Mercedes 2015 Annual Report Download - page 95

102 B | COMBINED MANAGEMENT REPORT | DAIMLER AG
In addition to reporting on the Daimler Group, in this chapter,
we also describe the development of Daimler AG.
Daimler AG is the parent company of the Daimler Group and
is domiciled in Stuttgart. Its principal business activities
comprise the development, production and distribution of cars,
vans and trucks in Germany and the management of the
activities of the Daimler Group.
The vehicles are produced at the domestic plants of Daimler AG,
as well as under contract-manufacturing agreements by
domestic and foreign subsidiaries and by producers of special
vehicles. Daimler AG distributes its products through its
own sales-and-service network, which is organized in seven
regional centers for cars and seven for commercial vehicles,
through foreign sales subsidiaries and through third parties.
The annual financial statements of Daimler AG are prepared in
accordance with the German Commercial Code (HGB). The
consolidated financial statements are prepared in accordance
with the International Financial Reporting Standards (IFRS),
as adopted by the European Union (EU). This results in some
differences with regard to recognition and measurement,
primarily relating to intangible assets, provisions, financial
instruments, the leasing business and deferred taxes.
The main performance indicators for Daimler AG are unit
sales, revenue and net profit.
Profitability
Profit from ordinary activities reported by Daimler AG for
2015 amounts to €4.7 billion (2014: €5.0 billion). The develop-
ment of earnings reflects the increase in operating profit of
€1.2 billion to €2.6 billion and the decrease in financial income
of €1.5 billion to €2.1 billion.  B.36
Revenue increased, as forecast in the previous year, due to
higher unit sales of vehicles and components by €17.6 billion to
€101.5 billion. In the car business, revenue thus rose by 24%
to €77.9 billion. Also with trucks and vans, higher unit sales of
vehicles and components led to an increase in revenue of
13% to €23.6 billion.
The earnings achieved by the car business in 2015 were signi-
ficantly higher than in the previous year. The development
of earnings was influenced by ongoing growth in unit sales in
Europe, the United States and Asia. There were opposing,
negative effects from expenditure for new products and techno-
logies, amongst other factors. Unit sales in the car business
increased by 14% to 1,790,000 vehicles1 in the year under review.
Of the various model series, the new C-Class was extremely
successful in 2015 with a 29% increase in unit sales to 375,000
vehicles1. SUVs (including the GLA) posted sales growth of
19% to 455,000 units1.
Earnings from trucks and vans were significantly higher than in
2014. Sales of trucks increased by 11% to 102,000 units1. Sales
of vans increased by 12% to 314,000 units1.
Cost of sales increased by 22% to €91.7 billion. Increases in
unit sales and expenses for new products and technologies led
to higher cost of sales. Research and development expenses,
which are included in cost of sales, were higher than in the
previous year at €5.6 billion (2014: €4.9 billion); as a proportion
of revenue, they amounted to 5.5% (2014: 5.8%). Research
and development expenses were primarily related to the renewal
and expansion of the product portfolio, especially with regard
to the model series of the E-Class, the SUVs and the compact
class. In addition, we are continuously working on new genera-
tions of engines and alternative drive systems. At the end of the
year, approximately 18,000 people were employed in the
area of research and development.
1 Unit sales relate solely to new vehicles. The unit sales of Daimler AG
include vehicles invoiced to companies of the Group which have not yet
been sold on to external customers by those companies. Vehicle sales
by production companies of the Daimler Group to external customers and
subsidiaries of Daimler AG are not counted in unit sales.
Daimler AG
Condensed version according to the German Commercial Code (HGB)