Mercedes 2010 Annual Report Download - page 106

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Because of this positive earnings trend, our key figures improved
significantly in 2010. The Group’s overall equity ratio increased
from 24.7% to 26.5% and the equity ratio of the industrial business
rose from 42.6% to 45.8%. The free cash flow of the industrial
business – the parameter we use to measure our financial strength
– increased by €2.7 billion to €5.4 billion in 2010. This means that
the net liquidity of our industrial business also improved during the
course of the year: from €7.3 billion to €11.9 billion.
After deciding not to pay a dividend last year in view of the net
loss in 2009, we now want our shareholders to participate again
appropriately in our financial success. In setting the dividend,
we aim to distribute approximately 40% of the Group’s net profit
attributable to the Daimler shareholders. On this basis, the Board
of Management and the Supervisory Board have decided to
recommend to the shareholders for their approval at the Annual
Meeting to be held on April 13, 2011 that a dividend of €1.85
per share be paid out. The total dividend payout will then amount
to €1,971 million.
We are well prepared for the challenges of the coming years.
From the starting point of a sound financial basis, we are continuing
and intensifying our research and development work. During the
planning period of 2011 through 2012, Daimler will invest a total
of €10.3 billion in research and development activities. Our objec-
tive is to strengthen Daimler’s competitive position against the
backdrop of the upcoming technological challenges. We intend
to convince the markets with innovative solutions for low-emission
and safe mobility.
With a volume of more than €10 billion, we will also significantly
increase our capital expenditure in the years 2011 and 2012.
The focus will be on preparing for numerous product launches as
well as expanding and modernizing our production facilities. In
order to penetrate markets in the developing economies, we are
increasingly investing in local production capacities, especially
in China, India and Russia. We can only ensure that we profit from
the future growth of those markets by having an effective local
presence.
Daimler is a financially healthy, strong and above all innovative
company. We therefore enter the year 2011 with great confidence.
On the whole, Daimler’s business developed substantially better in
2010 than we expected at the beginning of the year. Daimler has
emerged strengthened and with great dynamism from the global
financial and economic crisis. We made use of the years 2009
and 2010 to significantly increase our efficiency and to achieve
a sustained improvement in our cost basis. We are now profiting
from the fact that we steadily continued with our projects for secur-
ing our future also through the financial and economic crisis.
As a result, we now have a large number of new and attractive prod-
ucts and pioneering technologies to offer our customers. In addi-
tion, our long-term and wide-ranging involvement in markets such
as China, India, Brazil and Russia started to pay off significantly
in the year under review. This is due not least to the fact that the
recovery of worldwide automotive demand has been driven not
by our established markets, but by the growth markets of Asia and
Latin America.
Against this backdrop, all of Daimler’s automotive divisions
significantly increased their unit sales in the year 2010. In fact,
Mercedes-Benz Cars and Daimler Buses approached the levels
they achieved in 2008. Daimler Trucks and Mercedes-Benz Vans
posted double-digit growth rates despite the hesitant upswing
of markets for commercial vehicles, but their unit sales were still
below the record levels of the years before the crisis. The Daimler
Group’s revenue increased at an even higher rate than its unit sales
– by 24% to €97.8 billion. One reason for this development
is that the structure of unit sales at Mercedes-Benz Cars shifted
towards higher-value vehicles with the market success of the
new E-Class models and the S-Class.
The earnings turnaround was particularly impressive: After posting
a loss in 2009, we achieved EBIT of €7.3 billion and net profit
of €4.7 billion last year. The main contribution to this result came
from Mercedes-Benz Cars. Both the Daimler Trucks division and
the Mercedes-Benz Vans division significantly improved their EBIT.
But Daimler Buses’ earnings were also above the prior-year level
and Daimler Financial Services’ EBIT reached the very high level of
€831 million (2009: €9 million).
Overall Assessment of the Economic Situation