Financial position, liquidity and capital resources

The balance sheet total of €117.2 billion is €9.9 billion higher than at the end of 2017. (See table B.35)

B.35 Balance sheet structure of Daimler AG

  Dec. 31, 2018 Dec. 31, 2017
In millions of euros    
     
Assets    
Non-current assets 55,092 42,700
Inventories 10,524 9,466
Receivables, securities and other assets 44,784 49,516
Cash and cash equivalents 6,354 1,782
Current assets 61,662 60,764
Prepaid expenses 406 384
Net defined-benefit plan asset - 3,462
  117,160 107,310
     
Equity and liabilities    
Share capital 3,070 3,070
(Conditional capital €500 million)    
Capital reserve 11,480 11,480
Retained earnings 25,182 23,637
Distributable profit 3,477 3,905
Equity 43,209 42,092
Provisions for pensions and similar obligations 838 -
Other provisions 15,595 13,981
Provisions 16,433 13,981
Trade payables 7,210 6,499
Other liabilities 49,232 43,838
Liabilities 56,442 50,337
Deferred income 1,076 900
  117,160 107,310

Non-current assets increased during the year by €12.4 billion to €55.1 billion, reflecting the €11.9 billion increase in financial assets, which resulted primarily from internal restructuring within the Group as part of Project Future. Furthermore, property, plant and equipment increased by €0.4 billion to €9.5 billion. Investments in property, plant and equipment (excluding leased assets, approximately €3.0 billion) mainly relate to investments in the production of the new S-, A- and B-Class models and the new Sprinter, as well as investments in engine and transmission projects.

Inventories increased compared with December 31, 2017 by €1.0 billion to €10.5 billion. The increase is mainly related to unfinished and finished products.

Receivables, securities and other assets decreased compared with December 31, 2017 by €4.7 billion to €44.8 billion. The main reason for this development was the lower level of €5.4 billion in receivables due from subsidiaries, primarily resulting from sales of receivables in foreign currencies in the amount of €4.2 billion to a Group company during the year, and the decrease of €0.4 billion in securities. However, other assets increased by €1.0 billion. Cash and cash equivalents rose by €4.6 billion to €6.4 billion.

Gross liquidity – defined as cash and cash equivalents and other marketable securities as well as fixed-term deposits presented under other assets – increased by €4.7 billion to €14.3 billion on the balance sheet date. The main reason for the increase in gross liquidity was the €4.6 billion increase in cash and cash equivalents.

Cash provided by operating activities amounted to €13.8 billion in the 2018 financial year (2017: €7.2 billion). The increase resulted in particular from higher dividends from subsidiaries and lower receivables from the supply of goods and services to Group companies. In addition, higher cash-effective contributions were made to pension plan assets in the previous year.

Cash flows from investing activities resulted in a net cash outflow of €14.7 billion in 2018 (2017: €6.5 billion). The increase is primarily a reflection of restructuring within the Group in the area of financial assets in connection with Project Future. Positive effects resulted from acquisitions and sales of securities within the framework of liquidity management. Investments in intangible assets and in property, plant and equipment were at the prior-year level.

Cash flows from financing activities resulted in a net cash inflow of €5.5 billion (2017: outflow of €0.6 billion). The inflow is explained by higher liabilities from the Group’s internal transactions in connection with central financial and liquidity management. On the other hand, the decrease in external financing liabilities resulted in higher cash outflows than in the previous year. Cash flows from financing activities include the payment of the dividend for the year 2017 in an amount of €3.9 billion.

Equity increased in 2018 by €1.1 billion to €43.2 billion. This change primarily resulted from the net profit for 2018, of which, in accordance with Section 58 Subsection 2 of the German Stock Corporation Act (AktG), €1.5 billion was transferred to retained earnings. The equity ratio at December 31, 2018 was 36.9 % (December 31, 2017: 39.2 %). As stated in the notes to the annual financial statements according to the German Commercial Code (HGB), Daimler AG holds no treasury shares at December 31, 2018.

Provisions increased compared with December 31, 2017 by €2.4 billion to €16.4 billion. This resulted mainly from increased provisions for pensions and similar obligations, increased obligations in connection with sales transactions and warranties, legal proceedings and higher personnel and social provisions.

Provisions for pensions and similar obligations amounted to €0.8 billion at December 31, 2018 (2017: net defined-benefit plan asset of €3.5 billion). The change is primarily attributable to the transfer of pension obligations of €6.9 billion for retired employees and their surviving dependents to Daimler Pensionsfonds AG. To cover these pension obligations, special-purpose assets of €8.2 billion were transferred to Daimler Pensionsfonds AG. Additionally, the measurement of the pension obligations and the negative return on the special-purpose assets led to an increase in the provision.

Liabilities increased by €6.1 billion to €56.4 billion. This primarily reflects higher liabilities to subsidiaries and results in particular from purchase-price obligations from the Group’s internal restructuring in connection with Project Future. On the other hand, there were decreases in bonds and notes and liabilities to banks.

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