Daimler and the Capital Market
There was a generally positive tendency on global stock markets in 2016, although they remained volatile. Announcements by central banks around the world continued to have a pronounced influence on investor behavior. Despite a very attractive dividend yield, Daimler’s share price declined by 9 % over the year 2016, although it did recover in the second half of the year with a significant gain of 32 %. The Board of Management and the Supervisory Board will propose to the Annual Shareholders’ Meeting that a dividend of €3.25 (2015: €3.25) per share be paid for 2016.
Generally positive tendency on global stock markets
Global stock markets began the year 2016 with substantial losses, recording the worst start of a year in decades in the period until mid-February. Investors were initially concerned about the economic situation in China and, for the first time, in the United States as well. The ongoing decline in raw material prices added to this uncertainty. However, share prices then rose for a period, with this positive development largely due to the expansionary monetary policy of the European Central Bank (ECB) and indications by the US Federal Reserve that a course of rather moderate interest rate increases would be pursued in the United States. In the months that followed, reserved financial reports from European companies and discussions in the run-up to the Brexit referendum in the United Kingdom put a damper on investors’ willingness to take risks. Share prices fell sharply in June after the British vote to leave the European Union. However, markets quickly recovered after that and even went on to post substantial gains. Automotive stocks, which had come under pressure during the course of the year, were able to rally and post significant gains once again. Nevertheless, expectations regarding the future behavior of central banks worldwide remained very much on investors’ minds. After a phase of varied development, the looming election in the United States in November began influencing the performance of global stock markets. More specifically, market fluctuations and volatility increased significantly, and automotive stocks were also affected by this development. The result of the US election led to a brief period of uncertainty, after which the major markets in the United States, Europe and Japan began recording gains once again. The ECB’s announcement that it would continue its government-bond purchasing program until the end of 2017 led to additional market gains in December.
The index of the most important shares in the euro zone, the Dow Jones Euro STOXX 50, rose by 1 % in 2016. With a rise of 7 %, the DAX, Germany’s leading index, performed significantly better. In Japan, the Nikkei index closed with a slight increase over the full year, while in the United States the Dow Jones reached an all-time high of 19,975 in December and recorded a 13 % increase for 2016 as a whole. (See table A.01)
A.01 Development of Daimler’s share price and of major indices
|End of 2016||End of 2015||16/15|
|Daimler share price (in euros)||70.72||77.58||-9|
|Dow Jones Euro STOXX 50||3,291||3,268||+1|
|Dow Jones Industrial Average||19,763||17,425||+13|
|Dow Jones STOXX Auto Index||543||566||-4|
Daimler share price down by 9 % over the year
On January 4, 2016, the Daimler share price reached €73.64, which was its peak for the year. The year 2016 began with declining share prices on global markets. Daimler shares were also affected by this development. However, the ongoing product offensive and our relatively good sales development compared to our competitors led our share price to increase once again in February and March. The development of our share price was also positively impacted by the Daimler’s announcement that it would significantly increase the dividend to the new record of €3.25 per share. Political and economic uncertainties in the period that followed led to renewed high volatility on the stock markets. The unfavorable outlook in key truck markets, particularly in the NAFTA region and the Middle East, had a negative effect on expectations regarding our business operations in the truck segment. The result of the Brexit referendum in the UK at the end of June took investors by surprise and led to a dramatic short-term decline in share prices worldwide. In this situation, the Daimler share price dropped to its lowest point of the year 2016 when it fell to €51.97 on July 6. During the prolonged phase of recovery that followed, automotive stocks, which had come under strong pressure throughout the course of the year, were able to rally and post significant gains once again. Sales at Mercedes-Benz Cars developed very favorably as a result of high demand for our new products, which had a positive effect on the development of our share price. During the China Capital Market Day event at the beginning of September, management provided a description of the strategy at Mercedes-Benz Cars. This strategy had already been underpinned by the solid development of business in China and was therefore very positively assessed by analysts and investors. With regard to commercial vehicles, investors kept a close eye on key markets, especially in the NAFTA region and Europe, throughout the rest of the year. In the fourth quarter, our share price climbed again and developed significantly better than the DAX. Daimler shares closed at €70.72 on December 30. At the end of the year, the company had a market capitalization of €75.7 billion (2015: €83.0 billion). Daimler’s share price declined by 9 % over the year as a whole, underperforming the DAX (+7 %) and the Dow Jones STOXX Auto Index (-4 %). When the dividend payout of €3.25 per share is included, our shareholders saw the value of their investment decrease by 5 %.
Dividend of €3.25
(See table A.02) We paid the highest dividend in the company’s history in 2016 (€3.25 per share). This corresponds to a total dividend payout of €3,477 million, which was the highest dividend payout of any DAX-listed company. The Board of Management and the Supervisory Board will recommend the payment of a stable dividend of €3.25 per share for 2016 at the Annual Shareholders’ Meeting on March 29, 2017. The total dividend will amount to €3,477 million.
A.02 Key figures per share
|Amounts in euros||% change|
|Equity (December 31)||54.17||50.06||+8|
|Xetra price at year end1||70.72||77.58||-9|
1 Closing prices
A broad shareholder structure
(See graphic A.07) Daimler continues to have a broad shareholder base of approximately one million shareholders. Shareholder numbers increased during the reporting year, particularly as a larger number of private investors purchased our shares. The Kuwait Investment Authority (KIA) currently owns 6.8 % of the company’s shares, making it Daimler AG’s largest single shareholder. The Renault-Nissan Alliance continues to hold 3.1 % of Daimler’s shares. BlackRock Inc., New York, still holds a stake above the 5 % reporting limit as defined by Germany’s Securities Trading Act (WpHG). In May 2016, BlackRock notified us that its proportion of the voting rights was 5.18 % as of May 11, 2016.
The aforementioned and all other voting-rights notifications are published on the Internet at daimler.com/investors/share/voting-rights.
A.06 Stock-exchange data for Daimler shares
|German Securities Identification Number||710000|
|Reuters ticker symbol||DAIGn.DE|
|Bloomberg ticker symbol||DAI:GR|
Institutional investors hold a total of 71 % of our equity capital, while private investors own 20 %. Approximately 66 % of our capital is in the hands of European investors and around 24 % is held by US investors. (See graphic A.08) Daimler shares’ weighting in major indices declined during the course of the year as a result of the development of the overall share price. With a weighting of 7.52 % (2015: 8.67 %), Daimler was ranked sixth in the German DAX 30 index at the end of 2016. (See table A.05) In the Dow Jones Euro STOXX 50 index, our shares had a weighting of 3.18 % (2015: 3.63 %), which put them in tenth place. Daimler shares are listed on the stock exchanges in Frankfurt and Stuttgart. A total volume of 1,210 million shares were traded in Germany in 2016 (2015: 1,188 million). Daimler shares are also increasingly being traded on multilateral trading platforms and in the over-the-counter market.
A.05 Key figures for Daimler shares
End of 2016
|End of 2015||16/15|
|Share capital (in millions of euros)||3,070||3,070||0|
|Number of shares (in millions)||1,069.8||1,069.8||0|
(in billions of euros)
|Number of shareholders (in millions)||1.0||0.9||+11|
|Weighting in share indices|
|DAX 30||7.52 %||8.67 %|
|Dow Jones Euro STOXX 50||3.18 %||3.63 %|
|Long-term credit ratings|
|Standard & Poor’s||A||A-|
|DBRS||A (low)||A (low)|
Employee share purchase plan implemented once again
Staff members entitled to purchase employee shares were able to do so once again in March 2016. As was the case in the previous year, the employees received a discount as well as bonus shares. At 19.8 %, the participation rate in the year under review was significantly higher than in 2015 (11.7 %). A total of 34,500 employees took part in the program (2015: 20,400); this is the highest number since 2008. The total number of shares purchased by employees also increased substantially, from 300,000 in 2015 to approximately 576,000 (of which just under 52,000 were bonus shares) in the year under review. The high participation rate for the employee share purchase plan was probably due to a significantly lower share price compared to the prior year, a high profit-sharing payout and the substantially higher dividend of €3.25 per share.
Annual Shareholders’ Meeting in the CityCube in Berlin
Our Annual Shareholders’ Meeting, which took place on April 6, 2016, was held for the second time in the CityCube in Berlin. Some 5,500 shareholders (2015: 5,000) attended the meeting. A total of 50.77 % of the equity capital (2015: 36.15 %) was represented at the meeting (actual attendees and shareholders who voted by absentee ballot). This positive increase is a reflection of our successful efforts to encourage more investors to exercise their voting rights. A large majority of the shareholders approved each of the agenda points proposed by the company’s management. For example, the Annual Shareholders’ Meeting approved the highest dividend in the company’s history (€3.25 per share; 2015: €2.45) and re-elected Dr. Manfred Bischoff, Chairman of the Supervisory Board of Daimler AG, to the Daimler Supervisory Board as a member as a representing the shareholders. In addition, Petraea Heynike, a former member of the Executive Board of Nestlé S. A., was re-elected to the Daimler AG Supervisory Board. Important documents and information related to the Annual Shareholders’ Meeting can be found on our website at daimler.com/investors/events/annual-meetings. In the exhibition areas of the CityCube, Daimler presented its technological expertise and broad range of products and services under the motto “Innovative. Digital. Leading.” The presentation highlights included the Concept Intelligent Aerodynamic Automobile (Concept IAA) 2015, which attracted a lot of admiring looks. This aerodynamic world champion was developed and built almost entirely digitally in just ten months. A group of our trainees, as well as the global Laureus Sport for Good movement established by Daimler and Richemont 16 years ago, were also on hand to provide an insight into their work, and with “Mercedes me,” the Mercedes-Benz brand presented services in addition to its products.
Continuation of comprehensive investor relations activities
In 2016, we once again provided institutional investors, analysts, rating agencies and private investors with timely information regarding the company’s business development. We organized road shows for institutional investors and analysts in the finance capitals of Europe, North America, Asia and Australia. We also held many one-on-one meetings at investor conferences. This was especially the case at the international motor shows in Geneva and Paris. Sustainability-focused investors were also able to meet and talk with company representatives at an event held at the Paris Motor Show and at a conference in Paris in November. We reported on our quarterly results in conference calls and webcasts. The presentations can be viewed on our website at daimler.com/investors/events/presentations. The talks with analysts and investors focused on the latest earnings expectations for 2016, as well as on the business development and profitability of the individual divisions and regions. In addition, top executives from Daimler Trucks discussed the strategies and goals of their division during a capital market event held in June in Leinfelden (near Stuttgart), where they also offered participants the opportunity to go for a ride in a partially automated truck. Numerous analysts and investors accepted our invitation to join us for another capital market day in Beijing in September. During this event, the local top-management team described its strategies and activities in the crucial growth market in China, and also explained why we are so optimistic that Daimler will continue to expand its business in the Chinese market. The audio recordings and charts and illustrations from the events are available at daimler.com/investors/events/capital-market-days.
Awards once again for the print and online versions of the Annual Report
Our Annual Report won prestigious international awards once again in the year under review. Both the print version and the online version with numerous additional features took
Platinum in the LACP 2015 Vision Awards competition (ar2015.daimler.com). Our Annual Report was also named the best printed annual report worldwide from among the top 100 international submissions to the LACP.
Significantly more use of corporate website after modernization
In November 2015, the broad range of information offered on our website at the existing address daimler.com was transferred to a more powerful software platform and given a new design. We have also gradually made additional improvements since that time. Among other things, our website adapts to any device and is thus always displayed in an optimal size and format. Our modernization measures have increased the attractiveness of our website and significantly enhanced the user experience. As a result, the numbers of visits to our website and the session durations there have both risen considerably.
Number of online shareholders remains at a high level
Our shareholders continue to make good use of our range of personalized electronic information and communication. A total of 86,500 shareholders received the invitation and agenda for the Annual Shareholders’ Meeting by e-mail rather than by post in 2016 (2015: 84,000). We would like to thank those shareholders for helping to protect the environment and cut costs. As was the case in the past, those shareholders once again had the opportunity to win attractive prizes in a lottery. Access to the e-service for shareholders and additional information can be found at https://register.daimler.com.
Refinancing benefits from high level of capital-market liquidity and good ratings
The ongoing expansionary monetary policies at central banks also impacted bond markets during the year under review. As a result of the high level of liquidity, companies with investment-grade ratings saw their risk premiums remain at a moderate level.
In 2016, Daimler primarily covered its refinancing needs by issuing bonds. A large proportion of those bonds were in the form of benchmark bond issuances (bonds with high nominal volumes) in euro and US-dollar markets. In the US capital market, for example, Daimler Finance North America LLC issued bonds worth a total of $5.5 billion in July and October 2016. Those bonds had terms of three and five years. In addition, Daimler AG issued euro bonds in benchmark format with a total volume of €10.0 billion and terms of two, three, four, five, seven, eight, ten and 12 years. Daimler AG also issued two bonds in China (so-called Panda bonds), with a total volume of CNY 8.0 billion. Furthermore, many smaller bonds were issued by the Daimler Group in a variety of currencies and markets.
At the end of 2016, companies of the Daimler Group had issued bonds that were still outstanding in a volume of €63.1 billion (2015: €51.4 billion). Besides raising funds through the issuance of bonds, Daimler also issued a small volume of commercial paper in 2016.
Daimler also conducted several asset-backed security (ABS) transactions in the United States, Canada, Germany and China during the reporting year. In the United States, for example, the company generated a refinancing volume of US$6.6 billion through six issuances. A further C$0.5 billion was placed in Canada. In addition, Mercedes-Benz Bank used the Silver Arrow Platform to sell €1.0 billion in ABS bonds to European investors once again. Two ABS transactions were also successfully conducted in China for the first time, with a total volume of CNY 6.4 billion. (See Management Report)