Consolidated statement of income

The Group’s total revenue increased by 15.1 % to €149.5 billion in 2015; adjusted for exchange-rate effects, it increased by 9.0 %. The revenue growth primarily reflects the strong demand for our products in nearly all divisions. Further information on the development of revenue is provided in the Business development section of this Management Report. (See table B.18)

B.18 Consolidated statement of income

  2015 2014 15/14
In millions of euros     % change
Revenue 149,467 129,872 +15
Cost of sales -117,670 -101,688 +16
Gross profit 31,797 28,184 +13
Selling expenses -12,147 -11,534 +5
General administrative expenses -3,710 -3,329 +11
Research and non-capitalized development costs -4,760 -4,532 +5
Other operating income 2,114 1,759 +20
Other operating expense -555 -1,160 -52
Share of profit from equity-method investments, net 464 897 -48
Other financial expense, net -27 458 .
Interest income 170 145 +17
Interest expense -602 -715 -16
Profit before income taxes 12,744 10,173 +25
Income taxes -4,033 -2,883 +40
Net profit 8,711 7,290 +19
attributable to non-controlling interests 287 328 -13
attributable to shareholders of Daimler AG 8,424 6,962 +21

Cost of sales amounted to €117.7 billion in 2015, increasing by 15.7 % compared with the previous year. The rise in cost of sales was caused by higher business volumes and consequentially higher material expenses. Personnel expenses and depreciation of equipment on operating leases and of property, plant and equipment also increased. Further information on cost of sales is provided in Note 5 of the Notes to the Consolidated Financial Statements. (See table B.18)

Gross profit therefore increased by 12.8 % overall.

Due to the growth in unit sales, selling expenses increased by €0.6 billion to €12.1 billion. The main factors here were higher expenses for marketing and personnel. As a percentage of revenue, selling expenses decreased from 8.9 % to 8.1 %. (See table B.18)

General administrative expensesof €3.7 billion were above the level of the previous year (2014: €3.3 billion), mainly driven by higher IT and personnel expenses. As a percentage of revenue, general administrative expenses decreased slightly to 2.5 % (2014: 2.6 %). (See table B.18)

Research and non-capitalized development costs increased by €0.2 billion to €4.8 billion in 2015. They were mainly related to the development of new models, advance expenditure for the renewal of existing models and the further development of fuel-efficient and environmentally friendly drive systems as well as safety technologies and autonomous driving. As a proportion of revenue, research and non-capitalized development costs decreased from 3.5 % to 3.2 %. Further information on the Group’s Research and development costs is provided in the section of the Sustainability chapter of this Management Report. (See table B.18)

Other operating income increased to €2.1 billion (2014: €1.8 billion). Other operating expense decreased significantly to €0.6 billion (2014: €1.2 billion), due in particular to expenses of €0.6 billion in the previous year related to the ongoing antitrust investigations of European manufacturers of commercial vehicles by the EU Commission. Further information on the composition of other operating income and expense is provided in Note 6 of the Notes to the Consolidated Financial Statements. (See table B.18)

In 2015, our share of profit from equity-method investments decreased to €0.5 billion (2014: €0.9 billion). In 2014, Daimler lost its significant influence on Tesla, which was previously accounted for using the equity method; the subsequent remeasurement of our Tesla shares resulted in a gain of €0.7 billion in 2014. (See table B.18)

Other financial expense/income decreased from an income of €458 million to an expense of €27 million. This was primarily due to the disposal of the RRPSH shares, which resulted in a gain of €1.0 billion in 2014. (See table B.18)

Net interest expense improved to €0.4 billion (2014: €0.6 billion). Expenses in connection with pension and healthcare benefit obligations decreased, primarily due to lower applicable interest rates. Other interest expense improved, mainly because of the successive expiry of refinancing at high interest rates. (See table B.18)

The tax expense of €4.0 billion stated under income tax expenseis €1.1 billion higher than in 2014, mainly due to the improved pretax income. The effective tax rate for 2015 was 31.6 % (2014: 28.3 %). In 2014, a gain was recognized on the sale of the RRPSH shares that was largely tax free. But also expenses arose that were not tax deductible in connection with the ongoing antitrust investigations of European manufacturers of commercial vehicles by the EU Commission. Therefore, the increase in pretax income is mainly an increase in normally taxed earnings, which led to a correspondingly higher tax expense. In both years, the income tax expense was affected by additional tax benefits and expenses. The year 2015 includes tax benefits in connection with the tax assessment of previous years as well as tax expenses due to valuation allowances on deferred tax assets, while in the year 2014, gains were recognized on the reversal of valuation allowances on deferred tax assets. (See table B.18)

Net profit for the year amounts to €8.7 billion (2014: €7.3 billion). Net profit of €0.3 billion is attributable to non-controlling interests (2014: €0.3 billion). Net profit attributable to the shareholders of Daimler AG amounts to €8.4 billion (2014: €7.0 billion), representing earnings per share of €7.87 (2014: €6.51). (See table B.18)

The calculation of earnings per share (basic) is based on an unchanged average number of outstanding shares of 1,069.8 million.