The Daimler Group achieved EBIT of €11.1 billion i
B.12 EBIT by segment
|In millions of euros||% change|
|Daimler Financial Services||1,384||1,970||-30|
|Daimler Group 2||11,132||14,348||-22|
|1 The prior-year figures have been adjusted due to the effects of the first-time adoption of IFRS 15 and IFRS 9. Information on adjustments to prior-year figures is disclosed in Note 1 of the Notes of the Consolidated Fi-nancial Statements. |
2 EBIT, the indicator of operating performance, comprises earnings before interest income/expense and corporate income taxes. The reconciliation of the Daimler Group’s EBIT to earnings before income taxes is included in Note 34 of the Notes to the Consolidated Financial Statements.
The significant increase in EBIT at the Daimler Trucks division was not able to offset the decreases in earnings at the other divisions. In particular, the Mercedes-Benz Cars division posted earnings significantly below its prior-year figure. The main reasons were expenses in connection with ongoing governmental proceedings and measures relating to diesel vehicles and advance expenditure for new technologies and vehicles. At Daimler Trucks, increased unit sales in the NAFTA region had a positive effect on earnings. Due in particular to the negative impact on earnings of the agreement to conclude the Toll Collect arbitration proceedings, EBIT at Daimler Financial Services was also significantly below the prior-year level. Exchange-rate effects had an overall negative impact on operating profit.
The reconciliation of segment earnings to Group EBIT also resulted in a significantly higher expense than in the previous year.
Daimler Jahrespressekonferenz 2019
In the Management Report fo
The Mercedes-Benz Cars division posted EBIT of €7,216 million i
The negative earnings development reflects expenses in connection with ongoing governmental proceedings and measures relating to diesel vehicles. In addition, EBIT was also reduced by advance expenditure for new technologies and vehicles, as well as by weaker pricing. Unfavorable exchange-rate effects and higher expenses for raw materials also affected earnings adversely. On the other hand, a positive effect resulted from the remeasurement at fair value (€111 million) of the investment in Aston Martin Lagonda Global Holdings plc (Aston Martin).
In the prior year, EBIT was reduced by expenses for voluntary service activities and expenses for a specific vehicle recall (€425 million). On the other hand, EBIT was boosted in the prior year by income of €183 million in connection with a new investor in HERE.
The Daimler Trucks division achieved EBIT in the yea
The positive development of earnings was primarily the result of increased unit sales in the NAFTA region as well as further efficiency enhancements. Higher expenses for exchange-rate effects and expenses for raw materials affected EBIT negatively. Additional costs, mainly resulting from supply-chain constraints, also had a negative impact on earnings. In the previous year, EBIT was boosted by €267 million due to income from the sale of real estate by Mitsubishi Fuso Truck and Bus Corporation in Japan. In addition, expenses of €172 million related to fixed-cost optimization were included in the prior year.
Mercedes-Benz Vans achieved EBIT i
The positive development of unit sales, especially in the NAFTA region, China and Western Europe, had a positive impact on EBIT. However, earnings were reduced by advance expenditure for new technologies and future products and by expenses for the Sprinter model change. Furthermore, EBIT was reduced by expenses in connection with ongoing governmental proceedings and measures relating to diesel vehicles, by delivery delays and by the remeasurement of assets in connection with production capacities.
The Daimler Buses division’s EBIT of €265 million i
Higher unit sales only partially offset the product-mix and inflation-related cost increase.
Daimler Financial Services posted EBIT of €1,384 million i
Due to the agreement reached to conclude the Toll Collect arbitration proceedings, earnings were reduced by €418 million. The increasing level of interest rates had a negative impact on earnings. Rising cost of credit risks in individual markets impacted earnings negatively in the still relatively stable risk environment. Increased contract volume had a positive impact on EBIT.
The reconciliation of the divisions’ EBIT to Group EBIT comprises gains and/or losses at the corporate level and the effects on earnings of eliminating intra-group transactions between the divisions.
Items at the corporate level resulted in expenses of €757 million (2017: €232 million). In both years, expenses connected with legal proceedings are included. The increase was caused by, among other things, higher expenses in connection with the development of the divisional structure (“Project Future”). In addition, the impairment of Daimler’s equity investment in BAIC Motor Corporation Ltd. (BAIC Motor) by €150 million impacted earnings negatively. On the other hand, the reversal of the impairment of Daimler’s equity investment in BAIC Motor of €240 million had a positive effect on earnings in the yea
The elimination of intra-group transactions resulted in expenses of €41 million i
The reconciliation of Group EBIT to profit before income taxes is shown in table (See table B.16)
B.16 Reconciliation of Group EBIT to profit before income taxes
|In millions of euros|
|Amortization of |
capitalized borrowing costs 2
|Profit before income taxes||10,595||13,967|
|1 The prior-year figures have been adjusted due to the effects of the first-time adoption of IFRS 15 and IFRS 9. Information on adjustments to prior-year figures is disclosed in Note 1 of the Notes to the Consolidated Financial Statements. |
2 Amortization of capitalized borrowing costs is not included in the internal performance measure EBIT, but is a component of cost of sales.