Mercedes 2006 Annual Report Download - page 61

Management Report | Profitability | 45
The Truck Group achieved an operating profit of €2,020 million
in 2006, a significant increase on the previous year’s result
of €1,606 million. The operating profit of the prior year included
exceptional income of €276 million from the settlement
reached with Mitsubishi Motors Corporation relating to charges
for quality actions and recall campaigns at Mitsubishi Fuso
Truck and Bus Corporation. The impact of other special factors
on the earnings of the two years is shown in the table on
page 43.
The increase in operating profit was primarily the result of effi-
ciency improvements realized in the context of the Global
Excellence Program as well as an improved product positioning
and model mix. In addition, higher unit sales, which were mainly
the result of purchases brought forward because of stricter
emission limits in important markets, contributed to the higher
earnings. Higher expenses for new vehicle projects and for
the fulfillment of future emission regulations were the main neg-
ative impacts on operating profit.
Financial Services significantly improved its operating profit
from €1,468 million in 2005 to €1,714 million in 2006.
The increase in operating profit was the result of higher new
business and ongoing efficiency improvements. These factors
more than offset higher expenses resulting from higher inter-
est rates and increased cost of risk. In addition, the business
development at Toll Collect also contributed to the positive
development of operating profit.
The Van, Bus, Other segment recorded an operating profit of
€913 million in 2006 (2005: €1,091 million). Operating profit
in 2006 includes charges of €393 million for the implementation
of the new management model. These charges were mainly
incurred for workforce reductions in the DaimlerChrysler Group’s
administrative areas. Exceptional income was achieved in
2006 from the sale of real-estate investments not required for
operating purposes (€133 million) and the consummation of
the sale of the off-highway business (€248 million). The operating
profit in 2005 included a positive operative contribution from
the off-highway business of €144 million.
The Van and Bus operating units again achieved positive results.
At Mercedes-Benz Vans, however, operating profit was reduced
by the launch of the new Sprinter. The Bus operating unit
increased its operating profit as a result of an improved product
positioning in Latin America and efficiency improvements in
the context of ongoing efficiency programs.
EADS contributed €649 million to the segment’s operating profit,
which was below the prior-year result of €757 million. The
reduction is primarily related to delays with the delivery of the
Airbus A380, but less favorable currency-hedging conditions
also negatively affected EADS’s operating results. Additional
charges arising at EADS in the fourth quarter of 2006 in connec-
tion with the delay of the Airbus A380, the decision on the
development of the Airbus A350 XWB and the efficiency-improv-
ing program are not reflected in operating profit due to the
three-month time lag with which EADS is included in the Daimler-
Chrysler Group.
The increase in eliminations with an effect on earnings resulted
primarily from the leasing business in Germany and the increase
in floor-plan financing for European dealers. The resulting
profits and losses on deliveries of vehicles between the divisions
have not been realized from a Group perspective and have
therefore been eliminated.