Mercedes 2013 Annual Report Download - page 85

89
C | Combined Management Report | Profitability
Statement of income
The Group’s total revenue increased by 3.2% to €118.0 billion
in 2013; adjusted for exchange rate effects, it increased by
7.3%. The revenue growth primarily reflects the higher unit sales
by all automotive divisions and the increased contract volume
at Daimler Financial Services. Further information on the devel-
opment of revenue is provided in the E “Business development”
section of this Management Report.
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Cost of sales amounted to €92.5 billion in 2013, increasing
by approximately 4% compared with the prior year. The increase
in cost of sales was caused by higher business volumes
and consequentially higher material and personnel expenses.
Furthermore, depreciation of equipment on operating leases
increased along with the growing leasing business. There were
opposing effects from lower expenses for refinancing at
Daimler Financial Services. Compared with the Group revenue,
which increased by 3.2% and was influenced by the deprecia-
tion of major currencies, cost of sales increased by 4.1%, so gross
profit in relation to revenue fell to 21.6% (2012: 22.3%). The
changed product mix also had an impact on this development.
Further information on cost of sales is provided in E Note 5
of the Notes to the Consolidated Financial Statements.
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Due to the growth in unit sales, selling expenses increased
by €0.4 billion to €10.9 billion. The main factors here were
higher expenses for marketing, personnel and IT services.
As a percentage of revenue, selling expenses increased from
9.1% to 9.2%.
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General administrative expenses of €3.9 billion were
slightly below the level of the previous year (2012: €4.0 billion),
mainly driven by exchange rate effects. As a percentage of
revenue, general administrative expenses decreased slightly
to 3.3% (2012: 3.5%).
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Research and non-capitalized development costs were
almost unchanged compared with the previous year at €4.1 billion
(2012: €4.2 billion). They were mainly related to advance
expenditure for the development of new models, the renewal
of existing models, and the further development of fuel-
efficient and environmentally friendly drive systems and safety
technologies. As a proportion of revenue, research and
development costs decreased from 3.7% to 3.5%. Further infor-
mation on the Group’s research and development costs is
provided in the “Research and development, environmental
protection” section of the E “Sustainability” chapter.
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Other operating income of €1.5 billion (2012: €1.5 billion)
was at the prior-year level while other operating expense
increased slightly to €0.4 billion (2012: €0.3 billion). 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.
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In 2013, our share of profit from investments accounted for
using the equity method improved to €3.3 billion (2012:
€1.2 billion). Both years were affected by large gains relating
to the loss of significant influence and the disposal of EADS
shares. In 2013, Daimler lost its significant influence on EADS;
this resulted in a gain of €3.4 billion. In 2012, 7.5% of the
shares of EADS were sold with a resulting gain of €0.9 billion.
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Other financial expense improved from €0.5 billion
to €0.3 billion. This is primarily due to lower expenses from
the compounding of provisions and effects from changes
in discount rates totaling €0.1 billion (2012: €0.5 billion).
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The Group recorded a net interest expense of €0.7 billion
(2012: €0.7 billion). While expenses related to pension and
healthcare obligations were close to the prior-year level, other
interest income improved slightly. This development was
primarily due to measurement effects of interest hedging
instruments, which serve to secure the Group’s refinancing.
Lower interest rates for cash deposits and higher levels
of liquidity offset each other.
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The income tax expense increased only slightly to €1.4
billion (2012: €1.3 billion), despite higher profit before income
taxes. The effective tax rate for 2013 was 14.0% (2012: 15.8%).
The lower effective tax rate was mainly the result of tax-free
gains on the remeasurement and sale of EADS shares. Additional
factors in both years were tax benefits in connection with
the tax assessment of prior years.
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Net profit for the year amounts to €8.7 billion (2012:
€6.8 billion). Net profit of €1.9 billion is attributable to non-
controlling interests (2012: €0.4 billion), a large portion of which
in 2013 is related to the remeasurement of the EADS shares.
Net profit attributable to shareholders of Daimler AG
amounts to €6.8 billion (2012: €6.4 billion), representing
earnings per share of €6.40 (2012: €6.02).
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The calculation of earnings per share (basic) is based
on an average number of outstanding shares of 1,068.8 million
(2012: 1,066.8 million).