Mercedes 2015 Annual Report Download - page 81

88 B | COMBINED MANAGEMENT REPORT | PROFITABILITY
Consolidated statement of income
The Group’s total revenue increased by 15.1% to €149.5 billion
in 2015; adjusted for exchange-rate effects, it increased by
9.0%. The revenue growth primarily reflects the strong demand
for our products in nearly all divisions. Further information on
the development of revenue is provided in the E “Business
development” section of this Management Report.

B.18
Cost of sales amounted to €117.7 billion in 2015, increasing by
15.7% compared with the previous year. The rise in cost of
sales was caused by higher business volumes and consequentially
higher material expenses. Personnel expenses and deprecia-
tion of equipment on operating leases and of property, plant
and equipment also increased. Further information on cost
of sales is provided in E Note 5 of the Notes to the Consoli-
dated Financial Statements.

B.18
Gross profit therefore increased by 12.8% overall.
Due to the growth in unit sales, selling expenses increased by
€0.6 billion to €12.1 billion. The main factors here were higher
expenses for marketing and personnel. As a percentage of rev-
enue, selling expenses decreased from 8.9% to 8.1%.

B.18
General administrative expenses of €3.7 billion were above
the level of the previous year (2014: €3.3 billion), mainly driven
by higher IT and personnel expenses. As a percentage of reve-
nue, general administrative expenses decreased slightly to 2.5%
(2014: 2.6%).

B.18
Research and non-capitalized development costs increased
by €0.2 billion to €4.8 billion in 2015. They were mainly related
to the development of new models, advance expenditure for the
renewal of existing models and the further development of
fuel-efficient and environmentally friendly drive systems as well
as safety technologies and autonomous driving. As a propor-
tion of revenue, research and non-capitalized development costs
decreased from 3.5% to 3.2%. Further information on the
Group’s research and development costs is provided in the
“Research and development” section of the E “Sustain-
ability” chapter of this Management Report.

B.18
Other operating income increased to €2.1 billion (2014: €1.8
billion). Other operating expense decreased significantly to
€0.6 billion (2014: €1.2 billion), due in particular to expenses of
€0.6 billion in the previous year related to the ongoing antitrust
investigations of European manufacturers of commercial vehicles
by the EU Commission. Further information on the composition
of other operating income and expense is provided in E Note 6
of the Notes to the Consolidated Financial Statements.

B.18
In 2015, our share of profit from equity-method investments
decreased to €0.5 billion (2014: €0.9 billion). In 2014, Daimler
lost its significant influence on Tesla, which was previously
accounted for using the equity method; the subsequent remea-
surement of our Tesla shares resulted in a gain of €0.7 billion
in 2014.

B.18
Other financial expense/income decreased from an income
of €458 million to an expense of €27 million. This was primar-
ily due to the disposal of the RRPSH shares, which resulted in
a gain of €1.0 billion in 2014.

B.18
Net interest expense improved to €0.4 billion (2014: €0.6
billion). Expenses in connection with pension and healthcare
benefit obligations decreased, primarily due to lower applicable
interest rates. Other interest expense improved, mainly because
of the successive expiry of refinancing at high interest rates.

B.18
B.18
Consolidated statement of income
2015 2014 15/14
In millions of euros % change
Revenue 149,467 129,872 +15
Cost of sales -117,670 -101,688 +16
Gross profit 31,797 28,184 +13
Selling expenses -12,147 -11,534 +5
General administrative expenses -3,710 -3,329 +11
Research and non-capitalized
development costs
-4,760
-4,532 +5
Other operating income 2,114 1,759 +20
Other operating expense -555 -1,160 -52
Share of profit from equity-method
investments, net
464
897 -48
Other financial expense, net -27 458 .
Interest income 170 145 +17
Interest expense -602 -715 -16
Profit before income taxes 12,744 10,173 +25
Income taxes -4,033 -2,883 +40
Net profit 8,711 7,290 +19
thereof
attributable to non-controlling
interests
287
328
-13
thereof
attributable to shareholders
of Daimler AG
8,424
6,962 +21