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Daimler Speeds to Record Profits, Sales in 2015

Feb. 4, 2016
Even after CEO Dieter Zetsche said that “everything indicates that 2016 will be another good year,” investors sold off shares of the company because profits might not be high enough.

FRANKFURT, Germany — Auto giant Daimler expressed confidence on Thursday for its outlook this year after achieving new record levels of sales and earnings in 2015. Investors, though, were still disappointed because Daimler said it was projecting only a “slight” increase in business and profits this year.

“Daimler grew profitably once again in 2015 and once more achieved record levels of unit sales and revenue, as well as (underlying) and net profit, with contributions from all divisions,” the group said in a statement.

In 2015, net profit jumped by 23% to 8.9 billion euros ($9.96 billion), operating profit was up 36% at 13.8 billion euros ($15.45 billion), and revenues climbed by 15% to 149.5 billion euros ($167.38 billion). Daimler said that worldwide vehicle sales were up 12% at 2.853 million units. 

“2015 was a good year for Daimler,” CEO Dieter Zetsche said. “And everything indicates that 2016 will be another good year.”

And in view of such confidence, Daimler said it would increase its payout to shareholders and also award a bonus to employees of up to 5,650 euros ($6,325). 

“At the annual shareholders’ meeting on April 6,the board of management and the supervisory board will propose the distribution of a dividend of 3.25 euros ($3.64) per share from 2.45 euros ($2.74) per share,” finance chief Bodo Uebber said.

Confident for 2016

“With the dividend again increased and thus the highest ever profit distribution by Daimler, we will as usual let the shareholders participate in the company’s success, while expressing our confidence about the ongoing course of business,” Uebber said. 

For 2016, “the group assumes that it will profit to an above-average extent from the anticipated slight growth in global demand for automobiles, thus strengthening its position in major markets and further increasing its unit sales. Accordingly, further growth is expected in revenue” and underlying profit, Daimler said. 

But to the disappointment of investors, the carmaker said that both revenue and operating profit would grow “slightly” in 2016.

That sparked a sell-off of Daimler’s shares on the Frankfurt stock exchange, where they were the biggest losers shortly before midday, showing a loss of 3.5% in a generally firmer market.

Uebber pointed out that the carmaker would invest heavily in digitalization and in electric cars. 

CEO Zetsche insisted that the tone of the forecasts should not be seen as cautious. After a record year last year, “we’re predicting further growth,” he said. 

January had gotten off to a good start with double-digit increase in worldwide sales, Zetsche said. And in China, now Daimler’s biggest market and a key factor in the group’s success last year, “we’re anticipating a very positive year. We think we’ll be able to go gain new market share,” he said. 

While concerns about the economic slowdown in China have sent global stock markets sharply lower recently, and rivals BMW and Volkswagen have started to feel the pinch, Daimler’s sales in China jumped by 41% in 2015. And business promises to remain dynamic again this year, even if growth rates will be more moderate, Daimler said. 

Generally speaking, the global economic environment held “more risks than opportunities,” Zetsche conceded. Daimler is penciling in growth of three or 4% for global car demand this year.

Zetsche said that Daimler was not experiencing any fallout from the massive emissions-cheating scandal that has engulfed rival Volkswagen. 

Copyright Agence France-Presse, 2016

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