Statement of income

The Group’s total revenue increased by 3.2 % to €172.7 billion in 2019; adjusted for exchange-rate effects, it increased by 2.2 %. The development of revenue was positively affected primarily by stronger pricing for new vehicles at the Daimler Trucks division and growth in contract volume at Daimler Mobility. (See table B.18)

Cost of sales amounted to €143.6 billion in 2019, increasing by 6.9 % compared with the previous year. In 2019, a reassessment of risks relating to ongoing governmental and legal proceedings and measures taken with regard to Mercedes-Benz diesel vehicles in various regions and markets as well as expenses in connection with an updated risk assessment for an expanded recall of vehicles with Takata airbags adversely affected cost of sales at the Mercedes-Benz Cars and Mercedes-Benz Vans segments. Cost of sales also include expenses in connection with a review and prioritization of the product portfolio at the Mercedes-Benz Vans division. The increase in cost of sales was also caused by higher business volumes and consequentially higher material expenses. At Daimler Mobility, the normalization of credit-risk costs affected cost of sales. Further information on cost of sales is provided in Note 5 of the Notes to the Consolidated Financial Statements. (See table B.18)

Overall, gross profit in relation to revenue decreased from 19.8 % to 16.9 %.

Selling expenses decreased by €0.3 billion to €12.8 billion. As a percentage of revenue, selling expenses decreased from 7.8 % to 7.4 %. (See table B.18)

General administrative expenses of €4.1 billion were at prior year level (2018: €4.0 billion). As a percentage of revenue, general administrative expenses decreased slightly to 2.3 % (2018: 2.4 %). (See table B.18)

Research and non-capitalized development costs of €6.6 billion in 2019 remained at the prior-year level. They were mainly related to the development of new models, advance expenditure for the renewal of existing models, and the further development of fuel-efficient and environmentally friendly drive systems as well as safety technologies, automated and autonomous driving and the digital connectivity of our products. As a proportion of revenue, research and non-capitalized development costs decreased from 3.9 % to 3.8 %. Further information on the Group’s research and development costs is provided in the Research and Development section of the Sustainability chapter of this Combined Management Report. (See table B.18)

Other operating income of €2.8 billion (2018: €2.3 billion) was above the level of the previous year. In 2019, it included income of €0.7 billion from the merger of the business units for mobility services of Daimler Group and BMW Group. In 2018, income from insurance compensation of €0.2 billion was included. Other operating expense increased to €4.5 billion (2018: €1.5 billion). Compared with the prior year, it included higher expenses in connection with ongoing governmental and legal proceedings and measures in the segments Mercedes-Benz Cars and Mercedes-Benz Vans relating to Mercedes-Benz diesel vehicles in various regions and markets. Further information on the composition of other operating income and expense is provided in Note 6 of the Notes to the Consolidated Financial Statements. (See table B.18)

In 2019, the profit from equity-method investments of €0.5 billion was lower than the prior-year level (2018: €0.7 billion). Both years include losses from Daimler Mobility companies. In the year 2019, losses of €0.8 billion from the YOUR NOW group reduced the profit from equity-method investments. In the year 2018, the agreement to conclude the Toll Collect arbitration proceedings had a negative effect on earnings of €0.4 billion. Also in the year 2018, a negative impact resulted from the impairment by €0.2 billion of the investment in BAIC Motor. (See table B.18)

Other financial expense/income worsened from income of €0.2 billion to an expense of €0.3 billion. Of that decrease, €0.2 billion is the result of the measurement at fair value of the interest in Aston Martin. Furthermore, an additional expense of €0.2 billion occurred from decreasing discount rates for provisions for other risks. (See table B.18)

Net interest expense amounted to €0.5 billion (2018: €0.5 billion). (See table B.18)

The tax expense of €1.1 billion (2018: €3.0 billion) stated under income tax expense decreased mainly due to the decline in profit before income taxes. The effective tax rate for 2019 was 29.3 % (2018: 28.4 %). (See table B.18)

Net profit of €2.7 billion (2018: €7.6 billion) is significantly below the prior-year figure. Net profit of €0.3 billion is attributable to non-controlling interests (2018: €0.3 billion). Net profit attributable to the shareholders of Daimler AG amounts to €2.4 billion (2018: €7.2 billion), representing a decrease in earnings per share to €2.22 (2018: €6.78). (See table B.18)

B.18 Statement of income

  Consolidated Industrial Business Daimler Mobility
  2019 2018 2019 2018 2019 2018
In millions of euros            
             
Revenue 172,745 167,362 144,099 141,093 28,646 26,269
Cost of sales -143,580 -134,295 -118,626 -111,589 -24,954 -22,706
Gross profit 29,165 33,067 25,473 29,504 3,692 3,563
Selling expenses -12,801 -13,067 -12,038 -12,174 -763 -893
General administrative expenses -4,050 -4,036 -3,139 -3,075 -911 -961
Research and non-capitalized development costs -6,586 -6,581 -6,586 -6,581
Other operating income 2,837 2,330 1,927 2,137 910 193
Other operating expense -4,469 -1,462 -4,444 -1,404 -25 -58
Profit/loss on equity-method investments, net 479 656 1,245 1,108 -766 -452
Other financial income/expense, net -262 210 -265 218 3 -8
Interest income 397 271 394 270 3 1
Interest expense -880 -793 -868 -788 -12 -5
Profit before income taxes 3,830 10,595 1,699 9,215 2,131 1,380
Income taxes -1,121 -3,013 -505 -2,615 -616 -398
Net profit 2,709 7,582 1,194 6,600 1,515 982
thereof profit attributable to non-controlling interests 332 333        
thereof profit attributable to shareholders of Daimler AG 2,377 7,249        

The calculation of earnings per share is based on an unchanged average number of outstanding shares of 1,069.8 million.

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