Mercedes 2008 Annual Report Download - page 58

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Daimler Financial Services posted EBIT of €677 million in
2008, surpassing its prior-year result of €630 million. The return
on equity was 15.1% (2007: 14.8%).
The main factor with a positive effect on earnings was the
increased contract volume. There was a negative impact on
earnings, however, from the increased cost of risk.
The EBIT of Vans, Buses, Other amounted to minus €1,239 million
in 2008 (2007: €1,956 million). The reasons for the sharp de-
cline in EBIT were on the one hand our proportionate share in the
losses at Chrysler and related charges; on the other hand, prior-
year earnings included high gains related to the transfer of portions
of the Group’s equity interest in EADS (2008: €130 million;
2007: €1,573 million). The sale of the Group’s real estate properties
at Potsdamer Platz resulted in a gain of €449 million in 2008.
Mercedes-Benz Vans achieved EBIT of €818 million in 2008
as a result of its positive revenue situation (2007: €571 million);
its return on sales was 8.6% (2007: 6.1%).
The EBIT posted by Daimler Buses improved due to its strong
unit sales from €308 million to €406 million; its return on sales
was 8.4% compared with 7.1% in the prior year.
Our 19.9% share in Chrysler’s losses reduced EBIT by €1,390
million in 2008 (2007: charge of €377 million). We also recorded
charges of €1,838 million as a result of the impairment of loans
and other assets relating to Chrysler. See Note 12 of the Notes to
the Consolidated Financial Statements for more information on
Chrysler.
Daimler’s share in the net results of EADS amounted to €177
million (2007: €13 million). The increase was primarily due to the
fact that EADS’s 2007 results were burdened by higher expenses
in connection with the Power8 restructuring program and delivery
delays for the Airbus A400M.
The reconciliation to Group EBIT includes corporate expenses
(2008: €442 million; 2007: €785 million) and income from the
elimination of internal transactions within the Group (2008: €10
million; 2007: €35 million).
in %
Return on Sales
10
8
6
4
2
0
2006
2007
2008
Mercedes-Benz
Cars
Daimler Trucks Mercedes-Benz
Vans
Daimler Buses
in %
Return on Equity
25
20
15
10
5
0
2006
2007
2008
Daimler Financial Services
The EBIT of €2,117 million reported by Mercedes-Benz Cars for
the year 2008 was significantly lower than its prior-year EBIT of
€4,753 million. The return on sales in 2008 was 4.4% (2007: 9.1%).
Although earnings in the first six months of 2008 showed a posi-
tive development, the abrupt decline in demand from the NAFTA
region and the major European markets beginning in the third
quarter of the year had a significant negative effect on EBIT.
Worldwide unit sales were 2% lower than in the prior year. Addi-
tional factors that burdened EBIT resulted from a less favorable
model mix and currency effects. The reassessment of leased vehic-
les’ residual values, which became necessary due to the signifi-
cant weakening of the world economy in the second half of 2008,
led to expenses of €465 million. Sales incentives and increased
raw-material prices had also a negative effect on EBIT. These nega-
tive effects were only partially offset by further efficiency
improvements. A gain of €84 million was recognized in 2008 in
connection with an amendment of a pension benefit plan.
The Daimler Trucks division achieved EBIT of €1,607 million
in 2008 (2007: €2,121 million); its return on sales was 5.6%
compared with 7.5% in the prior year.
The reduction in EBIT was primarily due to lower vehicle shipments
as a result of the ongoing difficult economic situation in the
NAFTA region. Additional negative factors were currency effects
and increased raw-material prices. The measures initiated in
2008 to optimize and strengthen the business operations of
Daimler Trucks North America resulted in expenses of €233 mil-
lion. There were positive effects on earnings from higher unit
sales of trucks in Brazil and Asia, good product positioning and
further efficiency improvements. Adjustments of pension benefit
plans led to gains of €29 million in 2008 and €86 million in
2007. The prior-year result also includes a gain on the sale of real
estate properties in Japan (€78 million).