Daimler Annual Press Conference 2019: The ABC of the APC

ROS, EBIT, CASE — the Annual Press Conference is one of the most important, and also one of the more complex events that take place at Daimler. But in my role as a Social Media Manager I nonetheless have to maintain an overview, in spite of all the acronyms and figures.

So far, I’ve seldom attended the Annual Press Conferences, or APCs for short — but in the run-up to this year’s APC I’ve done a great deal of research about them, and now I’m going to share my new knowledge and experiences with you. Here we go!

For Daimler AG, the APC is an important public relations tool. At the APC, the company takes stock of the financial year that has just ended and makes a forecast about the year ahead. All of this information is presented by means of many key financial indicators. To make things a bit more concrete, the press release (PR) that is distributed to the media representatives at the APC can be a full ten pages long. It contains a wealth of facts and figures.

Martin Daum, Board of Management member responsible for Daimler Trucks and Buses, Chief Financial Officer Bodo Uebber (CFO) and Chairman of the Board of Management, Dieter Zetsche (CEO) in front of journalists at the Annual Press Conference Daimler AG 2019. On the right Joerg Howe, Head of Global Communications (l. to r.)

Martin Daum, Board of Management member responsible for Daimler Trucks and Buses, Chief Financial Officer Bodo Uebber (CFO) and Chairman of the Board of Management, Dieter Zetsche (CEO) in front of journalists at the Annual Press Conference of the Daimler AG 2019 (l.t.r.). On the right Joerg Howe, Head of Global Communications

In order to present and explain all of them, the Board of Management of Daimler AG holds its APC once a year in the Carl Benz Arena in Stuttgart. The Chairman of the Board of Management, Dieter Zetsche (CEO), and Chief Financial Officer Bodo Uebber (CFO) make individual statements, which are then followed by a Q&A session. During this traditional question-and-answer session, Dieter Zetsche, Bodo Uebber, and Martin Daum, who is the Board of Management member responsible for Daimler Trucks and Buses, have to explain some things, for example why the EBIT for 2018 was lower than the one for the previous year. There are reasons for that — but what is EBIT anyhow, and why is it so important?

EBIT, the company’s most important key figure

EBIT means “earnings before interest and taxes”. This key figure is a measure of how successfully a company’s operational business has developed, and it makes it possible to compare this success with that of other international companies. That’s because companies such as Tesla and Toyota are engaged in comparable business activities, but they are located in countries that have different tax structures. Thanks to EBIT, Daimler’s business success can nonetheless be compared with theirs. This morning, Daimler AG announced EBIT of €11.1 billion.

That’s significantly less than the EBIT for last year (€14.3 billion). Dieter Zetsche and Bodo Uebber explained that this was due to the difficult overall political and economic conditions. Among other things, they cited the challenges related to diesel engines and the ongoing discussion about them, the new emissions and fuel consumption test process WLTP — which stands for “Worldwide Harmonized Light-Duty Vehicles Test Procedure” —  and the global trade dispute.

Another important key figure is the ROS, or Return on Sales, which refers to the profit margin Daimler achieves through the sales of its vehicles. In other words, the Return on Sales stands for profitability. Last year, this figure decreased for Mercedes-Benz Cars and for our Vans and Buses divisions, whereas it increased for Trucks.

All of our shareholders will probably be mainly interested in the dividend. The dividend is the share of our company’s profits that goes to our shareholders. The Annual Shareholders’ Meeting decides how high the annual payout of the dividend will be, on the basis of a recommendation made by the Board of Management and the Supervisory Board. The recommended payout for the financial year 2018 is €3.25 per share. Because of the decrease in the business result, it was somewhat less than last year’s payout.

Sales and revenue

Our sales continued to increase in 2018. In other words, we sold more units (cars, vans, trucks, and buses) in 2018 than in 2017.

Our sales figure is the number of vehicles we have sold. In financial year 2018, we once again increased our unit sales, selling approximately 3.4 million cars and commercial vehicles all over the world. This once again made Mercedes-Benz the best-selling brand in the premium category. And that had a positive effect on overall revenue because, as a rule, greater sales also mean greater revenue.

In 2018 our revenue was 2% higher than the year before — totaling €167.4 billion. By way of comparison, that’s almost as much as the gross domestic product of New Zealand, which was the equivalent of around €179 billion in 2017.  P.S.: Incidentally, “revenue” refers to the total value of the vehicles and services we’ve sold. In other words, it’s the total value of our sales.

And let’s not forget the mobility services such as car2go, mytaxi, and so on, which Daimler continued to expand last year. Our mobility services already have more than 31 million registered users.

In spite of all the challenges, 2018 was a good year for Daimler AG — especially in view of the fact that the automotive sector is undergoing major changes. In order to deal with these changes, we have defined our 5C strategy .

CORE – CASE – CULTURE – COMPANY – CUSTOMER

CORE stands for our core business — in other words, the five areas of business in which Daimler currently operates: cars, trucks, vans, buses, and financial services.

CASE A look at the stage during the APC will show you that the kind of mobility we know today will probably change very soon. The Mercedes-Benz EQC (combined electric energy consumption: 20.8 – 19.7 kWh/100 km; combined CO2 emissions: 0 g/km)* is the first all-electric Mercedes, and that covers the letter E (Electric) in CASE. The Vision URBANETIC, our concept study for fully autonomous driving in urban traffic, symbolizes the other letters in our future CASE strategy.

The C stands for Connectivity — in other words, the connection to the customer via apps, websites or directly inside the vehicle. Here’s a cool example: our voice control MBUX (Mercedes Benz User Experience), which can respond to the user’s voice commands by changing the music or regulating the temperature, for example.

 

The A stands for Autonomous — in other words, autonomous driving. And the S stands for Shared & Services — all the “mobility services” I previously mentioned.

Thanks to initiatives such as Leadership 2020, we can also report some news regarding the third C, CULTURE, in the area of our corporate culture.

This year, another one of the Cs is being highlighted. It stands for our new corporate structure: COMPANY. If the Annual Shareholders’ Meeting in May votes its approval, in the future there will be three legally independent units under the overarching roof of Daimler AG: Mercedes-Benz AG (the car and van business), Daimler Truck AG (the truck and bus business) and Daimler Financial Services AG, which will be renamed Daimler Mobility AG in the future (mobility services). The launch of the new structure is planned for November 2019.

“Project Future” is about transforming our business units into three legally independent entities, all under the Daimler umbrella

Our goal is to gain more flexibility for Daimler in the new world of mobility so that we can react quickly to changes, seize new opportunities for growth, and continue to be successful. With the new structure, Daimler aims to give its divisions greater entrepreneurial freedom, to become even more market and customer-focused, and to make it possible to enter into partnerships more quickly and easily.

But why do we need these changes? That brings us once again to the challenging environment in which we operate. With the new structure, Daimler aims to give its divisions greater entrepreneurial freedom, to become even more market and customer-focused, and to make it possible to enter into partnerships more easily and quickly.

The focal point of each of these new structural components is our fifth and most important C: the CUSTOMER.

Drawing a balance

Note that I’m using this term in two senses. In this case, I’m referring to my personal balance regarding my first Daimler APC. I’ve already experienced quite a few press conferences, but seldom one that focused on such an important theme. I always find it fascinating to hear how much revenue we earn, and it’s especially fascinating to know how many key figures — as well as the corresponding acronyms — are important for journalists, investors, and analysts.


*Electric energy consumption and range have been determined on the basis of Regulation (EC) No. 692/2008. Electric energy consumption and range depend on the vehicle configuration.

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This article was written by Yannick Grauer, who is in charge of the Twitter account of Daimler AG. When he posts messages longer than 280 characters, they are usually about exciting podcasts and his passion for the VfB Stuttgart soccer club.