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FULL ARTICLE | EDITORIAL 
Mercedes - Sharper bite
Peter Schmidt | Editor

Published: Fri, 05th February 2016 15:39:45 GMT
 

Mercedes-Benz Daimler models Frankfurt IAA 2015


Open quote signHappy workers, they say, provide higher quality service. If metal bashing is their trade, more often than not these happy workers also churn out some quality products, snapped up the world over by equally happy customers. In reflection, Daimler’s bigwigs can look back at 2015 with a great deal of gratitude, with shareholders and the workforce reaping the rewards of a true vintage year.

Daimler’s workforce, made up in the main of Mercedes employees, are a lucky bunch. A luxury cruise? 

A long-haul holiday with a partner? 

Or perhaps a hefty down-payment for one of those trendy Crossovers perhaps? 

From today, thanks to a handy windfall bonus payment, these and similar questions will be on the minds of Daimler’s fortunate workforce. 

For shareholders there’s a best-ever dividend payment of €3.25 per share. 

The declared employee bonus, thanks to last year’s bumper earnings, is put at a pretty useful €5,650. 

That’s an 86 per cent rise in just twelve months. 

Now, that’s not bad going. 

Daimler’s generosity towards shareholders and staff alike reflects last year’s bumper earnings. 

Mercedes can justifiably brag about last year’s result. 

Most revealing of all? 

Its on-going thrust in China. 

Despite stiffening headwinds there, which already brought BMW’s and Audi’s previously speeding bandwagon to a screeching halt, so far Mercedes’ China business continued to flourish. 

That’s a trend-bucking one third jump in last year’s Chinese sales to 373,500 units. 

China now ranks as Mercedes’ single biggest car market. The company’s bean counters will feel pretty good about all that.

Last year’s global sales from the Mercedes car arm narrowly topped the 2 million threshold. 

Sales revenue is up 14 per cent to €83.8bn, but a reflection of its richer sales mix, last year’s pre-tax profits rocketed ahead 41 per cent to €8.2bn. 

The car unit completed last year with a pre-tax margin of 9.8 per cent. 

That’s a 1.8 percentage point gain in just twelve months. 

Its truck arm, buoyed by last year’s bumper US sales, chipped in with a one-third jump in pre-tax earnings to €2.6bn, lifting its margin by 1.1 points to 6.9 per cent. 

Making it a triple winning streak, the van side also upped its profits by a third to €900m, thus ending a golden year with a 7.8 per cent pre-tax margin. 

Impressive stuff.

All added together, including the luscious fruits from its highly profitable Financial Service side, lifts last year’s pre-tax Daimler profits more than a quarter to a bumper €13.5bn. 

That’s a 9 per cent pre-tax margin. 

Running out of puff? 

Not quite. 

Still humming a happy tune, for the current year Mercedes forecasts “significantly higher unit sales” for both its prestige car and its van business and “prior year sales” from its truck operation. 

Unlike today’s dejected oil majors, dogged by the crude price collapse, and frantically looking to restructure their vast empires in a last ditch effort to cut costs - mainly heads, Daimler’s happy message, after seeking out and finding top-line growth in all the right fields, focuses instead on a record share-out to both its shareholders and workforce.

What is it they say about old dogs? 

Well, Mercedes has learned a host of new tricks – one of them a sharper bite. 

Just ask BMW and Audi
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