Daimler's CEO Discusses Q4 2011 Results - Earnings Call Transcript
Daimler AG (
)
Q4 2011 Earnings Call
February 9, 2012 08:00 am ET
Executives
Dr. Michael Mühlbayer - Head, IR and Treasury
Dr. Dieter Zetsche - Chairman of the Board of Management Daimler AG /
Head of Mercedes-Benz Cars
Bodo Uebber - Finance & Controlling/Daimler Financial Services
Analysts
Jochen Gehrke - Deutsche Bank AG
Philippe Houchois - UBS
John Lawson - Citi Investment Research
Horst Schneider - HSBC Trinkaus & Burkhardt AG
Stuart Pearson - Morgan Stanley
Thierry Huon - Exane
Daniel Schwarz - Commerzbank
Fraser Hill - Bank of America
Christian Breitsprecher - Macquarie
Stephen Reitman - Societe Generale
Arndt Ellinghorst - Credit Suisse
Kristina Church - Barclays Capital
Presentation
Operator
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Welcome to the global conference call of Daimler. At our customer’s request, this conference will be recorded. The replay of the conference call along with the presentation slides will also be available as an on-demand audio webcast in the Investor Relations section of the Daimler website. The short introduction will be directly followed by a Q&A session. (Operator Instructions)
I would like to remind you that this teleconference is governed by the Safe Harbor wording that you find in your published results documents. Please note that our presentations contain forward-looking statements that reflect management’s current views with respect to future events. These forward-looking statements can be identified by expressions such as assume, anticipate, believe, estimate, expect, intend, may, plan, project, and should. Such statements are subject to many risks and uncertainties, examples of which are set out in the Safe Harbor wording in our disclosure document. If the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. Forward-looking statements speak only to the date on which they are made.
May I now hand you over to Dr. Michael Mühlbayer, Head of Daimler Investor Relations and Treasury.
Thank you very much.
Dr. Michael Mühlbayer
Good afternoon, this is Michael Mühlbayer speaking. On behalf of Daimler, I would like to welcome you on both the telephone and the Internet to our full-year results conference call. We are happy to have with us today the Chairman of the Board of Management and Head of Mercedes-Benz Cars Dr. Dieter Zetsche; the CFO Bodo Uebber; and the head of Daimler Trucks Andreas Renschler. This morning at the annual press conference Dr. Zetsche and Bodo Uebber presented our figures in detail. The speeches and charts are available on the Daimler website.
Therefore we will start the conference call with a short introduction focusing on our Q4 results to have more time for Q&A.
Now, I would like to handover to Dr. Zetsche.
Dr.
Dieter
Zetsche
Thank you, Michael Mühlbayer. Good afternoon ladies and gentlemen. Let me start off with a summary of our 2011 full-year results and our fourth quarter figures. Next I’ll briefly discuss our long-term strategy and targets and I’ll end with our outlook for 2012.
Recall that last year at this time we promised record sales of Mercedes-Benz cars, higher van and
truck sales, portfolio growth at financial services as well an EBIT significantly above the previous year. Our team not only delivered on those promises, but achieved the best financial result of Daimler in terms of revenue, EBIT and net profit.
We posted revenues of revenues of €106.5 billion, EBIT of €9 billion from ongoing business and net profit of €6 billion. As a result our earnings per share rose to €5.31. Those very good earnings are also reflected in the significant increase of value added to €3.7 billion in 2011.
In the full-year 2011, we delivered an industrial free cash flow of €1 billion after a €2 billion pension contribution and €0.7 billion investment in Tognum. Accordingly, our industrial net liquidity remained at the level of €12 billion at the end of December. Summing up these are excellent results. And given our very solid business performance we will propose a dividend of €2.20. That equates to more than 40% of our net profit.
In this way we want our shareholders to participate appropriately once again in our financial success. We anticipate a continuation of this dividend development in the coming years. As you already know our full-year results pretty well. Let’s take a closer look at the fourth quarter of 2011. To make it short, it was the successful conclusion of a record year for Daimler. Our unit sales rose by 14% to 596,000 units. All of our divisions contributed with double digit sales increases.
Our group revenue increased by almost €2.7 billion to €29 billion. Our EBIT from ongoing business was €2.2 billion, up 22% over the previous year’s result. Despite our ongoing high level of investment in the fourth quarter we posted an industrial free cash flow of €1.2 billion. Now let’s turn to the major developments at our business unit.
Mercedes-Benz cars, sales rose by 11% to 376,000 units in the fourth quarter. Revenue was up 7% to €15.1 billion, slightly lagging our sales improvement. We posted an EBIT of €1.2 billion which corresponds to a margin of 8.2%. Fourth quarter EBIT benefits from higher volume and better pricing. However, it was also influenced by higher material and R&D expenditures as well as product launch costs. Development at Daimler Trucks are also compelling. Sales were up more than 20% during the last quarter as were revenues at €8.2 billion. Order intake in Q4, 2011 was 118,000 units. That’s 13% higher than Q4 2010.
Despite triple-digit million euro burdens for the launch of the new Actros, Daimler Trucks did reach an EBIT from ongoing business of €554 million with a corresponding clean EBIT margin of 5.5%. All regions of our truck business contributed to this result.
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