Mercedes 2002 Annual Report Download - page 14

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Significant earnings improvement due to measures
taken to improve competitiveness
In 2002, DaimlerChrysler achieved an operating profit
excluding one-time effects of 15.8 billion. Despite
difficult market conditions worldwide, this result is more
than four times as high as in 2001 (11.3 billion). The
significant improvement in earnings was primarily due
to the successful implementation of programs to
increase efficiency and improve competitiveness in all
business units, in particular at Chrysler Group and
Freightliner.
Operating profit including one-time effects was 16.9
billion, after an operating loss of 11.3 billion in 2001.
Positive one-time effects were reported totalling 12.6
billion. These include one-time gains as a result of the
sale of our 49.9% ownership interest in T-Systems ITS
(formerly debis Systemhaus) and of the sale of our 40%
stake in TEMIC. One-time expenses of 11.6 billion were
incurred at Chrysler Group in connection with the turn-
around plan announced in February 2001, as well as
at the Commercial Vehicles and Services divisions (see
pages 68-71).
Despite higher expenditure on the introduction of new
models and difficult market conditions, the contribution
to earnings of 13.0 billion made by the Mercedes Car
Group division slightly exceeded the high prior year’s
result. Chrysler Group again achieved a positive operat-
ing profit, 11.3 billion excluding and 10.6 billion includ-
ing one-time effects, reflecting in particular the positive
effects on profitability from the activities aimed at
cutting costs and improving efficiency. The moderate
increase in the Commercial Vehicles division’s operating
Business Review
8|Business Review
profit (adjusted to exclude one-time effects) over the
prior year’s result was partly the result of the progress
made at Freightliner and was achieved against the back-
drop of an unfavorable market situation. The Services
division succeeded in increasing its adjusted operating
profit due to more favorable refinancing conditions and
a lower risk-provisioning requirement in the financial-
services business. Other Activities contributed a total of
1747 million (2001: 1205 million) to the Group’s total
operating profit excluding one-time effects, reflecting in
particular the higher profit contribution from Mitsubishi
Motors (see pages 50-51). The MTU Aero Engines
business unit and EADS also made positive contributions
to DaimlerChrysler’s operating profit once again (see
pages 48-50).
Net income excluding one-time effects rose to 13.3
billion, after 10.7 billion in 2001 (net earnings per share
of 13.30 after earnings per share of 10.73 in 2001).
Including one-time effects, net income rose to 14.7
billion after a net loss of 10.7 billion in the prior year,
and earnings per share improved to 14.68 after a loss
per share of 10.66 in 2001.
Proposed higher dividend of 31.50
As a result of the significant improvement in earnings,
the Board of Management and the Supervisory Board
will propose to the shareholders at the Annual Meeting
that the dividend for 2002 is increased to 11.50 per
share (2001: 11.00). The total dividend distribution will
therefore increase from 11,003 million to 11,519
million.
No stimulus from the global economy
In the first half of 2002 there were still hopes of a global
economic upswing in the second half of the year.
Unfortunately this did not materialize. Although growth
in North America was a little stronger than in the weak
prior year, it was not strong and stable enough to deliver
any real stimulus to the world economy, and growth
rates in Western Europe remained at a low level. Japan’s
economic output declined once again in 2002, and
economic and financial crises led to recession in many
of the countries of South America. However, there were
above-average growth rates in the emerging markets of
Operating profit excluding one-time effects of 35.8 billion,
more than four times as high as in 2001 despite unfavorable
global economic backdrop |Continued high earnings
at Mercedes Car Group |Significantly improved efficiency at
Chrysler Group and Freightliner |Increased earnings at
Services |Net income of 34.7 billion again strongly positive
(2001: net loss of 30.7 billion); adjusted to exclude one-time
effects 53.3 billion (2001: 50.7 billion) |Proposed dividend
of 51.50 per share (2001: 51.00)