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Daimler-Benz Group
*) For purposes of comparison, figures were adjusted to take account of significant changes in consolidation at AEG Daimler-Benz Industrie and Daimler-Benz Aerospace.
DM amounts in millions Jan.-Sept. 95 Jan.-Sept. 94 *) Revenues 72,482 70,712 EU market 43,256 40,882 Germany 26,638 25,709 EU excluding Germany 16,618 15,173 U.S.A. 12,662 13,166 Other markets 16,564 16,664 Employees (9/30) 329,069 327,120 Germany 249,694 249,028 Foreign 79,375 78,092
- Group Revenues up 3%
- Expansion of Business Especially in Europe
- Strong Growth in Commercial Vehicles
- Currency Weakness Affect Business Development
Revenues of the Daimler-Benz Group, at DM 72.5 billion, were up 3% in the first nine months of 1995. The increase was reported both in Germany (+4%) and abroad (+2%). The predominant cause of the growth in Germany to DM 26.6 billion was the positive development in commercial vehicles and at debis. In the U.S.A., we had to account a 4% decline in business volume, primarily caused by currency-related losses in passenger cars and aircraft. In contrast, revenues in the member countries of the EU, at DM 16.6 billion, were up 10%. The expansion was carried by all corporate units, but particularly by the commercial vehicles division. Mercedes-Benz produced more than two-thirds of group revenues, AEG Daimler-Benz Industrie generated 9%, DASA 12% and debis 10%.
At the end of September 1995, the Daimler-Benz Group had 329,100 employees worldwide. DASA and AEG Daimler-Benz Industrie continued their workforce reductions according to plan. As a result of the positive business trend as well as of the integration of Kässbohrer within EvoBus GmbH, the number of employees at Mercedes-Benz and debis is up compared with the number of employees on September 30, 1994.
Mercedes-Benz
DM amounts in millions Jan.-Sept. 95 Jan.-Sept. 94 Revenues 52,587 51,211 Empolyees (9/30) 202,8682 199,966 Passenger Cars Revenues 29,312 30,689 Production (units) 438,372 442,707 Sales (units) 422,455 436,071 Commercial vehicles Revenues 23,275 20,522 Production (units) 249,020 212,482 Sales (units) 235,640 206,131
The general economic situation in the worldwide automotive industry continued to be uneven. In passenger cars, the positive trend in some markets was nearly compensated by the ongoing weaknesses in other important countries. Germany and Japan showed slight increases in new registrations. On the other hand, passenger car sales in the U.S.A. were down again after a brief improvement. There was an extremely lively demand for commercial vehicles both in Europe as well as in overseas countries.
At Mercedes-Benz, the positive trend also continued during the third quarter of 1995. On the whole, at DM 52.6 billion, revenues were up 3% in the first nine months. Considerable growth was achieved primarily in Western Europe excluding Germany (+9%), in South America (+14%) and South Africa (+48%). In Germany, revenues increased by 5% to DM 20.3 billion. While revenues of the commercial vehicle division were up by 13%, market and exchange rate factors caused revenues for Mercedes-Benz passenger cars to be 4% below the high level of the previous year.
With worldwide sales of 422,500 passenger cars, the record volume of the comparable period of the previous year was nearly reached. Especially due to the model change in the E-Class but also due to the general consumer resistance, sales in the German market were still 8% lower than the high volume of 1994. In contrast, sales of 250,900 passenger cars in the foreign markets again exceeded the record sales of the previous year. We achieved especially strong growth in Japan (+17%) and Great Britain (+22%). The regions of Southeast Asia, Latin America and South Africa were also important areas of growth. In the U.S. market, which was softening overall, our sales increased by 3% - contrary to the trend in the sector.
The S-Class was able to further strengthen its market position worldwide and we also once again exceeded the high level of the previous year for the C-Class. Owing to the model change, sales of the E-Class remained below the numbers for the previous year. The response to the new E-Class is extremely positive. The lively inflow of orders confirms our international leading position in this segment. According to plan, a total of 438,400 passenger cars was produced in the period under review.
The commercial vehicle segment achieved a sales volume of 235,600 units in the first nine months of 1995 and continued the positive trend, with growth just under 15%. Contributing factors included the market success of the Sprinter and the successful expansion of sales volume for the segment of Trucks Europe by 19% to 50,600 units, above all in heavy trucks. In the bus division, the slight decline in new registrations of Mercedes-Benz and Setra buses reflected the difficult situation in the Western European market, while Unimog sales increased from 1,500 to 1,900 units.
Of our overseas production companies, Freightliner was able to increase its sales to 57,000 vehicles (+24%) and to further expand ist market share in the U.S.A. With a sales growth of 22% to 39,100 units, Mercedes-Benz do Brasil was equally successful. On the other hand, sales of only 1,100 vehicles brought about a massive decline at Mercedes-Benz Mexico. At the same time, however, the Mexican recession appears to have bottomed out. The economic decline and turmoil in the currency markets are also affecting the course of business in Argentina, where we experienced a drop in sales from 10,700 to 5,600 units.
Having produced a total of 249,000 commercial vehicles (+17%), we achieved the highest production in a nine-month period in company history. Production in Europe contributed 150,600 units (+21%) to this figure, while 98,400 vehicles (+10%) rolled of the assembly lines of our overseas companies.
AEG Daimler-Benz Industrie
DM amounts in millions Jan.-Sept. 95 Jan.-Sept. 94 *) Revenues 6,754 6,716 Incoming orders 9,439 7,589 Employees (9/30) 51,342 52,916 *) Adjusted to take account of significant changes in consolidation.
At DM 6.8 billion, revenues of AEG Daimler-Benz Industrie were slightly higher in the first nine months of 1995 than the figure for the same period in 1994. The 4% decline in Germany was offset by the expansion in business abroad (+5%). At a 16% growth rate, TEMIC achieved a double-digit increase in revenues, to which the gas generator and semi-conductor divisions contributed substantially. The 10% growth in automation technology was primarily the effect of the first-time consolidation of our U.S. postal automation subsidiary ElectroCom Automation Inc. Business volume was down 5% in optoelectronics and vacuum electronics. Declines were also recorded during the first nine months in the other divisions: 5% in energy systems technology and in diesel engines, 7% in rail systems. However, we expect substantial extensive invoicing in this area during the fourth quarter of 1995.
In the period under review, incoming orders for AEG Daimler-Benz Industrie were up 24%. This reflected increased ordering activities in Germany (+6%), but primarily in the foreign markets (+46%). The rail systems segment achieved 50% growth as a result of large orders especially from Berlin, Kuala Lumpur and San Francisco. In automation technology, incoming orders were up 27% due to higher incoming orders in industrial automation technology and the first-time consolidation of ElectroCom Automation, Inc. The energy systems division also reported a 27% increase, largely contributed by the energy distribution, industrial components and electrical equipment segments. Orders were up 18% at TEMIC and 19% in optoelectronics and vacuum electronics. In the diesel engines division, the previous yearís volume of incoming orders was exceeded by 5%.
Daimler-Benz Aerospace (DASA)
DM amounts in millions Jan.-Sept. 95 Jan.-Sept. 94 *) Revenues 8,614 8,690 Incoming orders 9,384 8,962 Employees (9/30) 61,145 67,367 *) Adjusted to take account of significant changes in consolidation.
The weak U.S. dollar and the persistently inadequate demand in the aircraft markets continued to affect DASAís course of business. At DM 8.6 billion, revenues during the first nine months reached the level of the same period of the previous year. In the space systems division, the final settlement for the ERS-2 research satellite brought about a strong increase, while the newly formed joint venture Nortel Dasa Network Systems contributed to a moderate expansion of business in the defense and civil systems division. At the same time, revenues in the propulsion systems and aircraft divisions, which are particularly affected by the weak dollar, continued to decline.
At DM 9.4 billion, the 5% growth in incoming orders was primarily carried by the space systems division, which received several large contracts. In the defense and civil systems division, the new joint venture Nortel Dasa Network Systems contributed to higher orders. Due to currency factors, incoming orders in propulsion systems were only slightly higher than in the first nine months of 1994. The aircraft division failed to reach the 1994 level, since the regional aircraft division was unable to achieve the high order volume of the previous year. This was also caused by the decline of the dollar exchange rate compared to the same period of the previous year.
Daimler-Benz InterServices (debis)
DM amounts in millions Jan.-Sept. 95 Jan.-Sept. 94 Revenues 8,572 7,889 Employees (9/30) 10,169 9,173 In the period under review, Daimler-Benz InterServices (debis) increased its business volume by 9% to DM 8.6 billion. While nearly all the divisions contributed to this, Systemhaus, trading, marketing services and mobile communications services were the main contributors. Unfavorable currency trends prevented an even more significant increase in revenues.
Financial services again made the largest contribution to debisí total revenues, and at DM 5.6 billion reached the previous yearís figure. The negative influence of currency fluctuations was particularly noticeable in this segment. At DM 1.5 billion, Systemhaus was able to increase its revenues by 9% compared to the same period in the previous year; a substantial share was contributed by the computer communication services segment. The insurance brokerage, trading and real estate management divisions also contributed to the positive trend; revenues in each division exceeded the 1994 level. Due to new customers, revenues in marketing services clearly increased to DM 0.5 billion (+50%). We continued to record particularly strong growth in mobile communications services, where we expanded our business volume by 77% in the first nine months.
Outlook
In spite of several negative factors, particularly those relating to exchange rate trends, we expect revenues for the year to be above last year's. All corporate units of the Group will contribute to this expansion of business.
The growth in revenues at Mercedes-Benz will largely be carried by the success of the commercial vehicles division, where we expect to be able to sell around 330,000 units in 1995. A slight decline can be expected in passenger cars especially in Western Europe. Even so, we expect that the sales figure for the current year will be able to continue the high volume of the previous year - not least because of the generally positive response to the new E-Class.
On October 18, the European Commission approved the planned merger of the rail systems activities of the electronics group ABB and AEG Daimler-Benz Industrie. The 50:50 joint venture will be formed with effect of January 1, 1996 and will use the name ABB Daimler-Benz Transportation, with corporate headquarters in Berlin. Moreover, AEG Daimler-Benz Industrie GmbH is currently conducting negotiations with companies interested in acquiring the automation and energy systems technology divisions.
On the basis of the "Dolores" investigations, DASA has started a competitive initiative including a package of actions intended to create long-term earnings capability. The activities that have been initiated and still need to be discussed with the employee representatives and policy decision-makers should make each division of DASA participating in the world market competitive even at a U.S. dollar exchange rate of DM 1.35. DASA's Board of Management will make the final decision concerning the necessary actions at the end of November 1995.
The result of the Daimler-Benz Group will be negatively affected by the high value of the D-Mark, changes in the Group portfolio and the reserves necessary for the restructuring in the aircraft division of DASA. On the other hand, positive effects result from the current cost reduction programs of all corporate units as well as the persistently favorable business trend at Mercedes-Benz and debis. For year as a whole, we continue to expect a severe net loss for the Group.
November 1995
Daimler-Benz Aktiengesellschaft
The Board of Management
© 1995 Daimler-Benz
