In a challenging environment due to the COVID-19 pandemic, the Group’s total unit sales of passenger cars and commercial vehicles decreased by 15%, to 2.84 million (2019: 3.34 million). Revenue was €154.3 billion (2019: €172.7 billion), a reduction of 11%. Due to extensive cost and cash preservation measures and strong performances across all divisions, EBIT of the Daimler Group increased by 53% to €6.6 billion (2019: €4.3 billion). Adjusted EBIT, reflecting the underlying business, was €8.6 billion (2019: €10.3 billion). The figures are based on audited financial statements. The reporting structure and previous year’s figures have been adjusted to reflect the newly formed Group divisions.
"The year 2020 was a stress test for just about every company in almost every industry. The Daimler team mastered this test very well. Our products continue to be in great demand across all major markets and divisions. With rapid growth in our xEV sales and the introduction of new products and technologies, we have also taken important steps in terms of electrification and digitalization. Our financial results are significantly above market expectations reflecting substantial progress on cost-efficiencies. In addition, we have achieved a significant margin improvement based on strong product mix and pricing - especially in the second half of the year. We proved our ability to generate substantial cash flow and to drive the ongoing transformation on our own - even under the adverse circumstances of a pandemic."
Chairman of the Board of Management of Daimler AG and Mercedes-Benz AG
In 2020, net profit improved to €4.0 billion (2019: €2.7 billion). Net profit attributable to the shareholders of Daimler AG amounted to €3.6 billion (2019: €2.4 billion), leading to an increase in earnings per share to €3.39 (2019: €2.22). At the Annual General Meeting on March 31, 2021, the Board of Management and the Supervisory Board will propose a dividend of €1.35 per share (2019: €0.90). The total payout will therefore amount to €1.4 billion (2019: €1.0 billion).
“We are confident that we can maintain positive momentum if current market conditions prevail, accelerating our strategic plans and further enhancing our financial robustness. The intended separation of our industrial businesses is designed to unlock the full potential for Mercedes-Benz as the world’s pre-eminent luxury car business, committed to leading in electric drive and car software, and Daimler Truck as the world’s largest truck and bus producer and technology leader,” said Källenius.
Daimler plans to spin-off and list Daimler Truck. It is intended that a significant majority stake in Daimler Truck will be distributed to Daimler shareholders. Daimler Truck will have a fully independent management, stand-alone corporate governance including an independent Chairman of the Supervisory Board, and is targeted to qualify for listing on Germany’s blue-chip DAX index. The transaction and the listing of Daimler Truck on the Frankfurt stock exchange is expected to be completed before year-end 2021. In addition, it is also Daimler’s intention to rename itself as Mercedes-Benz at the appropriate time. All further details about the intended spin-off will be presented to shareholders at an extra-ordinary shareholder meeting in Q3 2021 in order to obtain their mandatory approval for the plan.
At Daimler Mobility, new business decreased by 9% to €67.8 billion (2019: €74.4 billion). Contract volume was €150.6 billion (end of 2019: €162.8 billion). Revenue was €27.7 billion (2019: €28.6 billion). The division’s EBIT amounted to €1,436 million (2019: €2,140 million). At 9.8%, return on equity was lower than the figure of 15.3% in the prior year. Adjusted EBIT was €1,595 million (2019: €1,827 million) and adjusted return on equity was 10.9% (2019: 13.1%).
Sales by the Mercedes-Benz Cars & Vans division decreased by 13% to 2,461,800 vehicles (2019: 2,823,800). Revenue was €98.6 billion (2019: €106.9 billion). EBIT amounted to €5,172 million (2019: minus €109 million) and return on sales was 5.2% (2019: minus 0.1%). Adjusted EBIT was €6,802 million (2019: €6,151 million) and adjusted return on sales was 6.9% (2019: 5.8%). Cash flow before interest and taxes (CFBIT) was €7,048 million (2019: €598 million). Adjusted CFBIT amounted to €7,917 million (2019: €1,939 million). The adjusted cash conversion rate (CCR) was 1.2 (2019: 0.3).
Sales by Mercedes-Benz Cars slipped by 13% to 2,087,200 vehicles (2019: 2,385,400). Mercedes-Benz Vans’ sales were down 15% to 374,600 (2019: 438,300). In 2020, the average CO2 emissions of the new car fleet in Europe (EU28 - European Union, United Kingdom, Norway and Iceland) are expected to reach 104 g/km (2019: 137 g/km NEFZ, including vans registered as passenger cars). With this, the 2020 CO2 targets in the European Union have been met.
Daimler Trucks & Buses division showed a decrease in unit sales of 27% to 378,500 vehicles (2019: 521,100). Revenue was €34.7 billion (2019: €44.4 billion). EBIT amounted to €525 million (2019: €2,672 million) and return on sales was 1.5% (2019: 6.0%). Adjusted EBIT was €678 million (2019: €2,672 million) and adjusted return on sales was 2.0% (2019: 6.0%). Cash flow before interest and taxes (CFBIT) was €2,513 million (2019: €2,654 million). Adjusted CFBIT came in at €2,513 million (2019: €2,654 million). The adjusted cash conversion rate (CCR) was 3.7 (2019: 1.0). Sales by Daimler Trucks fell by 27% to 358,300 vehicles (2019: 488,500). Daimler Buses sold 20,100 vehicles (2019: 32,600) – a decrease of 38%.
Outlook for Daimler and divisions
With the expected rise in availability of effective vaccines to combat the COVID-19 virus and in the absence of further unexpected pandemic-related setbacks, Daimler assumes that the global economy will recover strongly in 2021. Based on the expected market development and the current assessments of the divisions, Daimler anticipates Group sales, revenues and EBIT in 2021 to be significantly above the prior-year’s level. Although bottlenecks in the semiconductor industry will impact sales mainly in the first quarter it is currently anticipated that lost production volume can be compensated for by the end of the year.
The divisions expect the following adjusted returns in the year 2021:
Mercedes-Benz Cars & Vans: adjusted return on sales of 8 – 10%
Daimler Trucks & Buses: adjusted return on sales of 6 – 7%
Daimler Mobility: adjusted return on equity of 12 – 13%.
The business plan of Daimler covers the full year 2021 and is based on the existing Group structure, including Daimler Trucks & Buses. The spin-off of Daimler Truck, including significant parts of the related financial services business, will be examined before the end of 2021. Before the spin-off, Daimler will reclassify Daimler Truck as discontinued operations. The expected considerable positive effects in the second half of the year cannot be reliably determined at present.
The adjusted cash conversion rate (ratio of cash flow to EBIT) for the Mercedes-Benz Cars & Vans division in 2021 is expected to be between 0.7 and 0.9 and for Daimler Trucks & Buses between 0.8 and 1.0. After exceptionally strong free cash flow in 2020 triggered by various successful measures to reduce costs and safeguard liquidity in the wake of the COVID-19 pandemic, Daimler for 2021 anticipates a healthy free cash flow of the industrial business on a normalized level. CFBIT adjusted from the industrial divisions is expected to be on the prior-year-level. However, free cash flow adjusted includes higher tax payments and therefore will be below last year's figure. Additionally, the reported free cash flow includes the payments agreed in September 2020 in the context of the settlement with the US regulators in civil law proceedings relating to diesel emissions. Therefore, Daimler expects reported free cash flow to be significantly below 2020's figure.
In 2021, Mercedes-Benz Cars will push the xEV strategy forward and introduce four all-new EV models with the EQS, EQA, EQB and EQE as well as increase the proportion of PHEVs. Therefore, the division expects European passenger car CO2 emissions to be significantly below previous year’s number.