017
Our ongoing product offensive and the solid financial results that we recorded once again in the third quarter of 2017 led to further increases in our share price in September and October. On November 3, Daimler’s share price reached €73.25, which was the highest price for the year. The Daimler share closed at €70.80 on December 29. At the end of the year, the company had a market capitalization of €75.7 billion (2016: €75.7 billion). Daimler’s share price was thus at the same level as a year earlier year and therefore failed to keep pace with the development of the German share index DAX (+13 %) and the Dow Jones STOXX Auto Index (+13 %). When the dividend payout of €3.25 per share is included, our shareholders saw the value of their investment increase by 5 %. In the first few weeks of the year 2018 our share price developed very positively. Daimler’s shares were listed at €73.73 at the end of January, which is 4 % above the closing price at the end of 2017.
Dividend of €3.65
(See table A.02) The Board of Management and the Supervisory Board will recommend an increased dividend payment of €3.65 per share for financial year 2017 at the Annual Shareholders’ Meeting on April 5, 2018. The total dividend amount will thus reach the new record level of €3,905 million (2016: €3,477 million).
A.02 Key figures per share
|Amounts in euros||% change|
|Equity (December 31)||59.84||54.17||+10|
|Xetra price at year end1||70.80||70.72||+0|
1 Closing prices
A broad shareholder structure
(See table A.07) Daimler continues to have a broad shareholder base of approximately 0.9 million shareholders. Shareholder numbers decreased slightly during the reporting year, particularly as fewer private investors purchased our shares. The Kuwait Investment Authority (KIA) currently owns 6.8 % of the company’s shares, making it Daimler AG’s largest individual shareholder. The Renault-Nissan Alliance continues to hold 3.1 % of Daimler’s shares. BlackRock Inc., New York, still holds a stake above the 5 % reporting limit as defined by Germany’s Securities Trading Act (WpHG). In November 2017, BlackRock notified us that its proportion of the voting rights was 5.95 % on November 8, 2017. In March 2017, Harris Associates L. P., Wilmington, notified us that its proportion of the voting rights rose above the 3 % reporting limit to 3.01 % on March 9, 2017.
The aforementioned and all other voting-rights notifications are published at daimler.com/investors/share/voting-rights.
Institutional investors hold a total of 71 % of our equity capital, while private investors own 19 %. Approximately 65 % of our capital is in the hands of European investors and around 23 % is held by US investors.
A.05 Key figures for Daimler shares
End of 2017
|End of 2016||17/16|
|Share capital (in millions of euros)||3,070||3,070||0|
|Number of shares (in millions)||1,069.8||1,069.8||0|
(in billions of euros)
|Number of shareholders (in millions)||0.9||1.0||-10|
|Weighting in share indices|
|DAX 30||6.79 %||7.52 %|
|Dow Jones Euro STOXX 50||2.92 %||3.18 %|
|Long-term credit ratings|
|Standard & Poor’s||A||A-|
A.06 Stock-exchange data for Daimler shares
|German Securities Identification Number||710000|
|Reuters ticker symbol||DAIGn.DE|
|Bloomberg ticker symbol||DAI:GR|
With a weighting of 6.79 % (2016: 7.52 %), Daimler was ranked sixth in the German share index DAX30 at the end of 2017. In the Dow Jones Euro STOXX 50 index, our shares had a weighting of 2.92 % (2016: 3.18 %), which put Daimler in eleventh place. Daimler shares are listed on the stock exchanges in Frankfurt and Stuttgart. A total volume of 942 million shares were traded in Germany in 2017 (2016: 1,210 million). Daimler shares are also increasingly being traded on multilateral trading platforms and in the over-the-counter market.
Employee share purchase plan implemented once again
Staff members entitled to purchase employee shares were able to do so once again in March 2017. As was the case in the previous year, price-reduced shares as well as bonus shares were offered. At 19.8 %, the participation rate in the year under review was significantly higher than in previous years (2016: 11.7 %). A total of 36,200 employees took part in the program (2016: 34,500), which is the highest number since 2008. The total number of shares purchased by employees also increased substantially once again, from 576,000 in 2016 to approximately 604,000 (of which just under 54,400 were bonus shares) in the year under review. The high degree of participation in the employee share-purchase plan was likely due to the positive outlook for the company, a high profit-sharing payout once again, and the attractiveness of dividend yields in the current low interest-rate environment.
Annual Shareholders’ Meeting in the CityCube in Berlin
Our Annual Shareholders’ Meeting was held on March 29, 2017 in the CityCube in Berlin. Some 6,200 shareholders (2016: 5,500) attended the meeting. A total of 49.18 % (2016: 50.77 %) of equity capital was represented at the meeting (actual attendees and shareholders who voted by absentee ballot). A large majority of the shareholders approved each of the agenda points proposed by the company’s management. For example, the Annual Shareholders’ Meeting once again approved a very attractive dividend of €3.25 per share (2016: €3.25) and reelected Dr. Clemens Börsig as a member of the Supervisory Board of Daimler AG representing the shareholders. At its subsequent meeting, the Supervisory Board reelected Dr. Börsig to the Audit Committee, which in turn elected Dr. Börsig as Chairman of the Audit Committee. The Annual Shareholders’ Meeting also elected Bader Mohammad Al Saad, a member of the Executive Committee of the Board of Directors of Kuwait Investment Authority (KIA), as a member of the Supervisory Board of Daimler AG representing the shareholders. The terms for both newly elected Supervisory Board members will expire at the end of the Annual Shareholders’ Meeting held in 2022. Important documents and information related to the Annual Shareholders’ Meeting can be found at daimler.com/investors/events/annual-meetings/2017. In the exhibition areas of the CityCube, Daimler presented its technological expertise and a broad range of products and services under the motto “Future Mobility.” The exhibition highlights showcased future mobility: Along with the elegant Vision Mercedes Maybach 6 and the first model from the EQ brand, as well as a Mercedes-Benz electric truck for heavy-duty distribution transportation, the presentation also featured the Vision Van, which attracted a great deal of attention. The vehicle boasts a fully automated cargo compartment, integrated drones for autonomous air deliveries and state-of-the-art joystick control. The Mercedes-Benz Future Bus, a partially automated city bus with the CityPilot system, offered a preview of local public transportation in the future. Daimler Financial Services was also on hand at the Annual Shareholders Meeting to present its mobility services, and Mercedes me and various connectivity services were on display as well. Some of our trainees were also at the meeting to provide an insight into their work. The presentation of our program for the further development of our corporate culture, Leadership 2020, showed how Daimler is responding to the changes occurring with regard to products, customer expectations and the working world.
Continuation of comprehensive investor relations activities
In 2017, we once again provided institutional investors, analysts, rating agencies and private investors with timely information regarding the company’s business development. We organized road shows for institutional investors and analysts in the finance capitals of Europe, North America, Asia and Australia. We also held many one-on-one meetings at investor conferences. This was especially the case at the international motor shows in Geneva and Frankfurt. Sustainability-focused investors were also able to meet and talk with company representatives at two events held at the IAA in Frankfurt and at conferences in Frankfurt in February and in Paris in November. We reported on our quarterly results in conference calls and webcasts. The presentations can be viewed on our website at daimler.com/investors/events/presentations. The talks with analysts and investors focused on the latest earnings expectations for 2017, as well as on business developments and the profitability of the individual divisions and regions. In addition, top-level managers from Daimler Financial Services discussed the strategies and goals for financial services and mobility services at a capital market event held in London in February. In September, numerous analysts and investors attended an event in Sindelfingen, where Daimler presented an overview of the latest business developments and offered a look at the future strategy of the Mercedes-Benz Cars division with speeches, discussions and workshops. The audio recordings and charts and illustrations from the events are available at daimler.com/investors/events/capital-market-days.
Awards once again for online version of the Annual Report
Our Annual Report, which boasted numerous additional features for 2016 (See annualreport2016.daimler.com), won prestigious international awards once again in 2017, including the Stevie Award. The online report also captured Gold at the 2016 LACP Vision Awards.
Continual further development of the corporate website
Since December 2016, we have upgraded both the content and the visuals of numerous sections of our Investor Relations site at daimler.com/investors. Among other things, we have introduced key-figure modules, information charts, detailed explanations and quotes. A representative online user survey revealed that visitors to the Investor Relations site are very satisfied with what they find there. The survey also yielded valuable information on user structure, information requirements and the potential for further improvement. The additional optimization measures we implemented for Internet search engines also now make it easier for users to find and access the content they need.
Number of online shareholders remains at a high level
Our shareholders continue to make good use of our range of personalized electronic information and communication. The increase in online shareholders was particularly high in 2017, as a total of 95,000 (2016: 86,500) shareholders received the invitation and the agenda for the Annual Shareholders’ Meeting by e-mail rather than by post. We would like to thank those shareholders for helping to protect the environment and cut costs. As was the case in the past, those shareholders once again had the opportunity to win attractive prizes in a lottery. Access to the e-service for shareholders and additional information can be found at register.daimler.com.
Refinancing benefits from high level of capital-market liquidity and good ratings
Central banks’ ongoing expansionary monetary policies also impacted bond markets during the year under review. As a result of the high level of liquidity, companies with investment-grade ratings saw their risk premiums remain at a moderate level.
In 2017, the Group primarily covered its refinancing needs by issuing bonds. A large proportion of those bonds were sold as benchmark bond issuances (bonds with high nominal volumes) in euro and dollar markets. In the US capital market, for example, Daimler Finance North America LLC issued bonds worth a total of $6.5 billion in January, May and November 2017. The bonds had terms of 18 months and three, five and ten years. In addition, Daimler AG issued euro bonds in benchmark format with a total volume of €6.3 billion and terms of seven, eight, ten, 12 and 20 years. In 2017, Daimler AG also issued four bonds in China (so-called Panda bonds) worth a total of CNY 16.0 billion. Furthermore, many smaller bonds were issued by the Daimler Group in a variety of currencies and markets.
At the end of 2017, Daimler Group companies had issued bonds that were still outstanding in a volume of €67.1 billion (2016: €63.1 billion). Besides raising funds through the issuance of bonds, Daimler also issued a small volume of commercial paper in 2017.
During the year under review, Daimler conducted asset-backed security (ABS) transactions in two new countries in addition to the existing ABS platforms in the United States, Canada, Germany and China. In the United Kingdom, for example, GBP 0.4 billion was successfully placed with investors, while the first transaction in Australia had a volume of AUD 0.75 billion. In the United States, the company generated a refinancing volume of $4.7 billion through three transactions in 2017; in Canada, a volume of CAD 0.4 billion was generated in one transaction. In addition, Mercedes-Benz Bank used the Silver Arrow Platform to sell €1.1 billion in ABS bonds to European investors. And in China, two ABS transactions were successfully conducted with a total volume of CNY 10.2 billion.