Profit from ordinary activities reported by Daimler AG for 2015 amounts to €4.7 billion (2014: €5.0 billion). The development of earnings reflects the increase in operating profit of €1.2 billion to €2.6 billion and the decrease in financial income of €1.5 billion to €2.1 billion. (See table B.36)

B.36 Condensed statement of income of Daimler AG

  2015 2014
In millions of euros    
Revenue 101,537 83,947
Cost of sales (including R&D expenses) -91,733 -75,307
Selling expenses -6,695 -6,518
General administrative expenses -1,969 -1,885
Other operating income, net 1,441 1,122
Operating profit 2,581 1,359
Financial income 2,074 3,635
Profit from ordinary activities 4,655 4,994
Income tax expense -900 -1,223
Net profit 3,755 3,771
Transfer to retained earnings -278 -1,150
Distributable profit 3,477 2,621

Revenue increased, as forecast in the previous year, due to higher unit sales of vehicles and components by €17.6 billion to €101.5 billion. In the car business, revenue thus rose by 24 % to €77.9 billion. Also with trucks and vans, higher unit sales of vehicles and components led to an increase in revenue of 13 % to €23.6 billion.

The earnings achieved by the car business in 2015 were significantly higher than in the previous year. The development of earnings was influenced by ongoing growth in unit sales in Europe, the United States and Asia. There were opposing, negative effects from expenditure for new products and technologies, amongst other factors. Unit sales in the car business increased by 14 % to 1,790,000 vehicles1 in the year under review. Of the various model series, the new C-Class was extremely successful in 2015 with a 29 % increase in unit sales to 375,000 vehicles1. SUVs (including the GLA) posted sales growth of 19 % to 455,000 units1.

Earnings from trucks and vans were significantly higher than in 2014. Sales of trucks increased by 11 % to 102,000 units1. Sales of vans increased by 12 % to 314,000 units1.

Cost of sales increased by 22 % to €91.7 billion. Increases in unit sales and expenses for new products and technologies led to higher cost of sales. Research and development expenses, which are included in cost of sales, were higher than in the previous year at €5.6 billion (2014: €4.9 billion); as a proportion of revenue, they amounted to 5.5 % (2014: 5.8 %). Research and development expenses were primarily related to the renewal and expansion of the product portfolio, especially with regard to the model series of the E-Class, the SUVs and the compact class. In addition, we are continuously working on new generations of engines and alternative drive systems. At the end of the year, approximately 18,000 people were employed in the area of research and development.

Selling expenses increased by €0.2 billion to €6.7 billion. This was primarily due to higher expenses for marketing and outbound shipping. As a proportion of revenue, selling expenses decreased from 7.8 % to 6.6 %.

General administrative expenses of €2.0 billion were slightly above the prior-year level (2014: €1.9 billion). In relation to revenue, they amounted to 1.9 % (2014: 2.2 %).

Other operating incomeamounted to €1.4 billion (2014: €1.1 billion). As part of the organizational focus on the divisions, a restructuring program for the German sales organization was started in 2014. In that context, individual selected locations of the Group’s own sales network in Germany were sold in 2015. The income and expenses from the sale of the individual sales locations, in particular the expenses for personnel actions, result in a net expense of €0.2 billion. In the previous year, there had been a negative impact of €0.6 billion from expenses in connection with the antitrust investigations of European manufacturers of commercial vehicles by the EU Commission. (See table B.36)

Financial income decreased by €1.5 billion to €2.1 billion, primarily due to interest income/expense. The decrease mainly reflects the higher interest expense relating to retirement benefit obligations, which was caused by the lower discount rate. Interest income/expense was also influenced by lower income from pension plan assets.

The income tax expense amounts to €0.9 billion (2014: €1.2 billion). In 2015, the figure includes high tax benefits of €0.7 billion connected with the tax assessment of previous years. Despite a higher tax expense for the year 2015 as a result of the improved operating profit, these tax benefits led to a reduction in the effective income tax expense compared with 2014.

Net profit of €3.8 billion was at the prior-year level. The higher than forecast operating profit was partially offset by opposing effects in financial income. Net profit is therefore significantly higher than the amount originally expected.

The economic situation of Daimler AG primarily results from its business operations and those of its subsidiaries. Daimler AG participates in the operating results of its subsidiaries through profit distributions. The economic situation of Daimler AG is therefore fundamentally the same as that of the Daimler Group, which is described in the chapter “Overall Assessment of the Economic Situation.

1 Unit sales relate solely to new vehicles. The unit sales of Daimler AG include vehicles invoiced to companies of the Group which have not yet been sold on to external customers by those companies. Vehicle sales by production companies of the Daimler Group to external customers and subsidiaries of Daimler AG are not counted in unit sales.

Financial position, liquidity and capital resources
Daimler AG