Daimler adjusts its earnings guidance -- preliminary results for the third quarter 2018
STUTTGART, Germany, Oct. 19, 2018 /PRNewswire/ -- As a result of current developments, Daimler AG today reassessed its earnings outlook for the year 2018 for the Mercedes-Benz Cars and Daimler Buses divisions and for the Daimler Group. This reassessment is based on a number of factors:
The main factor is an increase in expected expenses in connection with ongoing governmental proceedings and measures in various regions with regard to Mercedes-Benz diesel vehicles.
In addition, Mercedes-Benz Vans records lower unit sales due to delays in vehicle deliveries.
Furthermore, against the backdrop of a recent ruling by the European Court of Justice, provisions have been recognized for the potential need to take action on certain vehicles still operating with the previously used refrigerant R134a.
Additionally, Daimler Buses records decreasing demand in some markets.
The aforementioned factors have been taken into account in the results of operations for the third quarter. As a result, earnings are now significantly below market expectations:
Group EBIT amounts to €2,488 million (Q3 2017: €3,409 million).
EBIT for the divisions amount to:
Mercedes-Benz Cars: €1,372 million (Q3 2017: €2,105 million)
Daimler Trucks: €850 million (Q3 2017: €614 million)
Mercedes-Benz Vans: minus €93 million (Q3 2017: €214 million)
Daimler Buses: €30 million (Q3 2017: €32 million)
Daimler Financial Services: €392 million (Q3 2017: €508 million)
Reconciliation: minus €63 million (Q3 2017: minus €64 million)
Free cash flow of the industrial business for the period of January through September 2018 amounts to minus €60 million (Q3 2017: plus €5,771 million)
All the stated figures are provisional and unaudited.
As a result, Daimler now has the following expectations for EBIT in the year 2018:
Mercedes-Benz Cars: significantly below the prior-year level
Daimler Trucks: significantly above the prior-year level (unchanged)
Mercedes-Benz Vans: significantly below the prior-year level (unchanged)
Daimler Buses: significantly below the prior-year level
Daimler Financial Services: in the prior year magnitude (unchanged) and
Daimler Group: significantly below the prior-year level
The expectation for the free cash flow of the industrial business for business year 2018 remains unchanged.
EBIT (earnings before interest and taxes) is the measure of operating profit at Daimler.
This document contains forward-looking statements that reflect our current views about future events. The words "anticipate," "assume," "believe," "estimate," "expect," "intend," "may," "can," "could," "plan," "project," "should" and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a decline of demand in our most important markets; a deterioration of our refinancing possibilities on the credit and financial markets; events of force majeure including natural disasters, acts of terrorism, political unrest, armed conflicts, industrial accidents and their effects on our sales, purchasing, production or financial services activities; changes in currency exchange rates and tariff regulations; a shift in consumer preferences towards smaller, lower-margin vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilize our production capacities; price increases for fuel or raw materials; disruption of production due to shortages of materials, labor strikes or supplier insolvencies; a decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization measures; the business outlook for companies in which we hold a significant equity interest; the successful implementation of strategic cooperations and joint ventures; changes in laws, regulations and government policies, particularly those relating to vehicle emissions, fuel economy and safety; the resolution of pending government investigations or of investigations requested by governments and the conclusion of pending or threatened future legal proceedings; and other risks and uncertainties, some of which we describe under the heading "Risk and Opportunity Report" in the current Annual Report.
If any of these risks and uncertainties materializes or if the assumptions underlying any of our forward-looking statements prove to be incorrect, the actual results may be materially different from those we express or imply by such statements. We do not intend or assume any obligation to update these forward-looking statements since they are based solely on the circumstances at the date of publication.
Daimler at a Glance
Daimler AG is one of the world's most successful automotive companies. With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services, the Daimler Group is one of the biggest producers of premium cars and the world's biggest manufacturer of commercial vehicles with a global reach. Daimler Financial Services provides financing, leasing, fleet management, insurance, financial investments, credit cards, and innovative mobility services. The company's founders, Gottlieb Daimler and Carl Benz, made history with the invention of the automobile in the year 1886. As a pioneer of automotive engineering, it is a motivation and commitment of Daimler to shape safely and sustainably the future of mobility: The Group's focus is on innovative and green technologies as well as on safe and superior automobiles that appeal and fascinate. Daimler consequently invests in the development of efficient drive trains with the long-term goal of locally emission-free driving: from hightech combustion engines about hybrid vehicles to electric drive trains powered by battery or fuel cell. Furthermore, the company follows a consistent path towards intelligent connectivity of its vehicles, autonomous driving and new mobility concepts. This is just one example of how Daimler willingly accepts the challenge of meeting its responsibility towards society and the environment. Daimler sells its vehicles and services in nearly all the countries of the world and has production facilities in Europe, North and South America, Asia, and Africa. Its current brand portfolio includes, in addition to the world's most valuable premium automotive brand, Mercedes-Benz (Source: Interbrand-Study, 10/4/2018), as well as Mercedes-AMG, Mercedes-Maybach and Mercedes me, the brands smart, EQ, Freightliner, Western Star, BharatBenz, FUSO, Setra and Thomas Built Buses, and Daimler Financial Services' brands: Mercedes-Benz Bank, Mercedes-Benz Financial Services, Daimler Truck Financial, moovel, car2go and mytaxi.
The company is listed on the stock exchanges of Frankfurt and Stuttgart (stock exchange symbol DAI). In 2017, the Group sold around 3.3 million vehicles and employed a workforce of more than 289,300 people. With application of IFRS 15 and IFRS 9 in financial year 2017, Group revenue would have amounted to €164.2 billion and Group EBIT would have amounted to €14.3 billion. Before application of IFRS 15 and 9, Group revenue in 2017 amounted to €164.3 billion and Group EBIT amounted to €14.7 billion, as previously reported.
SOURCE Daimler North America - Corporate Communications
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