Daimler Group’s total unit sales declined by 1% to 822,000 passenger cars and commercial vehicles in Q2 2019
Daimler AG has reported results for the second quarter ended June 30, 2019. The Group’s total unit sales declined by 1% to 822,000 passenger cars and commercial vehicles (Q2 2018: 833,000). Revenue was €42.7 billion (Q2 2018: €40.8 billion), an increase of 5%. Also adjusted for positive exchange-rate changes, revenue was slightly higher than the prior-year level. The Daimler Group posted second-quarter EBIT of minus €1.6 (Q2 2018: plus €2.6) billion.
“Our second quarter results were mainly impacted by exceptional items of 4.2 billion euros. Therefore, our focus for the second half of this year is on improving our operating performance and cash-flow generation. In general, we are intensifying the Group-wide performance programs and reviewing our product portfolio in order to safeguard future success. At the same time, we are continuing consistently our company transformation,” said Ola Källenius, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars.
In the second quarter, earnings weakened to a net loss of €1.2 billion (Q2 2018: net profit of €1.8 billion). Net loss attributable to the shareholders of Daimler AG amounted to €1.3 billion (Q2 2018: net profit of €1.7 billion), leading to a decline in earnings per share to minus €1.24 (Q2 2018: plus €1.61).
In the first six months of 2019, the free cash flow of the industrial business was minus €3.3 billion (Q1-2 2018: plus €1.8 billion). The sharp decrease resulted in particular from higher working capital, as well as a continued high level of investment in future products.
At the Group, investments in property, plant and equipment increased to €3.4 billion (Q1-Q2 2018: €2.9 billion). Expenses for research and development also increased to €4.7 billion (Q1-Q2 2018: €4.6 billion). Compared with December 31, 2018, net liquidity of the industrial business decreased from €16.3 billion to €6.6 billion. The dividend payment of €3.5 billion (2018: €3.9 billion) to shareholders of Daimler AG as well as the negative free cash flow of the industrial business led to the decrease in net liquidity.
Mercedes-Benz Cars sold 575,639 vehicles in the second quarter, which is 3% fewer than in Q2 2018 (Q2 2018: 590,690). Mercedes-Benz Cars’ revenue decreased by 1% to €22.3 billion (Q2 2018: €22.6 billion) and its EBIT slipped to minus €672 million (Q2 2018: plus €1,901 million). Return on sales was minus 3.0% (Q2 2018: plus 8.4%).
Daimler Trucks showed an increase in unit sales of 2% to 126,474 vehicles in the second quarter (Q2 2018: 123,910). Revenue increased by 14% to €10.5 billion (Q2 2018: €9.2 billion). EBIT was up 33% to €725 million (Q2 2018: €546 million) and return on sales was 6.9% (Q2 2018: 5.9%).
Mercedes-Benz Vans’ unit sales were flat at 111,118 (Q2 2018: 110,883) vehicles. Revenue was 4% higher at €3.7 billion (Q2 2018: €3.5 billion). EBIT decreased to minus €2,050 million (Q2 2018: plus €152 million) while return on sales fell to minus 56.1% (Q2 2018: plus 4.3%).
Daimler Buses’ sales grew by 12% to 8,435 units in the second quarter (Q2 2018: 7,522). Revenue increased by 18% to €1.3 billion (Q2 2018: €1.1 billion). EBIT amounted to €106 million (Q2 2018: €66 million), an increase of 61%. Return on sales improved to 8.4% (Q2 2018: 6.1%).
At Daimler Financial Services, new business was almost flat at €18.4 billion in the second quarter (Q2 2018: €18.3 billion). Revenue was 9% higher at €7.1 billion (Q2 2018: €6.6 billion). The division’s EBIT amounted to €431 million (Q2 2018: €66 million), an increase of 553% compared to the prior year. At 12.5%, return on equity was above the figure of 2.1% in the prior-year period.