Mercedes 1998 Annual Report Download - page 47

SERVICES
43
Operating Profit
Revenues
Financial Services
IT Sevices
Telecom Services
Investment in Property,
Plant and Equipment
Employees (12/31)
Amounts in Millions
460
11,232
6,866
2,633
1,762
334
392
9,573
5,852
2,244
1,502
285
20,221
246
7,924
5,102
1,613
1,182
193
14,898
DYNAMIC GROWTH CONTINUES. In 1998, the dynamic growth of
DaimlerChrysler Services AG continued for the ninth con-
secutive year. All business units – Financial Services, IT Ser-
vices and Telecom Services - showed remarkable development
and increased the volume of their business. Revenues increased
by 21% to € 9.6 billion. For the first time, more than half of the
division’s turnover, € 5.0 billion, came from outside Germany.
In addition, we commenced business operations in a further 10
countries.
OPERATING PROFIT INCREASED BY 59%. Once again, we were
able to show an improved result. Operating profit, the figure
which indicates the success of the division’s operations, was, at
€ 392 million, 59% higher than for 1997. All business units
contributed to this success by significantly improving their
results.
IMPROVED PROSPECTS FOR GROWTH THROUGH DAIMLER-
CHRYSLER. The merger of Chrysler Corporation with Daimler-
Benz AG has also opened up excellent new prospects for growth
in the services sector. As a result of merging the activities of
Chrysler Financial Company L.L.C. with those of debis at the
beginning of 1999, the Services Division is in a position to
expand its strategically important position within
DaimlerChrysler still further. With a portfolio of more than
€ 70 billion, DaimlerChrysler Services AG has grown into the
fourth-largest financial services company in the world outside of
the banking and insurance sector. Through the merger, it has an
extremely good market position, and can continue to grow with
the support of the financial strength of DaimlerChrysler. We
have integrated the former division of Trade Finance into the
division of Financial Services as debis Trade Finance. Since
January 1, 1999, now that the Potsdamer Platz project is largely
complete, real estate management operations have been the
direct responsibility of the financial unit of DaimlerChrysler AG.
In 1998 real estate management achieved a business volume of
€ 82 million (1997: € 112 million). These revenues are included
in the sales of DaimlerChrysler Services.
MORE THAN 5,000 NEW JOBS. At the end of 1998, the Services
Division employed 5,323 more staff than in 1997, the number of
employees increasing to 20,221. Our German companies
employed 13,519 persons (+25%), while an additional 6,702
(+66%) were employed in other countries. This, too, reflects the
increasing internationalization of our activities. The number of
people employed by debis has increased by 8,700 over the last
two years.
FINANCIAL SERVICES: STRONG GROWTH CONTINUED IN 1998.
The Financial Services unit, with 95 operating companies in 29
countries, increased revenues by 15% to € 5.9 billion. At the
same time, new business expanded by 24% to € 15.5 billion.
Contract levels also reached a new high, with € 27.5 billion.
Along with the gratifying trend in North America and Western
Europe, where we were able to expand our portfolio by 15% and
27%, respectively, debis also succeeded in increasing contracts
in Asia by 23% to € 1.5 billion, despite the economic and
financial crisis. In the field of insurance (debis Insurance
Brokerage) we were able to increase premium volume by 7% to
€ 0.6 billion. The Trade Finance division raised its countertrade
volume by 18% to € 341 million.
IT SERVICES: BUSINESS OUTSIDE GERMANY GAINING IN IM-
PORTANCE. The IT Services division continued the positive
trend 1997 and increased its revenues by 39% to a current level
of more than € 2.2 billion, with 69% of that business with
customers outside of DaimlerChrysler. Revenues abroad showed
above-average growth, increasing by 97% to € 0.6 billion.
IT Services offers a complete range of IT services, from
consulting (Plan) through the development of software solutions
(Build) to the operation of application systems, mainframe
centers, networks and desktop services (Run). Along with the
general expansion of business, we have established a number of
new companies abroad, including Brazil, Japan, Singapore, the
Philippines, Russia, Hungary, the Czech Republic and Poland.
TELECOM SERVICES: SUCCESSFUL START ON THE FIXED NET-
WORK. debis Telecom Services achieved revenues of € 1.5
billion (1997: € 1.2 billion) with its activities in telecommuni-
cations, traffic telematics, traffic consulting and planning, and
online services. With its successful move into the fixed
telephone network, debitel has now become one of the most
important suppliers offering a complete range of services in the
telecommunications market. We also have 3 million (1997: 1.7
million) mobile telecommunication customers throughout
Europe. In Germany, debitel has around 1.8 million cellular
phone subscribers, and thereby remains first among the mobile
service providers. We have also expanded our business volume
significantly in the fields of traffic telematics and electronic
commerce.
To give debitel also direct access to the international money
markets, the two major shareholders, debis and Metro decided
to convert debitel into a joint-stock company. In March 1999, at
least 20% of the share capital will be placed with private and
institutional investors in Germany and abroad.
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