Overall Assessment of the Economic Situation
In the opinion of the Board of Management, at the time of publication of this Annual Report, the Daimler Group is in a phase of transition, which brings great opportunities but also considerable risks:
- We have presented a new sustainable business strategy, which is designed to lead us into a CO2-neutral future.
- After receiving the approval of the Annual Shareholders’ Meeting, we launched a new corporate structure effective November 1, 2019, which makes us more flexible and focuses our businesses more closely on our customers.
- We are on the threshold of a far-reaching transformation process that will change the Daimler Group and the automotive industry as a whole to an unprecedented extent in the coming years.
- An additional factor is an environment featuring trade conflicts, extremely demanding targets for CO2 reductions, and economic and political uncertainties.
Against this backdrop, our divisions generally performed well in the market i
With a large number of new and innovative products and services, we have established a good starting position to meet the upcoming challenges. We are also very well positioned in the key technologies that are important for the future of mobility.
Daimler is pushing ahead with the electrification of the automobile. The entire Mercedes-Benz car portfolio is to be electrified b
In the field of automated driving, we launched a long-term development cooperation with BMW in the year under review. We intend to jointly develop the next generation of technology for driver assistance systems and automated driving on highways, as well as automated parking functions. As o
In order to further improve our competitiveness and combine our strengths, we have entered into pioneering partnerships for mobility services, for the further development of the smart brand’s model portfolio, and for the establishment of a wide-ranging charging infrastructure for electric vehicles.
Numerous positive aspects of the Group’s current situation are of benefit to us with regard to the current transformation process. On the other hand, we have a generally unsatisfactory development of key financial performance indicators.
The operating profit (EBIT) of the Daimler Group of €4.3 billion was significantly lower than in the previous year (€11.1 billion). There were particularly significant decreases at the Mercedes-Benz Cars and Mercedes-Benz Vans divisions. In the automotive business as a whole, our return on sales of 1.
This is true also because we plan to invest approximately €14 billion in property, plant and equipment and nearly €19 billion in research and development projects i
High expenses for the transition to a CO2-neutral future will continue to reduce our earnings in the coming years. It is therefore important that we now take the measures that will enable us to generate adequate returns and cash flows again in the medium term, even under less favorable conditions. For that reason, we are initiating comprehensive measures to increase profitability at all our divisions and at
We aim to offer sustainable solutions for the personal mobility and the goods transport of the future. We want to inspire emotionally and convince rationally. With our Mercedes-Benz automobiles, we take this path with sustainable, modern luxury. And with innovative and highly efficient commercial vehicles, we intend to make our customers successful in the transport and haulage business. Achieving our return targets and a solid cash flow are currently our top priorities. Because an appropriate rate of return is also the precondition for meeting the justified demands of our investors, our employees, our suppliers, and society as a whole.
In order to achieve our goals, we are systematically implementing our sustainable business strategy. Our starting position on the road to a profitable and at the same time CO2-neutral future is significantly better than current earnings figures suggest. There is still a lot to do, but we laid down the decisive markers i
All of this gives us great confidence for the coming years and the challenges that lie ahead.