Annual Report 2017

Free cash flow and liquidity

The anticipated development of earnings in the automotive divisions will have a positive impact on the free cash flow of the industrial business. There will be a negative effect, however, from the further increase in advance expenditure for new products and technologies. Under these conditions, we assume that the free cash flow of the industrial business should be significantly higher than in the previous year and also higher than the dividend distribution planned in 2018. It must be taken into consideration, however, that the free cash flow of the industrial business in 2017 was reduced by an extraordinary contribution of €3 billion to the German pension fund assets.

For the year 2018, we aim to have liquidity available in a volume appropriate to the general risk situation in the financial markets and to Daimler’s risk profile. When measuring the level of liquidity, we give due consideration to possible refinancing risks caused for example by temporary distortions in the financial markets. We continue to assume, however, that we will have very good access to the capital markets and the bank market also in the year 2018. We aim to cover our funding needs in the planning period primarily by means of bonds, commercial paper, bank loans, customer deposits in the direct banking business and the securitization of receivables in the financial services business; the focus will be on bonds and loans from globally and locally active banks. In view of the very good liquidity situation of the international capital markets and our strong creditworthiness, we expect a continuation of very attractive refinancing conditions in 2018. An additional goal is to continue securing a high degree of financial flexibility.

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