February 06, 2019 - The annual results of Daimler Financial Services AG for the year 2018 including an outlook for the business year 2019.
In 2018, Daimler Financial Services concluded new financing and leasing contracts worth a total of €71.9 billion (2017: €70.7 billion). About half of all new vehicle sales by the automotive divisions were supported by sales financing from Daimler Financial Services.
At the end of 2018, the division had more than 5.2 million financed or leased vehicles on its books, representing growth in contract volume of 10% to €154.1 billion. The division posted earnings of €1,384 million in 2018, which is 30% lower than in the previous year. Its return on equity was 11.1% (2017: 17.7%).
Earnings were reduced by €418 million due to the agreed settlement concluding the Toll Collect arbitration proceedings. The increasing level of interest rates had a negative impact on earnings. Rising cost of credit risks in individual markets impacted earnings negatively in the still relatively stable risk environment. Increased contract volume had a positive impact on EBIT.
Mobility services on the rise
Also in the year 2018, Daimler Financial Services further expanded its range of innovative mobility services. car2go increased its number of registered users to around 3.6 million (2017: 3.0 million) and thus strengthened its position as a leading company for flexible car sharing. The moovel app was also further developed: Customers in Germany can use it to find best way of traveling from A to B using various modes of transport.
They can also directly book and pay for services such as car2go or mytaxi, as well as journeys on public transport. In the United States, moovel is one of the leading providers of mobile ticketing solutions for transportation companies. In total, moovel North America offers 19 services in 15 US cities.
Market champion for urban mobility
The number of registered moovel users in Germany and the United States had risen to 6.2 million by the end of 2018 (2017: 3.7 million). The ride-hailing group, which operates mytaxi, further expanded its position as one of Europe’s leading providers of taxi apps in 2018 with the majority takeover of Chauffeur Privé. The service offering was expanded to twelve European countries and two fast-growing markets in South America. The number of registered users nearly doubled to 21.3 million (2017: 11.1 million).
“Our mobility services developed extremely well last year and now have approximately 31 million registered users. We now want to further enhance this strong market position in a partnership with BMW. We are convinced that together, we can offer our customers an even better range of mobility services, because both services complement each other in an ideal way. Our common goal is to create a market champion for urban mobility,” said Bodo Uebber, Member of the Board of Management of Daimler AG for Finance & Controlling and Daimler Financial Services.
Daimler AG and BMW Group join forces
Daimler AG and the BMW Group are joining forces to offer their customers sustainable urban mobility services from a single source. The competition authorities have now approved the companies’ plan to establish the joint venture. After completion of the complex transaction on January 31, 2019, the new mobility services company, Daimler AG and the BMW Group, will present the next steps to be taken in the first quarter of 2019.
Headquarters of the new joint mobility-services company will be located in Berlin. The goal is to jointly create a major player for seamless and intelligently connected mobility services. As a hub for creativity and innovation, Berlin is exactly the right location. The 50-50 joint venture will bring together the following five services: an on-demand mobility and multimodal mobility platform, car sharing, ride hailing, parking, and charging for electric vehicles.
Outlook for 2019
Daimler first announced its »Project Future« in October 2017. The shareholders’ approval for the new structure is to be obtained at the Annual Shareholders’ Meeting on May 22, 2019. The project is about the transformation of the Mercedes-Benz Cars and the Mercedes-Benz Vans divisions into the new company, Mercedes-Benz AG, and the Daimler Trucks and Daimler Buses divisions into the new Daimler Truck AG, making them legally independent entities. Daimler Financial Services AG, which is already a legally independent company, is to be renamed as Daimler Mobility AG, probably in July 2019.
Daimler Financial Services aims to achieve further growth in contract volume and slight growth in new business in 2019. New market potential is to be utilized through more flexible leasing and rental products. Additionally, the online sales channels are to be expanded. Daimler Financial Services expects slight revenue growth. On the basis of the anticipated market developments and the planning of the divisions, Daimler assumes that Group EBIT in 2019 will be slightly above the level of 2018.
It will also include significant positive effects on assets and earnings at the Daimler Financial Services division from the merger of its mobility services with those of the BMW Group. The expected growth in unit sales and revenue at all divisions will have a positive impact on the development of earnings.
“Our mobility services developed extremely well last year and now have approximately31 million registered users. We now want to place our power and expertise intoa partnership with BMW. We are convinced that together, we can offer our customers even better mobility solutions, because ourservices complement each other perfectly. Our common goal is to create a market champion for urban mobility.”