Value added

As described in the ”Performance measurement system” section of the Corporate Profile chapter in table B.03, the cost of capital is the result of net assets and cost of capital expressed as a percentage, which is subtracted from earnings in order to calculate value added. The tables B.21 and B.22 show value added and net assets for the Group and for the individual divisions. Table B.23 shows how net assets are derived from the consolidated statement of financial position.

B.21 Value Added

  2015 2014 15/14
In millions of euros     % change
Daimler Group 5,675 4,416 +29
Mercedes-Benz Cars 5,881 3,799 +55
Daimler Trucks 1,619 761 +113
Mercedes-Benz Vans 703 473 +49
Daimler Buses 105 79 +33
Daimler Financial Services 467 457 +2

B.22 Net assets (average)

  2015 2014 15/14
In millions of euros     % change
Mercedes-Benz Cars 17,045 17,114 -0
Daimler Trucks 7,974 9,313 -14
Mercedes-Benz Vans 1,479 1,742 -15
Daimler Buses 906 982 -8
Daimler Financial Services1 8,859 7,154 +24
Net assets of the divisions 36,263 36,305 -0
Equity method investments2 770 618 +25
Assets and liabilities from income taxes3 3,772 2,700 +40
Other reconciliation3 839 1,156 -27
Daimler Group 41,644 40,779 +2

1 Total equity

2 To the extent not allocated to the segments

3 Industrial business

B.23 Net assets of the Daimler Group at year-end

  2015 2014 15/14
In millions of euros     % change
Net assets of the industrial business      
Intangible assets 9,789 9,144 +7
Property, plant and equipment 24,262 23,125 +5
Leased assets 15,864 14,374 +10
Inventories 22,862 20,004 +14
Trade receivables 8,215 7,824 +5
Less provisions for other risks -15,198 -13,420 +13
Less trade payables -10,182 -9,852 +3
Less other assets and liabilities -24,353 -22,438 +9
Assets and liabilities from income taxes 3,055 3,981 -23
Total equity of Daimler Financial Services 9,872 7,617 +30
Net Assets 44,186 40,359 +9

The Group’s value added amounted to €5.7 billion in 2015 (2014: €4.4 billion), representing a return on net assets of 21.6 % (2014: 18.8 %). This was once again substantially higher than the minimum required rate of return of 8 %. The increase in value added was primarily due to the rise in the divisions operating profits, partially offset by higher income taxes and to a smaller extent offset by an increase in average net assets. Furthermore, value added in the previous year included the gains on the sale of the 50 % equity interest in RRPSH and the remeasurement and sale of the Tesla shares.

The value added of Mercedes-Benz Cars increased by €2.1 billion to €5.9 billion. This was mainly the result of the very positive development of earnings reflected by the growth in unit sales of new vehicles, better pricing, efficiency measures and exchange-rate effects. There were offsetting effects on value added from expenses from the expansion of production capacities as well as from advance expenditure for new technologies and vehicles. The division’s average net assets were nearly unchanged.

Value added at Daimler Trucks was significantly higher than in the previous year and reached €1.6 billion (2014: €0.8 billion). This was due to higher earnings resulting from increased unit sales in the NAFTA region and Europe, the realization of further efficiency improvements and positive exchange-rate effects. There were negative impacts on earnings from lower unit sales in Latin America and Indonesia, as well as from higher expenses for warranties and customer goodwill and for the expansion of production capacities, and from advance expenditure for new technologies and vehicles. In addition, the reduction in average net assets resulting among other things from the sale of the 50 % equity interest in the associated company RRPSH in 2014 also led to the increase in value added.

Mercedes-Benz Vans’ value added increased by €0.2 billion to €0.7 billion as a result of the significant improvement in EBIT reflecting the very positive development of unit sales, especially in Europe and in the NAFTA region. This was mainly due to the very strong growth rates for the V-Class and the new Vito. On the other hand, expenses for warranties and customer goodwill affected EBIT negatively. Average net assets decreased by €0.3 billion and also made a minor contribution to the increase in value added.

The value added of the Daimler Buses division was €26 million higher than in previous year and amounted to €105 million in 2015. This increase was primarily due to the development of EBIT. Positive effects primarily resulted from the good business with complete buses with a favorable product mix in Western Europe, further efficiency improvements and positive exchange-rate effects. Offsetting, negative effects came from the ongoing difficult economic situation in Latin America. Compared to the previous year, average net assets decreased by €76 million.

Daimler Financial Services’ value added of €0.5 billion was close to the level of 2014. The division’s return on equity amounted to 18.3 % (2014: 19.4 %). The development of value added primarily reflects the increase in EBIT due to growth in contract volume and positive exchange-rate effects, which more than offset additional expenses in connection with the expansion of business operations. Average equity rose by €1.7 billion to €8.9 billion.

Liquidity and Capital Resources
Net operating profit