Annual Report 2016

Value added

As described in the Performance measurement system section of the Corporate Profile chapter in chart B.03, the cost of capital is the result of net assets and cost of capital expressed as a percentage, which is subtracted from earnings in order to calculate value added. The tables B.21 and B.22 show value added and net assets for the Group and for the individual divisions. Table B.23 shows how net assets are derived from the consolidated statement of financial position. In the context of fine tuning our performance measurement system, the definition of the net assets was adjusted in the year 2016 with retrospective effect as of 2015, and no longer includes hedging instruments, which are recognized in other comprehensive income until maturity. As a result of the adjustment, the amount of net assets in 2015 has been increased by €2.4 billion.

The Group’s value added amounted to €5.2 billion in 2016 (2015: €5.4 billion), representing a return on net assets of 19.1 % (2015: 20.1 %). This was once again substantially higher than the minimum required rate of return of 8 %. The slight decrease in value added was caused by the growth of average net assets mainly as a result of higher investment in fixed assets and higher inventory levels. The net operating profit remained at the previous year’s level and was unable to offset the rise in cost of capital.

B.21 Value added

  2016 2015 16/15
In millions of euros   % change
       
Daimler Group1 5,243 5,423 -3
       
Mercedes-Benz Cars1 5,431 5,552 -2
Daimler Trucks1 935 1,595 -41
Mercedes-Benz Vans1 962 678 +42
Daimler Buses1 143 105 +36
Daimler Financial Services 439 467 -6

1 Prior-year figures adjusted due to fine tuning the definition of net assets.

B.22 Net assets (average)

  2016 2015 16/15
In millions of euros     % change
       
Mercedes-Benz Cars1 22,345 19,788 +13
Daimler Trucks1 8,448 8,176 +3
Mercedes-Benz Vans1 1,739 1,686 +3
Daimler Buses1 887 906 -2
Daimler Financial Services2 10,000 8,859 +13
Net assets of the divisions 43,419 39,415 +10
Equity method investments3 555 770 -28
Assets and liabilities from income taxes4   3,372 3,772 -11
Other reconciliation4 -292 839 -135
       
Daimler Group1 47,054 44,796 +5

1 Prior-year figures adjusted due to fine tuning the definition of net assets.

2 Total equity.

3 To the extent not allocated to the segments.

4 Industrial business.

B.23 Net assets of the Daimler Group at year-end

  2016 2015 16/15
In millions of euros     % change
       
Net assets of the industrial business      
Intangible assets 11,145 9,789 +14
Property, plant and equipment   26,314 24,262 +8
Leased assets 17,433 15,864 +10
Inventories 24,426 22,862 +7
Trade receivables 8,977 8,215 +9
Less provisions for other risks   -15,325 -15,198 +1
Less trade payables -10,853 -10,182 +7
Less other assets and liabilities1   -26,727 -21,956 +22
Assets and liabilities from income taxes   2,935 3,055 -4
Total equity of Daimler Financial Services   10,448 9,872 +6
       
Net Assets1 48,773 46,583 +5

1 Prior-year figures adjusted due to fine tuning the definition of net assets.

Value added at Mercedes-Benz Cars decreased slightly by €0.1 billion to €5.4 billion. This was mainly the result of the growth of average net assets to €22.3 billion, reflecting higher investment in fixed assets and higher inventory levels. EBIT increased slightly compared to the previous year’s level. This development was driven by positive effects from higher sales of new vehicles and better pricing, with negative effects from expenses from advance expenditure for new technologies and vehicles, and expenses in connection with Takata airbags.

As a result of the EBIT development, Daimler Trucks’ value added amounted to €0.9 billion, which is significantly below the high level of value added of the previous year (2015: €1.6 billion). This development was primarily the result of strong decreases in unit sales in the NAFTA region, Turkey, the Middle East, Latin America and Indonesia. Earnings were also reduced by the intense competition in Europe. In addition, the increase in average net assets as a result of higher investment in property, plant and equipment and higher inventories boosted the negative effect on value added.

Mercedes-Benz Vans’ value added increased significantly by €0.3 billion to €1.0 billion. This was the result of the substantial improvement in EBIT, reflecting the very positive development of unit sales in Europe, the NAFTA region and China, as well as further efficiency improvements. Negative effects on earnings mainly came from higher expenses from advance expenditure for new technologies and vehicles and from expenses in connection with Takata Airbags. Average net assets were slightly higher than in the previous year.

The value added of the Daimler Buses division was substantially higher than in the previous year, reaching €143 million (2015: €105 million). This was primarily due to the development of EBIT. Positive effects mainly resulting from the good business with complete buses, a favorable product mix and positive exchange-rate effects more than offset the negative impact from weak demand for bus chassis in Latin America, lower unit sales in Turkey and higher expenses from advance expenditure for new technologies and vehicles. Average net assets remained nearly constant compared to the previous year.

Daimler Financial Services’ value added of €0.4 billion was slightly under the level of 2015. The division’s return on equity amounted to 17.4 % (2015: 18.3 %). The development of value added primarily reflects the increase in average equity of €1.1 billion. Offsetting effects came from the positive development of EBIT as a result of further growth in contract volume despite negative exchange-rate effects.

Zurück
Liquidity and Capital Resources
Net operating profit