Annual Report 2017

Financial Position

The balance sheet total increased compared with December 31, 2016 from €243.0 billion to €255.6 billion; adjusted for the effects of currency translation, the increase amounted to €25.3 billion. Daimler Financial Services accounted for €150.0 billion of the balance sheet total (2016: €141.8 billion), equivalent to 59 % of the Daimler Group’s total assets (2016: 58 %).

The increase in total assets was primarily due to the growth of the financial services business and higher trade receivables. In addition, the higher volume of capital expenditure led to an increase in intangible assets and property, plant and equipment. On the liabilities side, the increased refinancing requirement resulting from the portfolio growth led to increased financing liabilities. Furthermore, there was an increase in shareholders’ equity. Current assets accounted for 42 % of the balance sheet total, which was at the prior-year level. Current liabilities amounted to 34 % of total equity and liabilities, which was slightly below the prior-year level (2016: 35 %).

Intangible assets of €13.7 billion (2016: €12.1 billion) included €10.3 billion of capitalized development costs (2016: €8.8 billion), €2.0 billion (2016: €1.4 billion) of franchises, industrial property and similar rights, as well as €1.1 billion of goodwill (2016: €1.2 billion). The Mercedes-Benz Car division accounted for 79 % (2016: 76 %) and Daimler Trucks for 10 % (2016: 14 %) of development costs. Capitalized development costs amounted to €2.8 billion in 2017 (2016: €2.3 billion), and accounted for 32 % of the Group’s total research and development expenditure (2016: 31 %) (See Intagible assets).

Property, plant and equipment (See Property, plant and equipment) increased to €28.0 billion (2016: €26.4 billion). In 2017, €6.7 billion was invested worldwide (2016: €5.9 billion), in particular at our production and assembly sites for new products and tech­nologies and for the expansion and modernization of production facilities. The sites in Germany accounted for €4.0 billion of the capital expenditure (2016: €3.6 billion).

Equipment on operating leases and receivables from financial services rose to a total of €133.5 billion (2016: €127.4 billion). The increase adjusted for exchange-rate effects of €14.5 billion was primarily caused by the higher level of new business at Daimler Financial Services. The growth in business operations reflected the successful course of business, especially in Asia and Europe. The growth in the sales-financing business was especially significant in China and other Asian countries. The leasing and sales-financing business as a proportion of total assets was at the prior-year level of 52 %.

Equity-method investments of €4.8 billion (2016: €4.1 billion) mainly comprised the carrying amounts of our equity interests in Beijing Benz Automotive Co., Ltd., BAIC Motor Corporation Ltd., There Holding B.V. and LSH Auto International Limited. See Note 13 of the Notes to the Consolidated Financial Statements for further information.

Inventories increased from €25.4 billion to €25.7 billion, equivalent to 10 % of total assets, and were thus at the prior-year level. The increase adjusted for exchange-rate effects of €1.4 billion applied to all automotive divisions.

Trade receivables amounted to €12.0 billion, which is above the prior-year level of €10.6 billion. The Mercedes-Benz Cars division accounted for 43 % of these receivables and the Daimler Trucks division accounted for 24 %.

Cash and cash equivalents increased compared with the end of 2016 by €1.1 billion to €12.1 billion.

Marketable debt securities decreased compared with December 31, 2016 from €10.7 billion to €10.1 billion. Those assets included the debt instruments that are allocated to liquidity, most of which are traded in active markets. They generally had an external rating of A or better.

Other financial assets increased by €1.1 billion to €6.8 billion. They primarily consisted of derivative financial instruments, equity instruments in non-consolidated subsidiaries and other investments, as well as loans and other receivables due from third parties. The increase was primarily attributable to higher positive fair values of currency derivatives.

Other assets of €9.0 billion (2016: €9.5 billion) primarily comprised deferred tax assets and tax refund claims. The decrease in deferred tax assets primarily related to effects from the measurement of derivatives not recognized in profit and loss.

The Group’s equity increased compared with December 31, 2016 from €59.1 billion to €65.3 billion; adjusted for the effects of currency translation, the increase amounted to €8.8 billion. The increase in equity was mainly due to net profit of €10.9 billion (See Statement of Income) and the remeasurement of derivative financial instruments not recognized in profit and loss of €1.7 billion. The increase was partially offset by the dividend of €3.5 billion paid out to Daimler’s shareholders and effects from currency translation of €2.7 billion. Equity attributable to the sharehol­ders of Daimler AG increased to €64.0 billion (2016: €58.0 billion).

In relation to the 5 % increase in the balance sheet total, equity increased by the disproportionally high rate of 10 %. Due to the effects described above, the Group’s equity ratio of 24.0 % was above the level at the end of 2016 (22.9 %); the equity ratio for the industrial business was 46.4 % (2016: 44.7 %). It is necessary to consider that the equity ratios at the end of 2016 and 2017 are adjusted for the paid and proposed dividend payments.

Provisions decreased from €26.8 billion to €24.6 billion; as a proportion of the balance sheet total, they were slightly below the prior-year level at 10 % (2016: 11 %). They primarily comprised provisions for pensions and similar obligations of €5.8 billion (2016: €9.0 billion), which mainly consists of the difference between the present value of defined benefit pension obligations of €31.7 billion (2016: €31.2 billion) and the fair value of the pension-plan assets applied to finance those obligations of €27.2 billion (2016: €23.4 billion). The decrease in provisions for pensions and similar obligations is primarily due to the extraordinary contribution of €3.0 billion into the German pension plan assets. Provisions also related to liabilities from income taxes of €1.6 billion (2016: €1.7 billion), from product warranties of €6.7 billion (2016: €6.1 billion) and for personnel and social costs of €4.4 billion (2016: €4.3 billion), as well as other provisions of €6.2 billion (2016: €5.7 billion).

B.32 Statement of financial position¹

  Consolidated Industrial Business² Daimler Financial Services
             
  2017 At December 31, 2016 2017 At December 31, 2016 2017 At December 31, 2016
in millions of euros            
             
Assets            
Intangible assets 13,735 12,098 12,789 11,199 946 899
Property, plant and equipment 27,981 26,381 27,914 26,314 67 67
Equipment on operating leases 47,714 46,942 18,711 17,433 29,003 29,509
Receivables from financial services 85,787 80,507 -109 -87 85,896 80,594
Equity-method investments 4,818 4,098 4,670 4,043 148 55
Inventories 25,686 25,384 24,492 24,426 1,194 958
Trade receivables 11,990 10,614 9,737 8,977 2,253 1,637
Cash and cash equivalents 12,072 10,981 9,515 8,751 2,557 2,230
Marketable debt securities 10,063 10,748 8,894 9,498 1,169 1,250
thereof current 9,073 9,648 8,893 9,497 180 151
thereof non-current 990 1,100 1 1 989 1,099
Other financial assets 6,801 5,736 -10,933 -11,045 17,734 16,781
Other assets 8,958 9,499 -61 1,637 9,019 7,862
Total assets 255,605 242,988 105,619 101,146 149,986 141,842
             
Equity and liabilities            
Equity 65,314 59,133 52,936 48,685 12,378 10,448
Provisions 24,617 26,810 23,591 25,768 1,026 1,042
Financing liabilities 127,124 117,686 1,600 -1,451 125,524 119,137
thereof current 48,746 47,288 -19,435 -20,480 68,181 67,768
thereof non-current 78,378 70,398 21,035 19,029 57,343 51,369
Trade payables 12,474 11,567 11,655 10,853 819 714
Other financial liabilities 11,522 12,869 7,622 9,645 3,900 3,224
Other liabilities 14,554 14,923 8,215 7,646 6,339 7,277
Total equity and liabilities 255,605 242,988 105,619 101,146 149,986 141,842

1 The columns „Industrial business“ and „Daimler Financial Services“ represent a business point of view.

2 The industrial business comprises the vehicle segments Mercedes-Benz Cars, Mercedes-Benz Trucks, Mercedes-Benz Vans and Daimler Buses. Intra-group eliminations between the industrial business and Daimler Financial Services are generally allocated to the industrial business.

Financing liabilities of €127.1 billion were above the prior-year level (€117.7 billion). The increase of €16.2 billion adjusted for exchange-rate effects was primarily due to the refinancing of the growing leasing and sales-financing business. 53 % of the financing liabilities were accounted for by bonds, 27 % by liabilities to financial institutions, 9 % by deposits in the direct banking business and 9 % by liabilities from ABS transactions.

Trade payables increased to €12.5 billion due to the higher volume of business (2016: €11.6 billion). The Mercedes-Benz Cars division accounted for 63 % of those payables and the Daimler Trucks division accounted for 20 %.

Other financial liabilities of €11.5 billion (2016: €12.9 billion) mainly consisted of liabilities from residual-value guarantees, liabilities from wages and salaries, deposits received and accrued interest on financing liabilities. The decrease was primarily caused by lower negative fair values of currency derivatives.

Other liabilities of €14.6 billion (2016: €14.9 billion) primarily comprise deferred income, tax liabilities and deferred taxes. The tax reform in the United States affected the deferred tax liability. This was offset in particular by an increase in deferred income due to the expansion of business activity.

Further information on the assets presented in the statement of financial position and on the Group’s equity and liabilities is provided in the Consolidated Statement of Financial Position see Consolidated Statement of Changes in Equity and the related notes in the Notes to Consolidated Financial Statements.

Daimler AR2017 B.33 Balance sheet structure Daimler Group
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