Annual Report 2016

Cash flows

Cash provided by operating activities (See B.24) amounted to €3.7 billion in 2016 (2015: €0.2 billion). The increase was primarily due to effects from the leasing and sales-financing business. In addition, a positive impact resulted from the development of working capital. Compared to the previous year, cash-effective contributions to pension funds were lower, as the prior-year period was influenced by cash outflows of €1.2 billion for extraordinary contributions in Germany and the United States. An opposing effect resulted from the payment of the fine of €1.0 billion imposed by the European Commission in the context of the settlement in the truck antitrust proceedings against Daimler AG. Furthermore, there were higher tax payments in 2016, as the prior-year period was influenced by tax refunds.

B.24 Condensed consolidated statement of cash flows

  2016 2015 16/15
In millions of euros     Change
       
Cash and cash equivalents at beginning of period   9,936 9,667 +269
Cash provided by operating activities 3,711 222 +3,489
Cash used for investing activities -14,666 -9,722 -4,944
Cash provided by financing activities 12,009 9,631 +2,378
Effect of exchange-rate changes on cash and cash equivalents -9 138 -147
Cash and cash equivalents at end of period   10,981 9,936 +1,045

Cash used for investing activities (See B.24) amounted to €14.7 billion (2015: €9.7 billion). The change compared with the prior-year period resulted primarily from cash outflows for investments in shareholdings. In the reporting period, the acquisition of 100 % of the shares of Athlon Car Lease International B.V. (Athlon) and the settlement of financing liabilities of Athlon led to cash outflows. The prior-year period was affected by the capital increases carried out at our associated companies and joint ventures and the acquisition of shares in the digital mapping business HERE. Cash used for investing activities also reflects increased investments in intangible assets and property, plant and equipment. Furthermore, negative effects resulted from acquisitions and disposals of securities in the context of liquidity management. Those transactions led to a higher net cash outflow than in the previous year.

Cash provided by financing activities (See B.24) amounted to €12.0 billion (2015: €9.6 billion). The increase was primarily due to the higher net cash inflows from financing liabilities in the context of refinancing the leasing and sales-financing business and the acquisition of the shares of Athlon. There was an opposing effect from the increased dividend payment to the shareholders of Daimler AG.

Cash and cash equivalents increased by €1.0 billion compared with December 31, 2015, after taking currency translation effects into account. Total liquidity, which also includes marketable debt securities, increased by €3.5 billion to €21.7 billion.

The parameter used by Daimler to measure the financial capability of the Group’s industrial business is the free cash flow of the industrial business (See B.25), which is derived from the reported cash flows from operating and investing activities. The cash flows from the acquisition and sale of marketable debt securities included in cash flows from investing activities are deducted, as those securities are allocated to liquidity and changes in them are thus not a part of the free cash flow.

Other adjustments relate to additions to property, plant and equipment that are allocated to the Group as their beneficial owner due to the form of their underlying lease contracts. Furthermore, adjustments are made for the effects of financing dealerships within the Group. In addition, the calculation of the free cash flow includes those cash flows to be shown under cash from financing activities in connection with the acquisition or sale of interests in subsidiaries without loss of control.

The free cash flow of the industrial business amounted to €3.9 billion in 2016 and was significantly higher than the dividend payment, and therefore in line with the expectations as stated in the Outlook section of Annual Report 2015.

The slight decrease in the free cash flow by 0.1 to €3.9 billion was primarily due to following factors. Positive effects resulted from the development of working capital. In addition, higher cash outflows for the acquisition of shares in the digital mapping business HERE influenced the free cash flow of the prior-year period. Extraordinary payments in the context of pension and health-care benefits in Germany and the United States also had an impact in the prior year. However, payment of the fine in the context of the settlement in the antitrust proceedings and higher investments in intangible assets and property, plant and equipment reduced the free cash flow.

B.25 Free cash flow of the industrial business

  2016 2015 16/15
In millions of euros     Change
       
Cash provided by operating activities   12,643 11,735 +908
Cash used for investing activities   -10,903 -9,936 -967
Change in marketable debt securities   2,311 1,897 +414
Other adjustments -177 264 -441
Free cash flow of the industrial business   3,874 3,960 -86

B.26 Net liquidity of the industrial business

  Dec. 31, 2016 Dec. 31, 2015 16/15
In millions of euros   Change
       
Cash and cash equivalents 8,751 8,369 +382
Marketable debt securities 9,498 6,999 +2,499
Liquidity 18,249 15,368 +2,881
Financing liabilities 1,451 2,612 -1,161
Market valuation and currency hedges for financing liabilities   37 600 -563
Financing liabilities (nominal)   1,488 3,212 -1,724
Net liquidity 19,737 18,580 +1,157

B.27 Net debt of the Daimler Group

  Dec. 31, 2016 Dec. 31, 2015 16/15
In millions of euros   Change
       
Cash and cash equivalents 10,981 9,936 +1,045
Marketable debt securities 10,748 8,273 +2,475
Liquidity 21,729 18,209 +3,520
Financing liabilities -117,686 -101,142 -16,544
Market valuation and currency hedges for financing liabilities   61 583 -522
Financing liabilities (nominal)   -117,625 -100,559 -17,066
Net debt -95,896 -82,350 -13,546

The net liquidity of the industrial business (See B.26) is calculated as the total amount as shown in the statement of financial position of cash, cash equivalents and the marketable debt securities included in liquidity management, less the currency-hedged nominal amounts of financing liabilities.

To the extent that the Group’s internal refinancing of the financial services business is provided by the companies of the industrial business, this amount is deducted in the calculation of the net debt of the industrial business. At December 31, 2016, the Group’s internal refinancing was of a higher volume than the financing liabilities originally taken on in the industrial business due to the application of the industrial business’s own financial resources. This resulted in a positive value for the financing liabilities of the industrial business, thus increasing net liquidity, so the net liquidity of the industrial business exceeds the gross liquidity presented here.

Compared with December 31, 2015, the net liquidity of the industrial business increased from €18.6 billion to €19.7 billion. The increase mainly reflects the positive free cash flow of €3.9 billion. In addition, cash inflows in connection with the equity transactions with Daimler Financial Services had a positive impact of €0.7 billion. An opposing effect of €3.5 billion resulted from the dividend payment to the shareholders of Daimler AG.

Net debt at Group level, which primarily results from refinancing the leasing and sales-financing business, increased compared with December 31, 2015 from €82.4 billion to €95.9 billion. (See B.27)

Zurück
Other financial commitments
Principles and objectives of financial management