Mercedes 2004 Annual Report Download - page 9
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5
We owe this success principally to the dedication and outstanding performance of our 385,000
employees around the world. The Board of Management is grateful to each and every one of these
people.
Dear shareholders, it is against this background that we will once again recommend for your approval
at the Annual Meeting in April an attractive dividend of €1.50 per share. This proposal takes into
account the development of our operative business, as well as the business outlook for the years
ahead.
I would now like to provide you with an overview of the individual divisions’ performance in 2004.
The Mercedes Car Group last year posted an operating profit of €1.7 billion, and Mercedes-Benz
remains the world’s best-selling premium automotive brand. The E-Class, S-Class, C-Class, SLK and SL
are all global market leaders in their segments.
Nonetheless, the level of earnings in the third and fourth quarters of 2004 was unacceptable. The
substantial decline in these earnings resulted from high startup costs of the second product offensive;
expenditure flowing from an extensive quality offensive; additional charges at smart; and the distinctly
negative impact of a stronger euro in relation to the US dollar.
We have therefore taken wide-ranging measures to restore the Mercedes Car Group to its accustomed
profitability. The entire Mercedes Car Group value chain is being improved with a strong emphasis on
top quality, optimized costs and increased revenues.
Of course the subject of quality is of particular importance to us. The vehicles currently rolling off our
assembly lines reveal the highest level of quality ever achieved by Mercedes-Benz. We have worked
hard over the past few years to ensure that this would happen. With regard to vehicles in the market
that do not meet our quality standards, we have implemented measures with a clear target: everything
must be done at benchmark levels. The ultimate goal is clear: to consolidate Mercedes-Benz’s number
one position, and also achieve this in terms of quality. This will cost money in the short-term, but the
investment will be worthwhile.
smart’s products are good, and the brand has already attained a degree of cult status among many
customers and admirers. smart has a strong foundation, but its current financial performance is
inadequate. That is why we are striving to develop a sustainable long-term business model.