Mercedes 2009 Annual Report Download - page 104

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The Board of Management believes that, like the entire automotive
industry, the Daimler Group still faces great challenges at the
time of preparing this Management Report. Although there are
signs that the worst of the industry’s global sales crisis was
passed in the middle of 2009, the effects of the crisis are still
noticeable. Many of our important markets stabilized at very
low levels compared to the years 2007 and 2008, and are now
in an upward development that is still very hesitant. Even if
this upward trend – as we expect – stabilizes and accelerates,
our core markets of North America, Western Europe and Japan
will only regain their magnitudes of the years before the global
financial and economic crisis in the medium term. It is true
that new markets such as China and India will provide a certain
degree of compensation, but we have to assume that we will
achieve our growth targets in terms of unit sales, revenue and
earnings somewhat later than we anticipated before the crisis.
An additional factor is that the present sales crisis of the auto-
motive industry is accompanied by fundamental technological
changes. This not only requires substantial expenditure for
research and development, but also entails a process of struc-
tural adjustment. Key challenges are the penetration of growth
markets outside the United States, Western Europe and Japan,
and above all the expansion of our product range to include
fuel-efficient and environmentally friendly vehicles. There will
be an increasing focus on concepts for sustainable mobility.
But the resulting replacement of existing vehicles with more eco-
nomical and environmentally friendly vehicles will open up
great sales opportunities – particularly for us as a manufacturer
of high-quality vehicles. And we intend to make good use of
these opportunities as a technology leader in the field of sustain-
able mobility.
In the year 2009, the Daimler Group’s unit sales of 1.6 million
vehicles were significantly below the level of the prior year.
Revenue decreased by 20% to €78.9 billion. Operating profit
(EBIT) improved substantially as the year progressed and was
positive again in the third and fourth quarters. But due to the high
losses in the first half of the year, full-year EBIT was negative
at minus €1.5 billion and the Group posted a net loss for the year
2009 of €2.6 billion.
Due to the weak first half of the year, the Mercedes-Benz Cars
division suffered a sharp drop in earnings, posting EBIT of minus
€0.5 billion. Daimler Trucks also recorded a loss with EBIT of
minus €1.0 billion; of which €340 million represents charges relat-
ing to expenditure for the repositioning of our business in North
America and Asia. Mercedes-Benz Vans division returned to prof-
itability in the third quarter, its EBIT for the full year was slightly
positive. Daimler Buses made a significantly positive contribution
to the Group’s earnings also in the crisis year. The Daimler Finan-
cial Services division was affected by the financial and economic
crisis as well, but also delivered positive EBIT despite its signifi-
cantly higher cost of risk.
We reacted quickly and effectively to the dramatic falls in unit
sales and earnings and to the changed economic situation.
We rapidly implemented cost-reducing actions with a total volume
of €5.3 billion, allowing us to achieve positive earnings even
with
difficult market conditions. The success of these measures
was already apparent in the second half of 2009. Furthermore,
the efficiency-enhancing programs running in all our divisions have
been intensified and in some cases supplemented with structural
components.
At the same time, we are pushing forward with our research and
development work in line with our initiative “The Road to Emission-
free mobility” – and we are not making any cutbacks in this area.
We will further improve the environmental compatibility and fuel
efficiency of our vehicles with the application of new technologies,
while attracting and retaining customers with our typical product
features of safety, comfort and above all fascination.
Overall Assessment of the Economic Situation