Mercedes 2015 Annual Report Download - page 148

B | COMBINED MANAGEMENT REPORT | OUTLOOK 155
Daimler Financial Services aims to achieve further growth in
the coming years. For the year 2016, we anticipate slight
growth in new business and further growth in contract volume.
This will be driven by the growth offensives of the automotive
divisions. In addition, we are utilizing new market potential
especially in Asia, and applying new and digital possibilities
for customer contacts – in particular by systematically further
developing our online sales channels. We see good growth
opportunities also in the field of innovative mobility services,
where we are active with the brands car2go, moovel, Ridescout
and mytaxi, as well as with investments in the companies
Blacklane and MeinFernbus FlixBus.
On the basis of our assumptions concerning the development
of automotive markets and the divisions’ planning, we expect
the Daimler Group to achieve further significant growth in
total unit sales in 2016. However, the rate of growth is likely
to be rather lower than in 2015, which featured exceptional
dynamism.
Revenue and earnings
We assume that the Daimler Group’s revenue will grow slightly
in 2016. Daimler will therefore continue along its growth path.
The most positive aspect is the ongoing growth in unit sales by
the automotive divisions.
Without exception, our divisions currently have a very attractive
and particularly competitive product range, which has been
expanded and consistently renewed in recent years. We there-
fore assume that Daimler will profit to an above-average
extent from the slight growth in global demand for automobiles
that we expect for 2016, and will be able to strengthen its posi-
tion in important markets. At Mercedes-Benz Cars, additional
growth this year will be driven above all by the new SUVs and
the new E-Class models. The other automotive divisions are
also extremely well positioned with their products, and
Daimler Financial Services’ new business will profit from further
growth in unit sales. We anticipate significant revenue growth
at Mercedes-Benz Cars and Mercedes-Benz Vans and expect
Daimler Trucks and Daimler Buses to post revenue in the
magnitude of the previous year. We assume that the Daimler
Financial Services division will slightly increase its revenue.
In regional terms, we expect the highest growth rates in Asia
and Western Europe, but our business volumes should expand
also in the other regions. In particular in China, we have
created the right conditions for further growth with new sales
outlets and additional production capacities. But the continuing
growth in unit sales in China will have a disproportionately
low impact on revenue growth, as the share of local production
will increase. Our Chinese associated company Beijing Benz
Automotive China (BBAC) is included in our consolidated finan-
cial statements using the equity method of accounting.
The growth in unit sales and revenue that we anticipate will
have a positive impact on earnings in 2016.
We have laid the foundations for a lasting high level of earnings
with the programs “Fit for Leadership” at Mercedes-Benz Cars,
“Daimler Trucks #1” at Daimler Trucks, “Performance Vans” at
Mercedes-Benz Vans and “GLOBE 2013” at Daimler Buses.
With these programs, we achieved total profit contributions of
approximately €4 billion by the end of 2014, by taking mea-
sures for sustained improvements in cost structures as well as
through additional business activities. The full effect of these
programs was already reflected in 2015. In addition to these
measures for improved cost structures with short-term
effects, we are taking measures in all divisions for the long-term
structural optimization of our business system. In all divisions,
we are standardizing and modularizing our production processes,
for example with the intelligent use of vehicle platforms to
achieve further cost advantages. In parallel, we are pushing
forward with digital connectivity: in all divisions and along
the entire value chain – from development to production to sales
and service. This gives us additional scope to become faster,
more flexible and more efficient – for the benefit of our customers.
These long-term structural measures already had a positive
impact on earnings in 2015, and will facilitate further efficiency
gains in the coming years.
There will be opposing effects, however, from the ongoing high
expenditure for our model offensive, for innovative technologies
for the digitization of our products and processes, and for the
expansion and modernization of our worldwide production
facilities. As a result, our expenditure aimed at securing our
successful future will once again be higher in 2016 than in
the previous year. E page 71
After the development of currency exchange rates had an over-
all very positive impact on revenue and earnings in the year
2015, this effect is likely to be significantly less pronounced in
2016. Last year, the appreciation of the US dollar and some
other currencies such as the Chinese renminbi led to positive
exchange-rate effects. There were also some significant
negative effects, in particular from the depreciation of the
Russian ruble.
On the basis of the anticipated market development, the
aforementioned factors and the planning of our divisions, we
assume that Group EBIT from the ongoing business will
increase slightly in 2016.
For the individual divisions, we have set ourselves the following
targets for EBIT from the ongoing business in the year 2016:
– Mercedes-Benz Cars: slightly above the prior-year level,
– Daimler Trucks: at the prior-year level,
– Mercedes-Benz Vans: slightly above the prior-year level,
– Daimler Buses: slightly above the prior-year level, and
– Daimler Financial Services: slightly above the prior-year level.