Annual Report 2019
Key Figures
Daimler Group
€ amounts in millions
2019
2018
19/18
% change
Revenue
172,745
167,362
+3 1
Investment in property, plant and equipment
Research and development expenditure
Free cash flow of the industrial business
EBIT
Net profit
Earnings per share (in €)
Dividend per share (in €)
Employees (December 31)
7,199
9,662
1,368
4,329
2,709
2.22
0.90
7,534
9,107
2,898
11,132
7,582
6.78
3.25
298,655
298,683
-4
+6
-53
-61
-64
-67
-72
-0
1 Adjusted for the effects of currency translation, revenue increased by 2%.
Cover photo
VISION EQS provides a preview of future large electric
luxury sedans. With this vehicle, Mercedes-Benz is
making a clear statement for the continued appeal of
high-quality vehicles and self-determined driving. We
are convinced that perfect craftsmanship, emotive
design, luxurious materials and individual driving plea-
sure will remain desirable in the future. Because the
idea of luxury – today and in the future – stands above
all for personal freedom. With the VISION EQS technol-
ogy carrier, Mercedes-Benz is focusing on a completely
new, fully variable battery-electric drive platform. It is
scalable in many respects and can be used across
many models. Thanks to the modular system, wheel-
base and track width as well as all other system com-
ponents, especially the batteries, are variable and thus
suitable for a broad range of vehicle concepts.
Daimler’s Divisions >
The Divisions and Brands
€ amounts in millions
Mercedes-Benz Cars
Revenue
EBIT
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Trucks
Revenue
EBIT
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Mercedes-Benz Vans
Revenue
EBIT
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Buses
Revenue
EBIT
Return on sales (in %)
Investment in property, plant and equipment
Research and development expenditure
thereof capitalized
Unit sales
Employees (December 31)
Daimler Mobility
Revenue
EBIT
Return on equity (in %)
New business
Contract volume
Investment in property, plant and equipment
Employees (December 31)
2019
2018
2017
19/18
% change
93,877
3,359
3.6
5,629
7,518
2,904
93,103
7,216
7.8
5,684
6,962
2,269
94,3511
8,8431
9.41
4,843
6,642
2,388
2,385,432
152,048
2,382,791
151,3162
2,373,527
142,666
40,235
2,463
6.1
971
1,490
53
488,521
83,437
14,801
-3,085
-20.8
240
543
96
438,386
21,346
38,273
2,753
7.2
1,105
1,295
40
517,335
82,6762
13,626
312
2.3
468
666
176
421,401
21,8102
4,733
4,529
283
6.0
134
203
23
32,612
17,960
28,646
2,140
15.3
74,377
162,843
87
12,680
265
5.9
144
199
41
30,888
17,7292
26,269
1,384
11.1
71,927
154,072
64
14,070
35,7551
2,3831
6.7
1,028
1,322
45
470,705
79,483
13,1611
1,1471
8.71
710
565
310
401,025
25,255
4,5241
2811
6.21
94
194
30
28,676
18,292
24,5301, 3
1,970
17.7
70,721
139,907
43
13,012
+1
-53
.
-1
+8
+28
+0
+0
+5
-11
.
-12
+15
+33
-6
+1
+9
.
.
-49
-18
-45
+4
-2
+5
+7
.
-7
+2
-44
+6
+1
+9
+55
.
+3
+6
+36
-10
1 The amounts have been adjusted due to first-time adoption of IFRS 15 and IFRS 9.
Further information is provided in Note 1 of the Notes to the Consolidated Financial Statements.
2 Adjustment of the number of employees in 2018 due to changes in the Group‘s internal allocation of employees.
3 At the Daimler Financial Services segment, the Group’s internal revenue and cost of sales have been adjusted by the same amount.
These adjustments have been fully eliminated in the reconciliation.
Our Brands
Daimler AG is one of the world’s most successful automotive companies.
With its Mercedes-Benz Cars & Vans, Daimler Trucks & Buses and Daimler Mobility
divisions, the Group is one of the leading global suppliers of premium cars and one
of the world’s largest manufacturer of commercial vehicles. Daimler Mobility offers
financing,leasing, fleet management, investments, credit card and insurance brokerage,
as well as innovative mobility services. For more information: w daimler.com
Daimler is on the move.
We are moving so that in the future we can continue to move
the world as a leading provider of sustainable mobility.
In everything we do, we focus on our customers’ wishes.
– Through a sustainable business strategy that is based on
integrity and compliance and focuses on people and the
conservation of our natural resources.
– Through profitable growth that safeguards our investments
in the future of mobility.
– Through a new corporate structure that makes us more
flexible and brings our business operations closer to our
customers.
– And through a corporate culture that creates free space
for creative ideas and reinforces our company’s innovative
strength.
That’s the foundation of our success. And that’s why we
offer outstanding prospects to our investors, partners, and
employees as well.
SUSTAINABLE
Our strategy
for the future
Sustainable mobility products and services, CO2 reduction, and cutbacks
in our use of resources are highly topical social policy demands — and
at Daimler they are key elements of our new sustainable business strategy.
We accept responsibility for the economic, environmental, and social
effects of our business operations, with the goal of creating value over
the long term for all of our stakeholders.
DAIMLER | MOVE PERFORM TRANSFORM 5
SUSTAINABLE
That’s why Daimler is pressing ahead with sustainable solutions for individ-
ual mobility and the transportation of tomorrow. We’re taking this course
so that we can stay on track for success in the future as well. Accordingly,
six sustainability-related themes complement our traditional strategy areas.
The spectrum ranges from climate protection and maintaining air quality to
resource conservation, livable cities and traffic safety, the responsible use
of data, and the promotion of human rights along the value chain.
ELECTRIFIED
Our electric
drives in
all segments
CO2-neutral mobility is our commitment and our challenge. To supple-
ment its combustion engine vehicles, today Daimler already offers an
extensive portfolio of electrically powered cars, vans, trucks, and buses,
as well as complementary mobility services. We are massively expanding
this range of products and services and making it even more attractive,
with increased profitability, comfort, and driving pleasure, longer ranges,
and an optimized charging infrastructure.
DAIMLER | MOVE PERFORM TRANSFORM 7
ELECTRIFIED
The path to emission-free mobility is clearly defined in all of our business
divisions. After the production launch of our EQ technology brand, we want
to continue expanding our range of battery-electric cars and hybrid vehicles,
as well as our battery production, step by step. Our van unit is also sys-
tematically electrifying its model range. And we are forging ahead with the
comprehensive electrification of our truck and bus brands. The fuel cell also
continues to be part of our Group-wide drive system strategy.
INDIVIDUAL
Our exclusive
mobility has
potential
Building the world’s best vehicles and thrilling customers with sustain-
able luxury — that’s what energizes us. We believe that our customers,
especially those in the premium segment, still want to own private
vehicles. That’s why individual mobility will remain a central principle
of Daimler’s business operations in the foreseeable future. In parallel,
we will fulfill the growing need for flexible mobility on demand by offering
innovative usage models.
INDIVIDUAL
DAIMLER | MOVE PERFORM TRANSFORM 9
That’s why we are expanding our range of premium cars. This market will con-
tinue to grow in the medium and long terms, with the luxury segment expected
to expand faster than the other segments. China and the rest of Asia will pri-
marily lead this growth, but the increasing prosperity of Europe and the United
States will also play a role. We intend to take full advantage of this potential
through our fascinating premium vehicles of the Mercedes-Benz brand, the
performance brand Mercedes-AMG, and the Mercedes-Maybach luxury brand.
AUTONOMOUS
Our pioneering
work on auto-
mated trucks
Automated vehicles offer wide-ranging opportunities for society and
business. For example, in the future highly automated trucks (SAE Level 4)
can enhance traffic safety, efficiency, and productivity. This technological
leap will enable Hub2Hub operations, primarily on US highways. The fully
automated connection between logistics centers is a promising business
model for US freight companies — and for Daimler Trucks.
DAIMLER | MOVE PERFORM TRANSFORM 11
AUTONOMOUS
That’s why we’re intensifying our efforts in the area of automated driving.
In the Daimler Trucks Autonomous Technology Group we consolidate global
expertise and activities related to autonomous trucks as we steadily
approach series production. For this purpose we have acquired a majority
interest in Torc Robotics, a pioneering company in the field of autonomous
driving systems. Together, we are already developing and testing this Level 4
technology on highways in the United States.
DIGITAL
Our claim to
leadership in the
digital world
At our company, intelligently networked products and processes are the
levers ensuring continued customer orientation, profitability, and efficiency.
Digital platforms and virtual assistants are increasingly becoming part of
work environments and daily lives — including those of our customers. Digital
products and services are therefore a central interface with our customers.
Daimler will continue to intensively press forward with digitalization, with the
goal of maintaining our position as a leading vehicle manufacturer.
DIGITAL
DAIMLER | MOVE PERFORM TRANSFORM 13
Through its digital services, Daimler is creating tangible value added for its
customers in all of its business divisions. In the process, Daimler’s own offers
can be seamlessly integrated with external services. Our own operating
systems give us optimal access to customers. We intend to use this access to
make sure that customer and vehicle data is handled responsibly.
FASCINATING
Our focus is on
our customers
With the sustainable modern luxury of our premium cars, we aim to thrill and
win over customers — all over the world. In the latest “Best Global Brands 2019”
ranking of the Interbrand consulting firm, Mercedes-Benz is the world’s
Number One premium brand in the automobile sector and one of the world’s
most valuable brands. In order to keep Daimler in the lead, we are particularly
strengthening the emotional connection with our customers and aligning
ourselves even more closely with their wishes — by offering a fascinating,
future-oriented portfolio of cars, vans, trucks, buses, and mobility services.
DAIMLER | MOVE PERFORM TRANSFORM 15
FASCINATING
We address our customers’ varied needs and possibilities by offering them customized
products and services. Outstanding customer experiences and customer utility are
always our top priorities. We offer special Mercedes-Benz moments and technologies
that spark emotions in our private car drivers and support the success of our com-
mercial customers. Our customer focus is also reinforced by our organization in three
independent units — Mercedes-Benz AG, Daimler Truck AG, and Daimler Mobility AG.
PROFITABLE
Our goal:
boosting our
performance
Profitability is the key to long-term success. And individual mobility
and transportation will continue to be Daimler’s growth drivers over
the long term. At the same time, we are positioning ourselves with
a clear-cut strategy for the transformation of the automotive industry:
through investments in electric mobility, digital platforms, autonomous
driving, and new services. This is necessary, but it will initially put
pressure on our financial results.
PROFITABLE
DAIMLER | MOVE PERFORM TRANSFORM 17
Nonetheless, we’re focusing on our goal and we want to continue being
profitable in the future. That’s why we’re counteracting the pressure
by means of comprehensive cost reduction and efficiency-enhancing
measures in all areas of the company. This is the only way that Daimler
can once again earn attractive returns in the medium term and fulfill
the high expectations of its investors, business partners, and employees.
GROWTH
Our presence
in important
markets
Daimler is pursuing the aim of reinforcing and expanding its leading positions
in all of its business divisions. Through sales of our premium cars, we want
to participate in the continuously growing luxury segment in Asia as well
as the United States and Europe. China is not only the world’s biggest car
market but also a significant market for new technologies and an important
purchasing market. We plan to continue growing in China together with our
local partners and to intensify our cooperation with them.
GROWTH
DAIMLER | MOVE PERFORM TRANSFORM 19
In all other segments as well, Daimler is setting its course for further regional growth.
The van unit plans to grow in North America in particular, and Daimler Trucks aims
to expand in Europe, NAFTA, Japan, and Latin America. As the market leader in our
most important traditional core markets for buses with a gross vehicle weight over
eight tons, we want to safeguard the market position and develop our business in the
NAFTA region. Our leasing, financing, and insurance services support these growth
strategies by promoting our customers’ loyalty and their connection with Daimler.
COOPERATIVE
Maximizing
our power
Throughout the Group, we are creating pioneering solutions that will shape
the individual mobility and transportation of tomorrow. In the future, addi-
tional crucial factors for developing the best products will be optimal access
to new technologies, global expertise, and the efficient use of capital. In
some situations, cooperation with partners will be a key factor for Daimler
and for the entire automotive industry — enabling faster market launches
and the profitable application of technically complex innovations.
DAIMLER | MOVE PERFORM TRANSFORM 21
COOPERATIVE
For example, Daimler and BMW are pooling valuable know-how and resources in the
development of driving assistance systems, automated driving functions on highways,
and automated parking functions of the next technology generation, as well as in the
YOUR NOW joint venture for mobility services. Together with our Chinese joint venture
partner Geely, we are developing our smart cars into an all-electric fleet. And in our
joint venture IONITY, we are expanding the comfortable and digitally payable high-power
charging network for electric vehicles on European highways.
CULTURE
We are driving
the new era of
mobility
Daimler relies on the strong motivation of its workforce and promotes its
diversity and integrity. That’s because tolerance, openness, trust, and fair-
ness make globally operating work teams strong. Integrity is a fundamental
value of our corporate culture, not only in dynamically changing times. It’s
a compass for all of our employees. In addition, our compliance systems for
data and technologies offer support and orientation as we develop innova-
tive products and services.
CULTURE
DAIMLER | MOVE PERFORM TRANSFORM 23
To speed up its pace of innovation, Daimler is implementing new leadership
principles and working methods through the Leadership 20X program.
And with initiatives such as Lab1886 and the Startup Autobahn we can put new
business models into practice even faster than before. We are also enabling
our employees to use the options offered by digitalization and implement
digital solutions faster. Our state-of-the-art office environments support their
agile cooperation through connectivity, communication, and collaboration.
A
Contents
s
t
n
e
t
n
o
C
i
d
e
n
b
m
o
C
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
s
n
o
i
s
i
v
i
D
e
h
T
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
t
r
o
p
e
R
l
i
a
c
n
a
n
F
-
n
o
N
i
d
e
t
a
d
i
l
o
s
n
o
C
s
t
n
e
m
e
t
a
t
S
l
i
a
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
r
u
F
A | To Our Shareholders
Ten Questions for the CEO and CFO
The Board of Management
Report of the Supervisory Board
The Supervisory Board
Highlights of 2019
Daimler and the Capital Market
Objectives and Strategy
24
26
32
34
40
42
48
52
B | Combined Management Report
58
60
65
70
77
86
Corporate Profile
Economic Conditions and Business
Development
Profitability
Liquidity and Capital Resources
Financial Position
Daimler AG
89
(condensed version according to HGB)
Sustainability and Integrity
93
Overall Assessment of the Economic Situation 106
107
Events after the reporting period
Remuneration Report
108
Takeover-Relevant Information
and Explanation
Risk and Opportunity Report
Outlook
132
135
150
D | Corporate Governance
Report of the Audit Committee
Declaration on Corporate Governance,
Corporate Governance Report
E | Non-Financial Report
Sustainability at Daimler
Environmental Issues
Employee Issues
Social Issues
Integrity and Compliance
Statement on the Review of the
Non-Financial Report
F | Consolidated Financial
Statements
Consolidated Statement of Income
Consolidated Statement of Comprehensive
Income/Loss
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Consolidated Financial
Statements
C | The Divisions
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Mobility
156
158
166
171
174
177
G | Further Information
Responsibility Statement
Independent Auditor’s Report
Ten-Year Summary
Glossary
Index
Daimler Worldwide
Information guidance system
Refers to an illustration or a table in the Annual Report
w Refers to additional information on the Internet
E Cross-reference to additional information within the Annual Report
180
182
185
196
198
200
203
208
211
220
222
224
225
226
227
228
230
328
330
331
340
342
343
344
INTERVIEW
Ten Questions for
the CEO and CFO
Ola Källenius and Harald Wilhelm
on the 2019 finanicial year and Daimler’s
sustainable business strategy
“2019 was a challenging
year in many ways.
But it was also a year in
which we set our course
for a sustainable future.”
Ola Källenius
Chairman of the Board of Management (CEO),
Chairman of the Board of Management
of Mercedes-Benz AG
(on the right)
Harald Wilhelm
Finance & Controlling (CFO),
Daimler Mobility
(on the left)
INTERVIEW
A | TO OUR SHAREHOLDERS | INTERVIEW 27
28 A | TO OUR SHAREHOLDERS | INTERVIEW
How would you summarize the 2019 financial year?
Ola Källenius: Last year shows us that the transforma-
tion is in full swing at Daimler. We have set the course
for the decade – and taken the first important steps.
Overall, 2019 was marked by material adjustments and
a stable core business. We were able to maintain the
Group’s unit sales at the strong prior-year level. But
2019 was challenging for Daimler in financial terms.
Harald Wilhelm: We cannot be satisfied with the devel-
opment of EBIT and free cash flow in the past year, even
though they include a number of special items. The
transformation that the Group and the entire automo-
tive industry are going through is also reflected in our
figures. The transition to CO2-neutral mobility involves
high investments and initially higher product costs. But
the changes ahead of us also open up many opportu-
nities, and we intend to make the most of them. We
have clearly defined a roadmap to ensure the required
financial strength.
What were your highlights last year?
Ola Källenius: For me, first of all the products. At
Mercedes-Benz, we set standards with new compact
cars and SUVs. In addition, the market launch of the
EQC, the launch of numerous new plug-in hybrids and
our presence at the Frankfurt Motor Show: Our way
forward is sustainable modern luxury. We also made
progress with the electrification of our trucks, vans and
buses. The latest example of that is the start of series
production of the eSprinter. Electrification is a key
element of our sustainable business strategy, which we
formulated in 2019. It promises sustainable action in a
wide range of areas – from CO2 reductions and compli-
ance with environmental regulations to data protection
and respect for human rights.
Harald Wilhelm: In addition to these business
highlights, it was above all exciting to get to know the
company after I started at Daimler last year. I gained a
positive impression: We not only have strong products,
we also have a very committed team. That’s why I’m
convinced that we will achieve what we have set out
to do.
What does that mean for Mercedes-Benz in terms
of climate protection?
Ola Källenius: We have defined those goals under the
heading of “Ambition 2039.” In ten years’ time, we aim
to achieve more than half of our car unit sales with
plug-in hybrids or all-electric vehicles. By 2039, our
new car fleet is to be CO2-neutral. In the coming years,
the focus will be on battery electric drive. But it’s not
possible today to predict with certainty the technology
that will best serve the customer needs of tomorrow
and the day after. We therefore remain open for all
types of drive systems. Our production is also gradually
A | TO OUR SHAREHOLDERS | INTERVIEW 29
becoming CO2-neutral. Our holistic approach also
includes the recycling of raw materials, so we are
evolving from the value chain and towards a value
cycle. In addition, we are promoting sustainability
among our business partners and suppliers,
for example through new contract-award criteria.
Commercial vehicles constitute an important
part of Daimler’s business. What does our path
to sustainable transportation look like?
Ola Källenius: We are already a pioneer for electric
mobility with our trucks, vans and buses. In less than
two years, we will have battery-electric modes in our
portfolio in all our core regions. They will be followed
by series-produced vehicles with hydrogen drive by
the end of the 2020s. And by 2039, we intend to offer
CO2-neutral new vehicles in all segments in our major
markets. Our goal is CO2-neutral transportation by
2050. But even in many years’ time, electric trucks
and buses will still cost more than diesel models.
A supportive framework is needed to make electric
mobility more lucrative also for commercial customers.
Looking ahead, what are the biggest challenges
for Daimler?
Ola Källenius: In the medium to long term, we anti-
cipate a positive growth trend in the automotive
markets. At the same time, we experience high volatil-
ity in the geopolitical and macro-political environment
on a daily basis. So we have to be able to react quickly
and in the best possible way. But we are in a good
position to help shape a lot of these developments. We
have worked out a systematic product plan to comply
with CO2 regulations in Europe. For future technologies
and business models, the customer requirement will
remain a core aspect. And we have introduced mea-
sures to safeguard our profitability during the transition
to climate-neutral mobility.
How exactly is efficiency to be increased
at Daimler?
Harald Wilhelm: Our cost structure has to be im-
proved sustainably. That’s why everything is being
put to the test. We want to reduce material costs
significantly. Personnel costs are to be reduced by
1.4 billion euros by 2022. And we are also going to
make savings in administrative costs. At the same
time, we are systematically prioritizing our invest-
ments. In the longer term, for example, we are
reducing the complexity of our vehicle architectures,
reviewing our product portfolio and focusing on the
most profitable technologies. The key factor here is
speed. We want to achieve tangible effects as soon
as possible.
30 A | TO OUR SHAREHOLDERS | INTERVIEW
A | TO OUR SHAREHOLDERS | INTERVIEW 31
What does the future of mobility look like for
Daimler?
Ola Källenius: Our business model will be based on
vehicles that enable individual mobility in a sustainable
way. Making one’s own Mercedes even more attractive
with a whole range of services. Digitization and con-
nectivity will open up many opportunities for us. China
is a key seismograph for new trends also in this area.
Harald Wilhelm: We are making customers’ access
to our vehicles even easier and more convenient, from
digital purchasing to flexible use, offering mobility
“from years to minutes” for example. Our mobility
services are one component of all this. In this area, we
joined forces with BMW last year. Now it’s a matter of
continuing our growth and making our business sus-
tainably profitable, and we will prioritize our resources
for this purpose.
And what do the next steps for autonomous driving
look like?
Ola Källenius: It’s important to deliver applications
that are attractive for our customers and profitable for
us. With cars, the focus is initially on automated driving
for certain distances on highways. We are therefore
joining forces with partners, which will enable us to
share costs and accelerate innovation. With fully auto-
mated driving, we see the most promising applications
first for trucks – to be followed by cars.
Which attitude is needed to implement all of these
targets successfully?
Ola Källenius: We need courage and determination,
openness and enthusiasm. All our colleagues are
involved in determining how we work together. We have
significantly developed our corporate culture in recent
years, and we want to build on that.
What plans do you have for the coming years?
Harald Wilhelm: To justify the trust that our share-
holders place in us. We will do everything in our power
to deliver what we have promised: high financial
strength through sustainable efficiency.
Ola Källenius: There are many good reasons to look
ahead with confidence. Demand for mobility is increas-
ing. We will continue utilizing this growth potential. We
have everything it takes – strong brands and products,
the best minds and the right strategy.
BOARD OF MANAGEMENT
Hubertus Troska | 59
Greater China,
appointed until December 2025
Wilfried Porth | 61
Human Resources and Director
of Labor Relations,
Mercedes-Benz Vans,
appointed until April 2022
Britta Seeger | 50
Mercedes-Benz Cars Marketing
and Sales,
appointed until December 2024
Martin Daum | 60
Daimler Trucks & Buses,
Chairman of the Board of
Management of Daimler Truck AG,
appointed until February 2022
We aim to achieve
CO2-neutral, flexible and digitized
production at all our plants.
BOARD OF MANAGEMENT
Renata Jungo Brüngger | 58
Integrity and Legal Affairs,
appointed until December 2023
Ola Källenius | 50
Chairman of the Board of Manage-
ment, Chairman of the Board of
Management of Mercedes-Benz AG,
appointed until May 2024
Harald Wilhelm | 53
Finance & Controlling,
Daimler Mobility,
appointed until March 2022
Markus Schäfer | 54
Group Research &
Mercedes-Benz Cars Development,
appointed until May 2024
Factory 56 is one of the world’s most advanced automobile production facilities. The
new assembly hall at the Mercedes-Benz plant in Sindelfingen uses energy from renewable
sources and was planned to be CO2-neutral right from the start. This car factory of the
future applies innovative technologies and processes in the production of our vehicles and
creates a modern working environment that takes individual needs into account.
34 A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD
Report of the Supervisory Board
Dear Shareholders, Mobility and the automotive industry are changing fundamentally. The three
main technological areas of activity – electrification, automation and connectivity – are accompa-
nied by new mobility services, regulations for decarbonization and traffic reduction, and global
trade conflicts. Daimler aims to shape this transformation in a sustainable manner and to assume
social, economic and environmental responsibility. With a consistent commitment to CO2-neutral
mobility, the company is setting the course for a successful future.
Supervisory and advisory activities of the Supervisory
Board
The Supervisory Board of Daimler AG fully performed its tasks
as defined by the law, the Company’s Articles of Incorporation
and its own rules of procedure once again in the year 2019.
The Supervisory Board continually advised and supervised the
Board of Management in the management of the Company and
provided support with strategically important issues relating to
the Group’s further development.
The Supervisory Board examined whether the annual company
and consolidated financial statements, the combined manage-
ment report and other financial reporting, as well as the non-
financial report for Daimler AG and the Daimler Group, were in
conformance with the applicable requirements.
In addition, it approved numerous business matters for which its
consent was required following careful reviews and consulta-
tions. As well as the finance and investment planning, this also
included cooperation plans, major equity measures at compa-
nies of the Group, associated companies and joint ventures,
and the conclusion of contracts with particular importance for
the Group. The Board of Management informed the Supervi-
sory Board about a large number of further measures and busi-
ness transactions, and discussed them with it intensively and
in detail, such as the measures for implementation of the new,
sustainable business strategy including “Ambition 2039,” in
which the Group expresses its commitment to CO2-neutral
mobility. Finally, the Board of Management regularly reported
to the Supervisory Board on the current status of implementa-
tion of “Project Future” for the further development of the cor-
porate structure at Daimler.
The Board of Management regularly informed the Supervisory
Board about all significant economic developments of the
Group and the divisions. It continually provided information to
it on all fundamental questions of corporate planning, including
finance, investment, sales and personnel planning, current
developments at the companies of the Group, the development
of revenue, the situation of the Company and the divisions, and
the economic and political environment, as well as on the cur-
rent status and assessment of significant legal proceedings.
Furthermore, the Board of Management reported to the Super-
visory Board continually on return on equity and the Group’s
liquidity situation, the development of sales and procurement
markets, the overall economic situation, and developments in
the capital markets and the area of financial services. Addi-
tional topics included the further development of the product
portfolio, securing the Group’s long-term competitiveness, and
the ongoing implementation of measures for safeguarding sus-
tainable and future-oriented mobility. The Supervisory Board
also dealt in detail with the shareholder structure, the develop-
ment of the share price and the related background, and the
expected impact of strategic projects on the share price.
Working culture and areas of Supervisory Board activity
In the year 2019, the Supervisory Board convened for eight
meetings. Participation in the meetings by the members of the
Supervisory Board was at a high level once again. During the
year under review, all members of the Supervisory Board par-
ticipated in significantly more than half of the meetings of the
Supervisory Board and of its committees of which they are
members. The work of the Supervisory Board featured open
and intensive exchanges of information and opinions. The
members of the Supervisory Board regularly prepared for
upcoming resolutions with the aid of documentation provided
in advance by the Board of Management. Furthermore, the
members representing the employees and the members repre-
senting the shareholders regularly prepared the Supervisory
Board meetings in separate discussions, which were also
attended by members of the Board of Management. The Super-
visory Board was also intensively supported by its committees.
In the meetings of the Supervisory Board, its members dis-
cussed the measures and business matters to be decided upon
in detail with the Board of Management. Executive sessions
were regularly arranged for the meetings so that topics could
be discussed also in the absence of the Board of Management.
Outside the regular meetings, the Supervisory Board was
informed about special events. In addition, the members of the
Supervisory Board and of the Board of Management came
together for bilateral exchanges of opinions. The Board of Man-
A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD 35
Dr. Manfred Bischoff, Chairman of the Supervisory Board
agement informed the Supervisory Board also with written
reports about the most important indicators of business devel-
opment and existing risks.
The members of the Supervisory Board independently attend
such courses of training and further training regarded as neces-
sary for the performance of their tasks, relating for example to
changes in the legal framework and new, future-oriented tech-
nologies, in which they are supported by the Company. In a
special onboarding program, new members of the Supervisory
Board have the opportunity to meet the members of the Board
of Management and senior executives with specialist responsi-
bility for a bilateral exchange of opinions and information on
fundamental and current topics of the various Board of Man-
agement areas, allowing them to gain an overview of the topics
relevant to the Daimler Group and of its governance structure.
Board decided to reappoint Britta Seeger as a member of the
Board of Management of Daimler AG with responsibility for
“Mercedes-Benz Cars Marketing and Sales for a further five
years as of January 1, 2020. Subsequently, it dealt with the
annual company financial statements, the annual consolidated
financial statements and the combined management report for
Daimler AG and the Daimler Group for the year 2018, each of
which had been issued with an unqualified audit opinion by the
external auditors, as well as with the reports of the Audit Com-
mittee and the Supervisory Board, the declaration on corporate
governance combined with the corporate governance report,
the remuneration report, the nonfinancial report, which was
issued with the independent auditor’s limited assurance in
accordance with ISAE 3000, and the proposal on the appropri-
ation of profit. In preparation, the members of the Supervisory
Board had been provided with comprehensive documentation.
In its meeting on February 5, 2019, which was attended by the
external auditors, the Supervisory Board discussed, took note
of and approved the preliminary key figures of the annual com-
pany and consolidated financial statements for 2018 and the
dividend proposal to be made at the 2019 Annual Sharehold-
ers’ Meeting. The Supervisory Board determined that no objec-
tions were to be raised to their publication. The preliminary key
figures for the year 2018 and the proposal on the appropriation
of profit were announced at the Annual Press Conference on
February 6, 2019.
In the Supervisory Board meeting held on February 13, 2019,
the Supervisory Board decided to appoint Harald Wilhelm as a
member of the Board of Management of Daimler AG for a
period of three years as of April 1, 2019. Bodo Uebber stepped
down from the Board of Management of Daimler AG with effect
as of the end of the 2019 Annual Shareholders’ Meeting. At
that time, Harald Wilhelm took over Board of Management
responsibility for “Finance & Controlling/Daimler Financial
Services,” which is now called “Finance & Controlling/Daimler
Mobility” in line with the renaming of “Daimler Financial Ser-
vices” as “Daimler Mobility.” Furthermore, the Supervisory
The Audit Committee and the Supervisory Board dealt with
those documents in detail and discussed them intensively in
the presence of the independent auditors. The independent
auditors reported on the results of their audit and on the key
audit matters and the respective audit procedure including the
conclusions drawn, as well as on the voluntary review of the
non-financial report within the framework of a limited assurance
engagement, and were available to answer questions and to
provide further information. Following the final results of the
review by the Audit Committee and its own review, the Super-
visory Board declared its agreement with the results of the
audit carried out by the external auditors. It determined that
no objections were to be raised, approved the financial state-
ments and the combined management report as presented
by the Board of Management, and thus adopted the financial
statements of Daimler AG for the year 2018. On this basis,
the Supervisory Board consented to the proposal made by the
Board of Management on the appropriation of distributable
profit. In addition, the Supervisory Board approved the non-
financial report, the report of the Supervisory Board, the cor-
porate government statement combined with the corporate
governance report, and the remuneration report.
36 A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD
Also in its meeting on February 13, 2019, the Supervisory
Board discussed the results of the efficiency review carried out
in 2018, which once again confirm the professional, very good
and very trusting cooperation within the Supervisory Board
and with the Board of Management. There was no fundamental
need for change, but individual suggestions were made and
implemented. The Supervisory Board also dealt with matters
pertaining to the remuneration of the members of the Board of
Management and, in connection with the item of the agenda
on corporate governance, approved the memberships of other
boards and further external secondary activities of the mem-
bers of the Board of Management that were presented in the
meeting. In addition, the Supervisory Board discussed the sta-
tus of the spin-off documentation required to strengthen the
divisional structure by forming legally independent entities in
the context of “Project Future.” Finally, the Supervisory Board
received detailed reports on current legal issues, among other
things with regard to the antitrust proceedings of the European
Commission against three German car manufacturers con-
cerning possible restrictions of competition with exhaust-gas
cleaning technologies, as well as with regard to requests for
information, inquiries, investigations, administrative orders and
proceedings relating to diesel exhaust emissions.
In its meeting on March 22, 2019, the Supervisory Board
approved a number of measures for which its consent was
required. These included in particular a cooperation project
between Zhejiang Geely Holding Group (Geely Holding) and
Daimler to further develop smart as a leading brand for electric
mobility, as well as the acquisition of a majority interest in the
US company Torc Robotics, a pioneer in the field of autonomous
driving. Furthermore, the Supervisory Board again dealt in detail
with the spin-off documentation for “Project Future” that was to
be submitted to the Annual Shareholders’ Meeting and was
informed about the further development of the Group-wide code
of conduct in the context of an integrity update. Finally, the
Supervisory Board approved its proposed resolutions on the
items of the agenda for the 2019 Annual Shareholders’ Meeting.
The Supervisory Board convened for another meeting in late
April 2019. One focus of this meeting was dealing with the sus-
tainable business strategy, in particular “Ambition 2039”,
which was presented by the Board of Management. The Super-
visory Board was also informed about the status of the HERE
cooperation and the battery-cell strategy. Finally, the Supervi-
sory Board also dealt with current legal issues and with compli-
ance measures in this context, especially relating to the
requests for information, inquiries, investigations, administra-
tive orders and proceedings relating to diesel exhaust emis-
sions. In addition, the Supervisory Board was informed about
the statement of objections from the European Commission
concerning possible restrictions of competition with exhaust-
gas cleaning technologies and the results of the ongoing inves-
tigation of this case by an independent law firm. It also dealt
with the question of whether, in connection with the concluded
antitrust investigations of truck manufacturers by the Euro-
pean Commission, claims for compensation were to be made
against former or current members of the Board of Manage-
ment. On the basis of the reviews carried out so far and repeat-
edly updated by an independent law firm, a further review by
an independent legal academic, as well as detailed discussions
in the Supervisory Board taking into account the welfare of the
Company, the Supervisory Board maintained its previous reso-
lution, based on the information available, that no such claims
were to be made at the present time.
At the Annual Shareholders’ Meeting held on May 22, 2019,
the candidates proposed by the Supervisory Board, Joe Kaeser
and Dr. Bernd Pischetsrieder, were reelected as members of
the Supervisory Board representing the shareholders. In the
Supervisory Board meeting held straight after the Annual Share-
holders’ Meeting, the members of the Supervisory Board rep-
resenting the shareholders reelected Joe Kaeser as a member
of the Audit Committee. Furthermore, the Supervisory Board
decided to have a voluntary review conducted of the contents
of the 2019 non-financial report by KPMG AG Wirtschaftsprü-
fungsgesellschaft, Berlin, within the framework of a limited
assurance engagement.
In a meeting in late July 2019, the Supervisory Board approved
a series of capital measures at Group companies and resolved
to amend its rules of procedure for the start of the new corpo-
rate structure at the beginning of November 2019. In addition,
the Supervisory Board discussed in detail with the Board of
Management the course of business and the results of the first
half of the year, in which there had been two adjustments of
the earnings guidance for the full year. The Supervisory Board
also received detailed reports on current legal issues, includ-
ing requests for information, inquiries, investigations, adminis-
trative orders and proceedings relating to diesel exhaust emis-
sions, including the proceedings of the Stuttgart District
Attorney's Office. Against the backdrop of the complexity of
the emissions- and antitrust related proceedings and with
regard to the efficient organization of the Supervisory Board’s
work, the Supervisory Board resolved to establish a Supervi-
sory Board Committee for Legal Affairs until further notice.
This committee coordinates the exercise of the rights and
duties of the Supervisory Board with regard to the aforemen-
tioned legal issues, prepares the resolutions of the Supervisory
Board and makes appropriate recommendations for resolu-
tions. The committee consists of six members elected by the
members of the Supervisory Board by a majority of the votes
cast and is composed on a parity basis. The members of the
committee elect a committee chairman and a deputy commit-
tee chairman from among their number. The chairman of the
committee is Dr. Clemens Börsig and its deputy chairman is
Michael Brecht. Other members of the committee are Dr. Man-
fred Bischoff and Marie Wieck as shareholder representatives
and Michael Häberle and Sibylle Wankel as employee represen-
tatives.
In a subsequent joint meeting of the Supervisory Board and
the Advisory Board for Integrity and Corporate Responsibility,
the participants discussed the integration of sustainability
and integrity into Daimler Group strategy and the day-to-day
business.
Strategy meeting of the Supervisory Board
On the first day of the two-day strategy workshop in Sindelfin-
gen at the end of September, after careful and intensive dis-
cussion of the relevant aspects and considering the relevant
reasons and taking into account the best interests of the Com-
pany, and after receiving a positive recommendation for a reso-
lution from the Supervisory Board Committee for Legal Affairs,
the Supervisory Board approved the decision of the Board of
Management not to appeal against the fine imposed by the
Stuttgart District Attorney’s Office on September 24, 2019 for
negligent violation of supervisory duties during vehicle certifi-
cation in connection with deviations from regulatory require-
ments for certain Mercedes-Benz vehicles. In preparing its
decision, the Supervisory Board had obtained an expert opin-
A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD 37
ion from an independent law firm. Both the Supervisory Board
and the Management Board are of the opinion that the conclu-
sion of the fine proceedings was in the interest of the Com-
pany. In this meeting, the Supervisory Board also approved a
capital contribution at the Chinese joint-venture company Bei-
jing Benz Automotive Co, Ltd. for the realization of two vehicle
projects.
Details of the system of Board of Management remuneration
and changes to the annual bonus are presented in the remu-
neration report on E pages 108 ff of this Annual Report.
Corporate governance and declaration of compliance
During the year 2019, the Supervisory Board was continually
occupied with standards of good corporate governance.
The focus of the strategy workshop was on the strategies for
the period until 2030 of Mercedes-Benz AG, Daimler Truck AG
and Daimler Mobility AG, and in particular on the “Move Pro-
grams” as a holistic approach for the required transformation,
and on the “Move Performance Programs” for the improve-
ment of cost structures. The Supervisory Board discussed in
detail the goals and the strategic areas for action of the indi-
vidual divisions. The Supervisory Board dealt with the electrifi-
cation of vehicle fleets, the further development of fuel-cell
technology and autonomous driving. Various vehicle exhibits
were also presented. With the involvement of the executives
responsible for the topics presented, the members of the
Supervisory Board and the Board of Management discussed in
a constructive and open dialog how Daimler will prepare for
new challenges and which further developments lie ahead. The
changing competitive environment was also discussed. The
Supervisory Board also discussed the key financial figures and
the targets for the Group and the divisions.
Meeting on operational planning 2020/2021
In the meeting held on December 12, 2019, the Supervisory
Board discussed business activities in China, in particular the
political and economic aspects of expanding the Group’s pres-
ence in China and the significant Chinese investments in our
Company. It also dealt with the report of the Board of Manage-
ment on the development of current acquisitions and coopera-
tions. During the further course of the meeting, on the basis of
comprehensive documentation, the Supervisory Board dis-
cussed and approved the operational planning for the years
2020 and 2021, and in this context discussed existing opportu-
nities and risks.
Furthermore, the Supervisory Board was informed about cur-
rent legal issues, also with regard to the requests for informa-
tion, inquiries, investigations, administrative orders and pro-
ceedings relating to diesel exhaust emissions. Once again, it
also dealt with the question of whether any claims for compen-
sation were to be made against former or present members of
the Board of Management in connection with the concluded
antitrust proceedings against truck manufacturers by the Euro-
pean Commission. In addition, the Supervisory Board dealt
with the results of the ongoing investigations in connection
with the European Commission’s antitrust proceedings con-
cerning possible restrictions of competition with exhaust-gas
cleaning technologies. The Supervisory Board decided to dis-
cuss the further procedure on the antitrust matters again in
February 2020, with due consideration of further developments.
Other subjects discussed at the meeting were matters of cor-
porate governance, in particular the declaration of compliance
with the German Corporate Governance Code, and the fulfill-
ment of the qualification profiles for the Board of Management
and the Supervisory Board. Furthermore, the Supervisory
Board looked ahead to the main topics for the 2020 financial
year. Finally, it dealt in this meeting with the further develop-
ment of the Board of Management remuneration system, on
the basis of preparations by the Presidential Committee.
In September 2019, the Supervisory Board resolved to update
the declaration of compliance with the German Corporate Gov-
ernance Code due to one of its members taking on another
supervisory board position at Mercedes-Benz AG and the
resulting exceeding of the maximum number of three supervi-
sory board positions recommended by the Code for members
of the boards of management of listed companies. For the pur-
pose of regulating its rules of procedure, which reflect the
Code’s recommendation regarding the maximum number of
supervisory positions held by members of the boards of man-
agement of listed companies, the Supervisory Board has
decided, until further notice, not to consider dual positions of
members of the Supervisory Board of Daimler AG in other
supervisory boards within the Daimler Group. In its meeting in
December 2019, the Supervisory Board approved the 2019
declaration of compliance with the German Corporate Gover-
nance Code pursuant to Section 161 of the German Stock Cor-
poration Act (AktG). With the exceptions explained there, all
recommendations of the Code have been and continue to be
complied with.
In accordance with good corporate governance, the members
of the Supervisory Board of Daimler AG are obliged to disclose
conflicts of interest – especially those that might arise due to
an advisory or board function for a customer, supplier or credi-
tor of Daimler, or for other third parties – to the entire Super-
visory Board.
There were no indications of any actual conflicts of interest in
the year 2019. In order to avoid individual potential conflicts of
interest, some members of the Supervisory Board did not par-
ticipate in discussions of certain items of the agendas in the
year 2019. Dr. Bernd Pischetsrieder and Dr. Jürgen Hambrecht
left the room during several meetings for the legal status
reports, in particular when legal proceedings in connection
with diesel exhaust emissions were discussed. As a result, in
compliance with the goals of the Supervisory Board, there
were no potential conflicts of interest during the year under
review for at least half of the members representing the share-
holders and for at least 15 members of the entire Supervisory
Board.
Law for the equal participation of women and men in man-
agement positions
For supervisory boards of listed companies subject to parity
codetermination, like that of Daimler AG, the German Stock
Corporation Act prescribes a binding gender ratio of at least
30% women. The ratio is to apply to the entire supervisory
board. If the side of the supervisory board representing the
shareholders or the side representing the employees objects
to the chairman of the supervisory board before the election
about the application of the ratio to the entire supervisory
board, the minimum ratio is to apply separately to the share-
holders’ side and to the employees’ side for that election.
38 A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD
As of December 31, 2019, the shareholders’ side of the Super-
visory Board of Daimler AG is composed of 30% women (the
members Sari Baldauf, Petraea Heynike and Marie Wieck) and
70% men. On the employees’ side, the proportions as of that
date are 30% women (the members Elke Tönjes-Werner, Sibylle
Wankel and Dr. Sabine Zimmer) and 70% men. The Supervisory
Board as a whole therefore also fulfills the statutory quota.
In its meeting on February 19, 2020, the Supervisory Board dis-
cussed the specific proposals for the candidate to be elected
at the 2019 Annual Shareholders’ Meeting and decided, upon
the recommendation of the Nomination Committee, to propose
at the 2020 Annual Shareholders’ Meeting that, Timotheus
Höttges, Chairman of the Board of Management of Deutsche
Telekom AG, be elected to the Supervisory Board. If the pro-
posed candidate is elected, the statutory quota for women will
remain fulfilled both on the shareholder side and for the Super-
visory Board as a whole, provided there are no other changes.
For the composition of the Board of Management, the Supervi-
sory Board set the target in December 2016 of at least 12.5%
women, which is applicable until December 31, 2020. As of
December 31, 2019, two women are members of the Board of
Management: Renata Jungo Brüngger and Britta Seeger; the
proportion of women is therefore 25% as of that date.
Corporate governance at Daimler is described in detail in the
declaration on corporate governance combined with the corpo-
rate governance report on E pages 185 ff and in the remu-
neration report on E pages 108 ff of this Annual Report.
The work of the committees
The Presidential Committee convened in the past financial
year for eight meetings, which were partially held in the form
of conference calls. It dealt in particular with personnel mat-
ters and succession planning for the composition of the Board
of Management. In addition, the Presidential Committee dealt
with the acceptance by members of the Board of Management
of board positions at other companies and institutions, with
corporate governance topics and with matters of remunera-
tion. Details of the remuneration of the Board of Management
are presented in the remuneration report on E pages 108 ff
The Audit Committee met six times in 2019. Details of those
meetings are provided in a separate report of that committee
on E pages 182 ff
The Committee for Legal Affairs held five meetings in 2019,
including its inaugural meeting. At these meetings, it received
detailed information on legal matters concerning emissions
and antitrust law, as well as the related further development of
the compliance system, and discussed those matters in the
presence of the Supervisory Board’s legal advisors. The Com-
mittee regularly reports to the Supervisory Board on its work
and in two cases, after discussing and considering the relevant
aspects and taking into account the best interests of the Com-
pany, made recommendations to the Supervisory Board for
resolutions. This concerned, on the one hand, the resolution of
the Supervisory Board of September 24, 2019 to approve the
decision of the Board of Management not to appeal against the
fine imposed by the Stuttgart District Attorney’s Office. On the
other hand, it concerned the resolution of the Supervisory
Board of December 12, 2019 regarding legal matters relating to
antitrust law.
The Nomination Committee convened for one meeting in
2019. The Committee dealt in particular with the recommenda-
tion for the Supervisory Board’s proposal to be made at the
Annual Shareholders’ Meeting in 2020 on the candidate for
election to the Supervisory Board. Among other things, and
taking into consideration all circumstances of each individual
case, the proposal is oriented towards the Daimler Group’s
interests and aims to fulfill the overall qualification profile for
the entire Supervisory Board, including expertise profile and
diversity concept.
There was no occasion to convene the Mediation Committee
during the reporting period.
Changes in the Supervisory Board and the Board of
Management
Following the proposal of the Supervisory Board, the Annual
Shareholders’ Meeting on May 22, 2019 reelected Joe Kaeser
und Dr. Bernd Pischetsrieder as members of the Supervisory
Board representing the shareholders for the period until the
end of the Annual Shareholders’ Meeting that decides on ratifi-
cation of board members’ actions for financial year 2023.
In the Supervisory Board meeting on February 13, 2019, Harald
Wilhelm was appointed to the Board of Management of Daimler
AG for a period of 3 years with effect as of April 1, 2019. Bodo
Uebber resigned from the Board of Management of Daimler AG
with effect as of the end of the Annual Meeting 2019. At the
same time, Harald Wilhelm took over the responsibility for
“Finance & Controlling/Daimler Financial Services,” which is
now called “Finance & Controlling/Daimler Mobility.” Further-
more, Britta Seeger was reappointed to the Board of Manage-
ment of Daimler AG as the member responsible for “Mercedes-
Benz Cars Marketing and Sales” for a further five years
effective as of January 1, 2020.
In accordance with the resolution of the Supervisory Board of
September 2018, Ola Källenius was reappointed as the Chair-
man of the Board of Management, responsible for Mercedes-
Benz Cars, for a new period of office of five years starting at
the end of the Annual Shareholders’ Meeting on May 22, 2019,
after Dr. Dieter Zetsche had resigned as a member of the
Board of Management of Daimler AG and Head of Mercedes-
Benz Cars in consultation with the Supervisory Board effective
at the same time. Also by resolution of the Supervisory Board
of September 2018, Markus Schäfer was appointed as succes-
sor to Ola Källenius as a member of the Board of Management
of Daimler AG with responsibility for “Group Research and
Mercedes-Benz Cars Development” starting at the end of the
Annual Shareholders’ Meeting on May 22, 2019.
In the Supervisory Board meeting on February 19, 2020, Huber-
tus Troska was appointed as a member of the Board of Man-
agement of Daimler AG with responsibility for “Greater China”
for a period of a further five years effective as of January 1st,
2021. In addition, the members of the Supervisory Board rep-
resenting the shareholders decided, on the basis of a
recommendation by the Nomination Committee, to propose
the election to the Supervisory Board of Timotheus Höttges at
the Annual Shareholders’ Meeting in 2020.
A | TO OUR SHAREHOLDERS | REPORT OF THE SUPERVISORY BOARD 39
no objections were to be raised and approved the financial
statements and the combined management report as pre-
sented by the Board of Management. The company financial
statements of Daimler AG for the year 2019 were thereby
adopted. On this basis, the Supervisory Board consented to
the proposal made by the Board of Management on the appro-
priation of distributable profit. Furthermore, the Supervisory
Board approved the non-financial report and the report of the
Supervisory Board, the declaration on corporate governance
combined with the corporate governance report, and the remu-
neration report, as well as its proposed resolutions on the
items of the agenda for the 2020 Annual Shareholders’ Meeting.
Appreciation
The Supervisory Board thanks all the employees and the man-
agement of the Daimler Group for their committed contribu-
tions in the challenging environment of the year 2019.
The Supervisory Board also thanks Dr. Dieter Zetsche and
Bodo Uebber for their committed work in the Company’s Board
of Management.
Stuttgart, February 2020
The Supervisory Board
Dr. Manfred Bischoff
Chairman
Audit of the company and consolidated financial
statements
The financial statements of Daimler AG and the combined man-
agement report for the Company and the Group for 2019 were
duly audited by KPMG AG, Wirtschaftsprüfungsgesellschaft,
Berlin, and were given an unqualified audit opinion. The same
applies to the consolidated financial statements for 2019 pre-
pared according to IFRS. On the basis of a voluntary review of
the contents of the non-financial report decided upon by the
Supervisory Board, the non-financial report for financial year
2019 was reviewed by KPMG AG Wirtschaftsprüfungsgesell-
schaft, Berlin, within the framework of a limited assurance
engagement and was issued with a limited assurance in accor-
dance with ISAE 3000.
In a meeting held on February 10, 2020 attended by the exter-
nal auditors, the Supervisory Board discussed, took note of
and approved the preliminary key figures of the annual com-
pany and consolidated financial statements for 2019 and the
proposal on the appropriation of profit to be made at the 2020
Annual Shareholders’ Meeting. The Supervisory Board deter-
mined that no objections were to be made to their publication.
The preliminary key figures for the year 2019 as well as the
proposal on the appropriation of profit were announced at the
Annual Press Conference on February 11, 2020.
In the meeting held on February 19, 2020, the Supervisory
Board dealt with the annual company financial statements, the
annual consolidated financial statements and the combined
management report for Daimler AG and the Daimler Group,
each of which had been issued with an unqualified audit opin-
ion by the independent auditors, as well as with the reports of
the Audit Committee and the Supervisory Board, the corporate
government statement combined with the corporate gover-
nance report, the remuneration report, the non-financial report
issued with a limited assurance in accordance with ISAE 3000,
and the proposal on the appropriation of profit. In preparation,
the members of the Supervisory Board had been provided with
comprehensive documentation including the Annual Report
with the consolidated financial statements according to IFRS,
the combined management report for Daimler AG and the
Daimler Group, the declaration on corporate governance com-
bined with the corporate governance report, the remuneration
report, the non-financial report, the annual company financial
statements of Daimler AG, the proposal of the Board of Man-
agement on the appropriation of profit, the audit reports of
KPMG AG Wirtschaftsprüfungsgesellschaft on the annual com-
pany financial statements of Daimler AG and the consolidated
financial statements, each including the combined manage-
ment report, and the internal control system, as well as drafts
of the reports of the Supervisory Board and of the Audit Com-
mittee.
The Audit Committee and the Supervisory Board dealt with
those documents in detail and discussed them intensively in
the presence of the independent auditors, who reported on the
results of their audit and in particular on the key audit matters
and the respective audit procedure including the conclusions
drawn, as well as on the voluntary review of the non-financial
statement within the framework of a limited assurance engage-
ment, and who were available to answer supplementary ques-
tions and to provide additional information. Following the final
results of the review by the Audit Committee and its own
review, the Supervisory Board declared its agreement with the
results of the audit by the external auditors. It determined that
40 A | TO OUR SHAREHOLDERS | THE SUPERVISORY BOARD
The Supervisory Board
Dr. Manfred Bischoff
elected until 2021
Chairman of the Supervisory Board of Daimler AG
Other supervisory board memberships/directorships:
Mercedes-Benz AG – Chairman (since September 24, 2019)**
SMS Holding GmbH (until December 31, 2019)
Michael Brecht*
elected until 2023
Deputy Chairman of the Supervisory Board of Daimler AG;
Chairman of the General Works Council, Daimler Group;
Chairman of the General Works Council, Daimler AG;
Chairman of the Works Council, Gaggenau Plant, Daimler AG
Other supervisory board memberships/directorships:
Mercedes-Benz AG (since September 24, 2019)**
Daimler Truck AG (since September 24, 2019)**
Dr. Paul Achleitner
elected until 2020
Chairman of the Supervisory Board of Deutsche Bank AG
Other supervisory board memberships/directorships:
Deutsche Bank AG – Chairman
Bayer AG
Bader M. Al Saad
elected until 2022
Former Chairman and Managing Director of the Executive
Committee of the Board of Directors of Kuwait Investment
Authority
Other supervisory board memberships/directorships:
Daimler Truck AG (since November 1, 2019)**
Kuwait Investment Authority
Kuwait Fund for Arab Economic Development
BlackRock Inc. (since May 23, 2019)
Sari Baldauf
elected until 2023
Former Executive Vice President and General Manager of
the Networks Business Group of Nokia Corporation
Other supervisory board memberships/directorships:
Daimler Truck AG (since September 24, 2019)**
Vexve Armatury Group – Chairwoman
Nokia Oyj
Michael Bettag*
elected until 2023
Chairman of the Works Council of the Nuremberg Dealership,
Daimler AG
Dr. Clemens Börsig
elected until 2022
Former Chairman of the Supervisory Board of Deutsche Bank AG
Other supervisory board memberships/directorships:
Daimler Truck AG (since September 24, 2019)**
Linde AG (until April 8, 2019)
Linde Intermediate Holding AG (until August 7, 2019)
Linde plc
Emerson Electric Co
Raymond Curry*
elected until 2023
Secretary-Treasurer United Auto Workers (UAW)
Dr. Jürgen Hambrecht
elected until 2023
Chairman of the Supervisory Board of BASF SE
Other supervisory board memberships/directorships:
Daimler Truck AG (since September 24, 2019)**
BASF SE – Chairman
Fuchs Petrolub SE – Chairman (until May 7, 2019)
Trumpf GmbH + Co. KG – Chairman
Michael Häberle*
elected until 2023
Chairman of the Works Council, Untertürkheim Plant,
Daimler AG
Other supervisory board memberships/directorships:
Mercedes-Benz AG (since September 24, 2019)**
Petraea Heynike
elected until 2021
Former Executive Vice President of the Executive Board
of Nestlé S. A.
Other supervisory board memberships/directorships:
Mercedes-Benz AG (since September 24, 2019)**
Joe Kaeser
elected until 2024
Chairman of the Board of Management of Siemens AG
Other supervisory board memberships/directorships:
Mercedes-Benz AG (since September 24, 2019)**
Allianz Deutschland AG
NXP Semiconductors N. V.
A | TO OUR SHAREHOLDERS | THE SUPERVISORY BOARD 41
Ergun Lümali*
elected until 2023
Deputy Chairman of the General Works Council, Daimler Group;
Deputy Chairman of the General Works Council of Daimler AG;
Chairman of the Works Council, Sindelfingen Plant
Other supervisory board memberships/directorships:
Mercedes-Benz AG (since September 24, 2019)**
Daimler Truck AG (since September 24, 2019)**
Dr. Bernd Pischetsrieder
elected until 2024
Former Chairman of the Supervisory Board of Münchener
Rückversicherungs-Gesellschaft Aktiengesellschaft in Munich
Other supervisory board memberships/directorships:
Mercedes-Benz AG (since September 24, 2019)**
Münchener Rückversicherungs-Gesellschaft
Aktiengesellschaft in Munich – Chairman (until April 30, 2019)
Tetra Laval Group
Elke Tönjes-Werner*
elected until 2023
Deputy Chairwoman of the Works Council, Bremen Plant,
Daimler AG
Sibylle Wankel*
elected until 2023
General Legal Counsel of the German Metalworkers’ Union
(IG Metall)
Other supervisory board memberships/directorships:
Mercedes-Benz AG (since November 1, 2019)**
Dr. Frank Weber*
elected until 2023
Centre manager BodyTEC, Mercedes-Benz AG;
Chairman of the Management Representatives Committee,
Daimler Group
Other supervisory board memberships/directorships:
Mercedes-Benz AG (since November 1, 2019)**
Marie Wieck
elected until 2023
General Manager of IBM Blockchain (until December 31, 2019)
Other supervisory board memberships/directorships:
Mercedes-Benz AG (since November 1, 2019)**
Roman Zitzelsberger*
elected until 2023
German Metalworkers’ Union (IG Metall) District Manager
Baden-Württemberg
Other supervisory board memberships/directorships:
Daimler Truck AG (since September 24, 2019)**
ZF Friedrichshafen AG (since November 21, 2019)
MTU Friedrichshafen GmbH (until January 31, 2020)
Rolls-Royce Power Systems AG (until January 31, 2020)
Committees of the Supervisory Board:
Committee pursuant to Section 27 Subsection 3 of the
German Codetermination Act (MitbestG)
Dr. Manfred Bischoff – Chairman
Michael Brecht*
Dr. Jürgen Hambrecht
Roman Zitzelsberger*
Presidential Committee
Dr. Manfred Bischoff – Chairman
Michael Brecht*
Dr. Jürgen Hambrecht
Roman Zitzelsberger*
Audit Committee
Dr. Clemens Börsig – Chairman
Michael Brecht*
Joe Kaeser
Ergun Lümali*
Nomination Committee
Dr. Manfred Bischoff – Chairman
Dr. Paul Achleitner
Sari Baldauf
Legal Affairs Committee
Dr. Clemens Börsig – Chairman
Dr. Manfred Bischoff
Michael Brecht*
Michael Häberle*
Sibylle Wankel*
Marie Wieck
Dr. Sabine Zimmer*
elected until 2023
Manager Vocational Training Policies, Germany, Daimler AG
* Representative of the employees
**Group Mandate
HIGHLIGHTS
Mercedes-Benz’s presence at the Frankfurt Motor Show from September 10 to 22,
2019 focused on sustainable solutions for the future of mobility, which are reflected
in the products as well as in the business strategy. At the same time, Mercedes-Benz
continued to position itself as a manufacturer of luxury automobiles. The Mercedes-
Benz VISION EQS show car had its world premiere as an example of our pursuit of
HIGHLIGHTS A | HIGHLIGHTS 2019 43
sustainable luxury. The company also presented nineteen other vehicles to the
global public for the first time. An additional highlight of our presence at the
Frankfurt Motor Show was the completely revised exhibition stand, which featured
digital communication more prominently.
44 A | HIGHLIGHTS 2019
Mercedes-Benz Cars to build a battery factory in Poland
On January 22, we announce that as part of its electric offen-
sive, Mercedes-Benz Cars will build a battery factory in Jawor,
Poland, thus expanding the global battery production network
to nine factories. The battery factory in Jawor is the second
major investment at this new Mercedes-Benz site. A state-of-
the-art engine factory is already being built there to supply the
Mercedes-Benz Cars plants worldwide.
Mercedes-Benz eCitaro electrifies European transport
companies
The first battery-powered Mercedes-Benz eCitaro series-pro-
duction buses are in regular use in public transport in Berlin
and Heidelberg. Further electric buses are to follow in Ger-
many and the first orders have also been received from neigh-
boring European countries. The eCitaro is now in series
production at the Daimler Buses plant in Mannheim and is
being delivered to customers.
The first eVito from series production and the first
eSprinter is handed over to Hermes
In the context of the opening of the Hermes Logistics Center
in Hamburg, the first 20 eVito vans from series production and
the first eSprinter pilot vehicles from Mercedes-Benz Vans
are handed over to Hermes Germany. The eVito vans are to
take over delivery on the last mile in the urban environment.
The vans are also the visible part of a strategic partnership
between Mercedes-Benz Vans and Hermes Germany for the
development of technologies and services for the vehicle fleet
of the retail and logistics service provider.
BMW Group and Daimler AG invest in joint mobility-ser-
vices provider
The BMW Group and Daimler AG are combining their mobility
services in the YOUR NOW joint ventures with the goal of
creating a new global player that will introduce sustainable
urban mobility consistently for the benefit of customers. The
two groups are investing more than €1 billion to further expand
and intermesh their existing services in the areas of ride
hailing, multimodal platforms, car sharing, parking and
charging. The mobility services have been consolidated into
three pillars since January 1, 2020: FREE NOW & REACH NOW,
SHARE NOW, PARK NOW & CHARGE NOW.
Daimler and Geely Holding establish global joint venture
to further develop smart
Daimler AG and Zhejiang Geely Holding Group announce that
they are establishing a global 50:50 joint venture. The objec-
tive is to further develop smart, a pioneer of urban mobility,
into a leading brand for electric mobility. According to the
joint-venture agreement, the next generation of electric smart
models will be produced in a new, specially built electric-car
factory in China. Global sales are scheduled to begin in 2022.
Daimler Trucks strengthens its technology leadership for
automated driving
Daimler Trucks and Torc Robotics, a pioneer in the field of
autonomous driving, enter into a partnership to market highly
automated trucks (SAE Level 4) in the United States. The
companies agree that Daimler Trucks will acquire a majority
stake in Torc Robotics. Torc is one of the world’s most ex -
perienced companies in the field of automated vehicles.
Torc offers advanced, road-going technology and years of
experience with heavy-duty commercial vehicles.
Q1
A | HIGHLIGHTS 2019 45
Mercedes-Benz EQC (combined electricity consumption: 20.8 – 19.7 kWh/100 km; combined CO2 emissions: 0 g/km)1
Daimler shareholders vote in favor of new Group structure
At the Annual Meeting in Berlin on May 22, 2019, the share-
holders of Daimler AG vote by a large majority in favor of
restructuring the Daimler Group. This prepares the way for the
Group to transfer the car and van business as well as the truck
and bus business to two legally independent entities by means
of a spin-off. The new structure, which is to take effect on
November 1, will give the company more scope for action in
a dynamically growing competitive environment.
Mercedes-Benz Cars opens car plant in Russia
Mercedes-Benz Cars starts production at the new Moscovia
car plant with the Mercedes-Benz E-Class sedan for the local
market. The E-Class will be followed by SUV models. The
Mercedes-Benz Moscovia plant features flexible and sustain-
able production and applies modern industry 4.0 technologies.
First Mercedes-Benz model of the EQ brand
The EQC, the first Mercedes-Benz vehicle of the EQ product
and technology brand (combined electricity consumption:
20.8 – 19.7 kWh/100 km; combined CO2 emissions: 0 g/km)1,
is on the road in mid-2019. With its seamless, clear design and
brand-typical color accents, it is a pioneer of avantgarde
electrical aesthetics. In terms of quality, safety and comfort,
the EQC is the Mercedes-Benz among electric vehicles and is
convincing in the sum of its features.
Lab 1886 at Europe’s biggest digital conference
Lab1886, the innovation hub of Daimler AG, is again the main
partner of re:publica 19. With an audience of approximately
20,000 visitors in Berlin, Daimler presents forward-looking
projects, creates knowledge transfer and presents itself as a
potential employer to international talents from the digital
scene.
Ambition 2039: Daimler puts sustainable business strat-
egy into concrete form
Daimler is pressing ahead with the transformation to emission-
free mobility. Sustainability is a key element of Daimler’s corpo-
rate strategy and at the same time a benchmark for corporate
success. By 2039, the new-car fleet of Mercedes-Benz Cars is
to become CO2-neutral and the company aims to achieve more
than 50% of its car sales with plug-in hybrids or all-electric
vehicles. Production operations at all European Mercedes-Benz
car plants are expected to be CO2-neutral as soon as 2022.
Daimler AG and BMW Group join forces for automated
driving
Daimler and the BMW Group start their cooperation in the field
of automated driving. The two companies have signed an
agreement on long-term strategic cooperation in this field.
Daimler and the BMW Group intend to jointly develop the next
technology generation for driver-assistance systems, auto-
mated driving on highways and automated parking functions
(up to SAE Level 4 in each case). In addition, the partners aim
to hold talks on extending the scope of cooperation to higher
levels of automation in urban environments. One objective of
the cooperation is to achieve the rapid market launch of the
technology.
Daimler adjusts earnings expectations
Daimler reassesses its earnings expectations for financial year
2019 and the second quarter of 2019. The main reasons for the
initial reassessment are an increase in expected expenses in
connection with various ongoing governmental proceedings
and measures relating to Mercedes-Benz diesel vehicles. A
further adjustment is necessary primarily due to special items
which add up to a total amount of €4.2 billion in the second
quarter.
1 Electricity consumption and range were determined on the basis of
Regulation 692/2008/EC. Electricity consumption and range depend on
vehicle configuration.
Q2
46 A | HIGHLIGHTS 2019
Mercedes-Benz EQV (combined electricity consumption: 27.0 kWh/100 km; combined CO2 emissions: 0 g/km, preliminary figures)1
Daimler welcomes acquisition of shares by BAIC Group
The Beijing Automotive Group Co. Ltd.(BAIC Group) acquires a
five percent equity interest in Daimler AG through an indirect
subsidiary. Daimler and BAIC are linked by a long-standing
strategic partnership that has existed since 2003. Since then,
the two companies have been cooperating on the production,
research and development, and sale of cars, vans and trucks.
Daimler acquired a stake in BAIC Motor, a listed subsidiary of
BAIC, in 2013 and currently holds 9.55 percent of its shares.
Daimler Financial Services AG becomes Daimler
Mobility AG
Daimler Financial Services AG now operates under the name
Daimler Mobility AG and provides financing, leasing, insurance
and fleet-management services for the entire Daimler Group.
Daimler Mobility AG is also a strategic investor in mobility
services such as FREE NOW, SHARE NOW and Blacklane. The
mobility ecosystem is completed by flexible service offerings
such as Mercedes-Benz Rent (car rentals) or Mercedes me
Flexperience (car-on-demand solutions).
Daimler Trucks puts first highly automated truck
(SAE Level 4) on the road
Daimler Trucks and Torc Robotics start with the development
and testing of highly automated trucks (SAE Level 4) on defined
public roads. The operation initially takes place in Virginia,
where Torc Robotics has its headquarters. This follows months
of testing on closed roads.
Daimler Trucks & Buses and CATL agree on global supply
of battery modules for electric trucks
Daimler Trucks & Buses and battery manufacturer Contempo-
rary Amperex Technology Co. Limited (CATL) agree to supply
battery modules for series-produced electric trucks worldwide.
CATL will supply lithium-ion battery modules for several
electric trucks in the global portfolio of Daimler Trucks & Buses
that are scheduled to go into series production in 2021.
Mercedes-Benz EQV: premiere for premium multipurpose
vehicle with electric drive
Mercedes-Benz Vans presented the Concept EQV as a study
vehicle at the Geneva Motor Show in March 2019. The produc-
tion version in August has its premiere as the Mercedes-Benz
EQV (combined electricity consumption: 27.0 kWh/100 km;
combined CO2 emissions: 0 g/km, preliminary figures)1. As a
member of the Mercedes EQ family, the first battery-powered
premium MPV from Mercedes-Benz combines locally emis-
sion-free mobility with convincing performance, high function-
ality and aesthetic design.
Administrative offence proceedings against Daimler AG
are fully concluded
The public prosecutor’s office in Stuttgart issues a fine notice
against Daimler AG due to the negligent violation of supervi-
sory duties in the area of vehicle certification in connection
with deviations from regulatory requirements for certain
Mercedes-Benz vehicles. The negligent breach of supervisory
duty was found to have occurred at the level of department
head. Daimler refrains from taking a legal remedy against the
fine notice. The fine proceedings of the public prosecutor’s
office against Daimler AG are thus fully concluded.
Development partnership for second-life batteries
Mercedes-Benz AG through its wholly-owned subsidiary
Mercedes-Benz Energy GmbH and Beijing Electric Vehicle Co.
(BJEV), a subsidiary of the BAIC Group, have entered into a
development partnership to develop second life energy-stor-
age systems in China. With a view to the value chain of auto-
motive battery systems, the partner companies are pooling
their expertise and resources and laying the foundation for the
development of a sustainable, renewable-energy industry.
1 Data on electricity consumption and range are provisional and have
been determined by the technical service for the certification procedure
according to UN/ECE Regulation No 101. EC type approval and a certifi-
cate of conformity with official values are not yet available. This data
may deviate from the official values.
Q3
A | HIGHLIGHTS 2019 47
Daimler launches new corporate structure
As planned, the Daimler Group launches its new corporate
structure on November 1, 2019. The hive-down of the car and
van businesses on the one hand and the truck and bus busi-
nesses on the other to two new subsidiaries took effect on
October 31 with the entry for Daimler AG in the commercial
register. Under the umbrella of Daimler AG, the Group’s operat-
ing activities will be managed in the new corporate structure in
three divisions instead of five. Mercedes-Benz AG is responsi-
ble for the business of Mercedes-Benz Cars & Vans. Daimler
Truck AG combines the activities of Daimler Trucks & Buses.
Daimler Financial Services, which has been legally indepen-
dent for many years, was renamed as Daimler Mobility AG in
July. With these three subsidiaries, Daimler is strengthening its
customer focus and increasing the Group’s agility.
Daimler cuts costs and sets its course for the future
Daimler presents a new, sustainable business strategy at its
Capital Markets Days in London and New York. With a consis-
tent commitment to CO2-neutral mobility, the company is
setting its course for a successful future. Daimler is positioning
itself for the transformation with a clear strategy for the future.
The costs to be incurred in order to achieve the CO2 targets
require comprehensive measures to increase efficiency in all
areas of the company. This is likely to adversely affect our
earnings in 2020 and 2021.
Comprehensive ecosystem for truck customers’ entry into
electric mobility
The Daimler Trucks & Buses E-Mobility Group, a cross-divi-
sional organization within Daimler Trucks & Buses, launches a
full ecosystem for truck customers for the best possible entry
into electric transport logistics. This includes a comprehensive
range of consulting services and the development of a
charging infrastructure suitable for electric trucks. In addition
to personal and individual advice, the modular range of ser-
vices also includes digital applications that make it easier to
get started with e-mobility. The first step will focus on the
markets of Europe, North America and Japan. The consulting is
already being successively implemented with the first
customers.
Mercedes-Benz Actros is ”Truck of the Year”
Commercial-vehicle trade journalists from 24 European coun-
tries vote the Mercedes-Benz Actros as best truck of the year
for the fifth time. The success story began with the first Actros
in 1997 and the following generations also won the award. With
nine titles, Mercedes-Benz is now the most successful brand in
the battle for recognition for technological advancement, the
key criterion in the selection process of the international Truck
of the Year jury.
Daimler decides on key points for streamlining the
company
Daimler and the General Works Council agree on the key
points to streamline the Group structure, thus increasing
efficiency and flexibility. To this end, joint measures have been
agreed to reduce costs and jobs in a socially responsible
manner. Daimler will therefore make use of normal staff
turnover to reduce the size of the workforce as jobs become
vacant. In addition, possibilities for pre-retirement part-time
working will be expanded and a severance program will be
offered in Germany in order to reduce the number of manage-
ment positions.
Daimler Mobility AG and Geely Technology Group launch
StarRides premium limousine service
Daimler Mobility AG and the Geely Technology Group, a sub-
sidiary of the Zhejiang Geely Holding Group, launch StarRides,
a premium limousine service in Hangzhou, China. The Star-
Rides fleet starts with 100 vehicles and comprises models of
the Mercedes-Benz S-Class, E-Class and V-Class series. The
service is to be launched in further major cities in China in 2020.
Q4
48 A | TO OUR SHAREHOLDERS | DAIMLER AND THE CAPITAL MARKET
Daimler and the Capital Market
Global stock markets tended to be significantly stronger in many regions in 2019. The Daimler
share price rose by 8% throughout the year. In 2019, we continued to inform institutional investors,
analysts, rating agencies and private investors by means of a wide range of investor relations
activities and comprehensive reporting on the Group’s business development and prospects. Our
refinancing benefited from a high level of capital-market liquidity and a consistently solid rating.
The Board of Management and the Supervisory Board will propose to the Annual Shareholders’
Meeting that a dividend of €0.90 (2018: €3.25) per share be paid for 2019.
A.01
Development of Daimler’s share price and of major indices
End of 2019 End of 2018
19/18
% change
Daimler share price (in euros)
49.37
45.91
DAX 30
Euro STOXX 50
Dow Jones Industrial Average
Nikkei
STOXX Europe Auto Index
13,249
3,745
28,538
23,657
509
10,559
3,001
23,327
20,015
439
+8
+25
+25
+22
+18
+16
A.02
Key figures per share
Amounts in euros
Net profit
Dividend
Equity (December 31)
Xetra price at year end1
Highest1
Lowest1
1 Closing prices
2019
2018
19/18
% change
2.22
0.90
57.34
49.37
59.31
40.53
6.78
3.25
60.45
45.91
75.69
45.27
-67
-72
-5
+8
-22
-10
Global stock markets significantly stronger
Global stock markets developed very positively in the first
four months of 2019. The favorable outlook regarding a possible
settlement of the trade war between the United States and
China in order to avoid punitive tariffs, as well as the announce-
ment by the US Federal Reserve bank that it would not be
raising interest rates any time in the near future, led to higher
demand for stocks around the world. In May, however,
stock-market sentiment deteriorated noticeably. Extensive
uncertainty on the market was driven by the escalation of
the trade war, concerns about economic growth in China, and
the resignation of the British Prime Minister in the wake of
the Brexit debate in the UK. Indications from central banks
regarding the implementation of expansionary measures
had a further positive effect on stock markets between June
and the end of July. The markets then consolidated, however,
with the mood overshadowed by declines in the Purchasing
Managers Index and the Business Climate Index. Discussions
relating to the possibility of a hard Brexit, as well as the
ongoing trade war between the United States and China, also
led to more reserved behavior on the part of investors in
August. The second half of the third quarter was once again
marked by renewed positive news relating to the trade war
and Brexit, which led to gains on stock markets. Following a
weak phase at the beginning of the fourth quarter, investors
became more optimistic again. Global stock markets then picked
up, with strong gains made more or less across the board
throughout the rest of the quarter. Cyclical stocks and, in par-
ticular, shares in the automotive and supplier industries
benefited from this development.
The index of the most important equities in the euro zone, the
Euro STOXX 50 and the German benchmark index, the DAX,
both rose by 25% in 2019. In Japan, the Nikkei index closed the
year at 23,657, which was 18% higher than a year earlier. In
the United States, the Dow Jones reached an all-time high of
28,645 in December and was 22% above the prior-year level
at the end of 2019.
Daimler share price rises 8% over the year
Over the first three months of 2019, automotive stocks also
recovered significantly from the low share prices that had
dominated the markets at the end of 2018. This development
was mainly due to the continuation of trade negotiations
between the United States and China, as well as positive sig-
nals from the Federal Reserve, which had significantly
increased interest rates in the preceding years. The announce-
ment of our collaboration with BMW in the areas of mobility
services and automated driving, and with Geely on the further
development of the smart brand, generated additional momen-
tum and led to a substantial increase in our share price until
the end of March (+14 %). On April 18, the Daimler share price
reached €59.31, which was the highest price for the year.
A profit-taking phase then began on the German stock market,
and this affected the Daimler share as well. Along with the
global trade tensions, there were also increasing concerns
about a possible further economic slowdown, which would
obviously have a negative impact on earnings in the automo-
tive industry, particularly in view of the global supplier and
production networks operated by automotive companies. In
this very weak stock-market environment, our shares reached
their lowest point of the year 2019 at €40.53 on August 15.
Stock prices then began rising significantly again in September
(with a brief temporary interruption) as a result of positive
news about the trade war and Brexit. Automotive shares par-
ticularly benefited from the decision made by the US Depart-
ment of Commerce to refrain for the time being from imposing
punitive tariffs on automobiles imported from Europe and
Asia. In the second half of the fourth quarter, the Daimler
share price lost some of the gains that had been made in the
interim, with the Daimler share closing at €49.37 on December
30. At the end of the year, Daimler had a market capitalization
of €52.8 billion (2018: €49.1 billion). With a total increase of
8% in 2019, the development of Daimler’s share price was thus
weaker than that of the DAX (+25%) and the STOXX Europe
Auto Index (+16%).
Dividend of €0.90
The Board of Management and the Supervisory Board will
recommend the payment of a dividend of €0.90 per share for
financial year 2019 (2018: €3.25) at the Annual Shareholders’
Meeting on April 1, 2020. The total dividend will thus amount
to €963 million (2018: €3,477 million).
A broad shareholder structure and a new investor with a
long-term focus
Daimler continues to have a broad shareholder base of approx-
imately 1.0 million shareholders (2018: 1.0 million). Tenaciou3
Prospect Investment Limited, a company controlled by the
Chinese entrepreneur Li Shufu, who is also the founder and
CEO of Geely, became Daimler AG’s largest individual share-
holder in February 2018. Tenaciou3 Prospect Investment
Limited currently owns 9.7% of the company’s shares. The
Kuwait Investment Authority (KIA) currently owns 6.8% of the
company’s stock, making it Daimler AG’s second-largest
single shareholder. In July 2019, we were informed by the Chi-
nese BAIC Group that it had acquired an interest in Daimler AG
via its wholly owned subsidiary Investment Global Co. Ltd.
With approximately 5% of Daimler’s equity capital, the BAIC
Group is now Daimler AG’s third-largest single shareholder.
The Renault-Nissan Alliance continues to hold 3.1% of
Daimler’s shares. In December 2019, Bank of America Corpo-
ration notified us that at 6.17%, its proportion of the voting
rights remained above the 5.0% reporting limit on December
20, 2019. In October 2018, Harris Associates L. P., Wilmington,
notified us that its proportion of the voting rights was 4.93%
on October 16, 2018. BlackRock, Inc., Wilmington, also holds a
stake above the 3% reporting limit pursuant to Germany’s
Securities Trading Act (WpHG). In December 2019, BlackRock
notified us that its proportion of the voting rights was 4.47%
on November 27, 2019.
The aforementioned and all other voting-rights notifications are
published on the Internet at w daimler.com/investors/share/
voting-rights.
A | TO OUR SHAREHOLDERS | DAIMLER AND THE CAPITAL MARKET 49
Institutional investors hold a total of 54% of our equity capital,
while private investors own 21%. Approximately 58% of our
capital is in the hands of European investors and around 15% is
held by US investors. Investors from Asia hold around 17% of
our equity capital. A.07 A.08
With a weighting of 3.95% (2018: 4.67%), Daimler was ranked
ninth in the German share index DAX 30 at the end of 2019. In
the Euro STOXX 50 index, our shares had a weighting of 1.55%
(2018: 1.93%), which put Daimler in 29th place. Daimler shares
are listed on the stock exchanges in Frankfurt and Stuttgart.
A total volume of 1,108 million shares were traded in Germany
in 2019 (2018: 1,093 million). A substantial number of Daimler
shares are also now traded on multilateral trading platforms
and in the over-the-counter market.
Employee stock purchase plan implemented once again
Staff members entitled to purchase employee stock were able
to do so once again in March 2019. As was the case in the pre-
vious year, price-reduced shares as well as bonus shares were
A.03
Daimler share price (high/low), 2019
In euros
10/19
11/19
12/19
70
65
60
55
50
45
40
35
30
1/19
2/19
3/19
4/19
5/19
6/19
7/19
8/19
9/19
A.04
Share price index
140
135
130
125
120
115
110
105
100
95
90
85
80
12/31/18
6/30/19
12/31/19
Daimler AG
STOXX Europe Auto Index
DAX
50 A | TO OUR SHAREHOLDERS | DAIMLER AND THE CAPITAL MARKET
A.05
Key figures for Daimler shares
Share capital (in millions of euros)
Number of shares (in millions)
Market capitalization (in billions of euros)
Number of shareholders (in millions)
Weighting in share indices
DAX 30
Euro STOXX 50
Long-term credit ratings
S&P
Moody’s
Fitch
Scope
DBRS
A.06
Stock-exchange data for Daimler shares
End of
2019
End of
2018
19/18
% change
0
0
+8
0
3,070 3,070
1,069.8 1,069.8
49.1
52.8
1.0
1.0
3.95% 4.67%
1.55% 1.93%
A-
A3
A-
A
A
A
A2
A-
A
A
ISIN
German Securities Identification Number
Stock exchange symbol
Reuters ticker symbol
Bloomberg ticker symbol
DE0007100000
710000
DAI
DAIGn.DE
DAI:GR
A.07
Shareholder structure as of December 31, 2019
By type of shareholder
Tenaciou3 Prospect
Investment Limited
Kuwait Investment Authority
BAIC Group
Renault-Nissan
Institutional investors
Retail investors
9.7 %
6.8 %
5.0 %
3.1 %
54.1 %
21.3 %
A.08
Shareholder structure as of December 31, 2019
By region
Germany
Europe, excluding Germany
USA
Kuwait
Asia
Rest of the world
30.2 %
27.3 %
15.4 %
6.8 %
16.7 %
3.6 %
offered. At 25.5%, the participation rate in the year under
review was once again higher than in the previous years (2018:
23.5%). A total of 45,700 employees took part in the program
(2018: 41,900), which is the highest number since 2008. The
total number of shares purchased by employees also increased
substantially once again, from 717,000 in 2018 to approxi-
mately 811,000, of which just under 73,200 were bonus shares
(2018: 64,700) in the year under review. In connection with
the attendance bonus program, approximately 15,600 shares
were additionally purchased and transferred to the beneficia-
ries (2018: 15,000).
Daimler Annual Shareholders’ Meeting in Berlin
Due to the preparations being made for the new Group struc-
ture, our 2019 Annual Shareholders’ Meeting was held on
May 22 at the Messe Berlin exhibition center. Some 5,000 share-
holders (2018: 6,000) attended the meeting. A total of 52.91%
(2018: 55.71%) of equity capital was represented at the meet-
ing (actual attendees and shareholders who voted by absentee
ballot). A large majority of the shareholders approved each
of the agenda points proposed by the company’s management.
For example, the Annual Shareholders’ Meeting approved a
dividend payout of €3.25 per share (2018: €3.65), which means
the total dividend amounted to €3.5 billion. Important docu-
ments and information related to the Annual Shareholders’
Meeting can be found on the Internet at w daimler.com/ir/
am2019.
Daimler shareholders voted in favor of the new Group structure
by an overwhelming majority of 99.75%. This structure
establishes Daimler AG as the parent company of the legally
independent entities Mercedes-Benz AG (for the cars and vans
business) and Daimler Truck AG (for business activities relating
to trucks and buses). In addition, the Annual Shareholders’
Meeting once again elected Joe Kaeser and Bernd Pischetsrie-
der to the Supervisory Board as shareholder representatives.
Joe Kaeser is the CEO of Siemens AG and Bernd Pischetsrieder
is a former CEO of BMW AG and VW AG. Both have been mem-
bers of the Supervisory Board of Daimler AG since 2014. The
terms for both reelected Supervisory Board members will end
when the Annual Shareholders’ Meeting is held in 2024.
After more than 13 years as Chairman of the Board of Manage-
ment of Daimler AG and Head of Mercedes-Benz Cars,
Dieter Zetsche stepped down from his position at the conclu-
sion of the Annual Meeting 2019. At the conclusion of the
2019 Annual Shareholders’ Meeting, Ola Källenius was named
Chairman of the Board of Management of Daimler AG and
Head of Mercedes-Benz Cars. Also at the conclusion of the
2019 Annual Shareholders’ Meeting, Bodo Uebber stepped
down as the Board of Management member responsible for
Finance and Controlling and Daimler Financial Services, a posi-
tion he had held since 2005. His successor is Harald Wilhelm,
who has been a member of the Daimler AG Board of Manage-
ment since April 1, 2019.
Continuation of comprehensive investor relations
activities
In 2019, we once again provided institutional investors, ana-
lysts, rating agencies and private investors with timely informa-
tion regarding the company’s business development. We orga-
nized roadshows for institutional investors and analysts in the
finance capitals of Europe, North America and Asia. We also
held many one-on-one meetings at investor conferences. This
was especially the case at the international motor shows in
Geneva and Frankfurt. We reported on our quarterly results in
conference calls and webcasts. At the same time, we have fur-
ther developed our methods in order to more specifically
address long-term investors who may be interested in purchas-
ing shares in Daimler. The presentations are available on our
website at w daimler.com/investors/events/presentations.
The talks with analysts and investors focused on the latest earn-
ings expectations for 2019, business developments and
profitability in individual divisions and regions, and our “Project
Future.” Investors are also now focusing more strongly on the
transformation of the automotive industry and the shift toward
locally emission-free mobility, as well as the impact that
research and development expenditure on new technologies is
having on profitability. Daimler’s top management also held
capital market events in London and New York at which they
provided analysts and investors with an update on the Group’s
strategy for all of its business units and a preview of the ROI
roadmap for the coming years. The costs for the electrification
of the complete model range and the impact connected with
the transformation of the automobile sector overall will have a
negative effect on the earnings situation. They will lead to
additional product costs and higher depreciation for the currently
very high investment volumes. We intend to counteract these
impacts by means of comprehensive measures to reduce
costs. The audio/video recordings and charts and illustrations
from the event are available at w daimler.com/investors/
events/capital-market-days.
Awards once again for the Daimler Annual Report
Our 2018 Annual Report and its online version with numerous
additional features won prestigious international awards once
again. w annualreport.daimler.com/2018
The 2018 Annual Report received a Platinum Vision Award
from the League of American Communications Professionals
LLC (LACP). In addition, we were once again given a Silver
Stevie Award for the online version of the 2018 Annual Report,
which also captured Silver at the 2018 LACP Professionals
Vision Awards.
Website: attractive page design, improved user experience
The Investor Relations site at w daimler.com/investors is
the main source of information for the majority of our share-
holders. With this in mind, we made further improvements to
the site in 2019. For example, our improved page structure
makes it easier for visitors to navigate the site and move more
quickly to the sections they wish to view. We’ve also made
the site easier to use with mobile terminals. Our news pages,
for example, are always available in HTML format and auto-
matically adapt to any mobile device display. Our IR media
library is an additional service that offers the most important
news, documents and videos at a glance. Our IR website
had nearly one million visitors in 2019 and over two million
page views, which corresponds to approximately 2,600 visitors
and 5,800 page views per day. Our IR site also achieved an
outstanding third-place ranking in a benchmark study by Net
Federation GmbH, an agency for digital corporate communica-
tion, of the websites of the 70 German companies with the
highest market capitalization.
Number of online shareholders reaches over 200,000
Our shareholders continue to make good use of our range of
personalized electronic information and communication. In
March 2019, we sent a notice to shareholders requesting their
A | TO OUR SHAREHOLDERS | DAIMLER AND THE CAPITAL MARKET 51
consent to receive their invitation to the Daimler Annual
Shareholders’ Meeting by e-mail rather than by post. Our goal
here was to reduce as much as possible the consumption of
paper and the costs associated with mailing paper documents,
which in 2019 also included the very extensive and complex
Hive-down and Acquisition Agreement between Daimler AG,
Mercedes-Benz AG and Daimler Truck AG. We were very
pleased by our shareholders’ positive reaction to the electronic
invitation campaign. Due to this positive response, we were
able to increase the number of e-mail invitations to the Daimler
Annual Shareholders’ Meeting from 100,000 to 220,000 – and
reduce CO2 emissions by around 50 tons as a result. We
would like to thank those shareholders for helping to protect
the environment and cut costs. Access to the e-service for
shareholders and additional information can be found at
w https://register.daimler.com.
Refinancing benefits from a high level of capital-market
liquidity and consistently solid ratings
The central banks’ monetary policy had a major effect on bond
markets in 2019. As a result of the high level of liquidity, com-
panies with investment-grade ratings saw their risk premiums
remain at a moderate level for the most part.
In 2019, the Daimler Group primarily covered its refinancing
needs by issuing bonds. A large proportion of those bonds were
sold as benchmark bond issuances (bonds with high nominal
volumes) in euro and US-dollar markets. In the US capital mar-
ket, for example, Daimler Finance North America LLC issued
bonds worth a total of $7.00 billion. In addition, Daimler AG and
Daimler International Finance B. V. issued euro bonds in
benchmark format with a total volume of €10.25 billion. In 2019,
Daimler AG also issued bonds in China (so-called Panda bonds)
worth a total of CNY 10.0 billion. Furthermore, many smaller
bonds were issued by the Daimler Group in a variety of curren-
cies and markets.
At the end of 2019, Daimler Group companies had issued
bonds that were still outstanding in a volume of 85.6 billion
(2018: €76.5 billion). Besides raising funds through the issu-
ance of bonds, Daimler also issued a small volume of commer-
cial paper in 2019.
During the year under review, Daimler issued asset-backed
securities (ABS) in five countries. In the United States, the
company generated a refinancing volume of $8.7 billion through
six transactions in 2019; in Canada, a volume of CAD 1.0 billion
was generated in two transactions. Two transactions with a
total volume of AUD 1.26 billion were executed in Australia in
2019. Such bonds were also successfully sold to investors in
Italy for the first time, in the amount of €0.5 billion. In China,
one ABS transaction was conducted successfully with a total
volume of CNY 8.5 billion.
During the course of the year under review the rating agencies
S&P and Moody’s reacted to the worsened earnings situation,
initially with an adjustment of the outlook and, in December
2019, by downgrading the rating of Daimler AG by one notch.
The agencies justified this mainly with the challenges posed by
the electrification of the product portfolio, as well as the
costs for the necessary reduction of CO2 emissions and the
expectation of a more difficult economic climate, which was
also reflected in lower expected returns.
52 A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY
Objectives and Strategy
For more than 130 years, we have been moving people and goods all over the world – safely,
efficiently, comfortably and with innovative technologies that have always kept us a step ahead
of the competition. Building outstanding and fascinating vehicles is what we do best. It’s what
drives us, and it will continue to drive us forward into the future. The environment in which we
operate is changing in a highly dynamic way. Sustainability and climate protection in particular
are among the most urgent issues of our time. We accept this responsibility. Our goal is to set
standards for sustainable mobility – now and in the future.
Our strategy
Sustainability and climate protection
We firmly believe that individual mobility will be a basic human
need in the coming decade as well, and that the market for
sustainable automobiles in the luxury segment will continue to
grow. Demand for goods transport services remains a key pil-
lar of the economy and our prosperity, and this demand can be
expected to increase even further around the globe for years
to come. The markets for financial services and the demand for
fleet management services and digital mobility solutions are
also likely to develop positively in the future. We are commit-
ted to the principles of sustainability and in particular of cli-
mate protection, and are therefore setting our course for CO2-
neutral mobility.
Purpose
The basis of our strategy is our purpose – the spirit and pur-
pose that guide all of our decisions and actions. What is our
DNA, what makes us who we are, why are we as a company
active in the market?
We have answered these questions for all of our divisions.
Mercedes-Benz Cars’ motto is “First Move the World.” Daimler
Trucks & Buses is there “For All Who Keep the World Moving,”
and Daimler Mobility makes it clear that “We Move You.”
Daimler itself is the connecting element that holds these busi-
nesses together, as symbolized by the word “move.”
We have derived specific goals from our aspiration. We seek to
make mobility and the transport of goods more sustainable,
and we plan to continue growing in our core business. We are
implementing electric drive systems at all of our divisions
as a priority, and we continue to pursue automated and auton-
omous driving and mobility services that benefit customers
and make us more profitable. We are moving forward with digi-
tization measures and exploiting the potential they offer. All
of these activities are geared toward ensuring that we achieve
our financial targets.
Sustainability is an integral part of our corporate strategy. The
implementation of a sustainable corporate strategy is the only
way we can ensure our continued success over the long term.
In line with this approach, we plan to work towards offering
CO2-neutral mobility over the next 20 years. We also intend to
decouple resource consumption from growth in our business
volumes, provide mobility and traffic management solutions that
make cities more livable, implement measures that increase
safety on the road, continue to utilize data responsibly, and
assume responsibility for upholding human rights along the
entire value chain. Achieving success in all these areas requires
a clear commitment to a culture of integrity, as well as future-
oriented cooperation with our workforce and our partners in
industry, government and society at large. A central sustain-
ability management system enables the effective planning of
ambitious goals and the monitoring of their achievement.
In our view, climate protection will be the biggest challenge
over the coming years. Our “Ambition 2039” strategy for
Mercedes-Benz passenger cars clearly demonstrates our com-
mitment to climate protection. Our goal here is to become
CO2-neutral by 2039. More specifically, this means we plan to
achieve Group-wide CO2-neutral production in Europe as of
2022, attain a sales structure in which plug-in hybrids and all-
electric drive systems account for more than 50% of our port-
folio by 2030, and – within less than three product lifecycles –
offer a CO2-neutral new car fleet to our customers. The new
Factory 56 assembly hall at the Mercedes-Benz plant in Sin-
delfingen was planned as a CO2-neutral facility from the very
beginning. In addition, our new plant in Jawor, Poland, uses
wind power for sustainable manufacturing operations. A holis-
tic view of the CO2-reduction issue also needs to take the
recycling of raw materials into account. Mercedes-Benz cars’
materials are 85% recyclable.
A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY 53
A.09
Our Strategy: MOVE PERFORM TRANSFORM
Sustainability
and climate protection
Culture and integrity
Partnerships
Automated and
autonomous driving
Digital services and
digital platforms
MOVE
PERFORM
TRANSFORM
Markets and growth
Efficiency
Customers and brand
Platforms and
drivetrains
Electrification of our
drive system portfolio
Our goal at Mercedes-Benz Vans is that vans targeted at pri-
vate customers are to be CO2-neutral over the entire lifecycle
by the year 2039. With vans used by commercial customers,
we intend only to offer new vehicles that are CO2-neutral in
driving operation (tank-to-wheel) in the major markets Europe,
Japan and the NAFTA region.
Daimler Trucks & Buses is also committed to climate protec-
tion. The main challenge we face in the truck and bus sector
involves reconciling the higher costs of electric drive systems
with the focus on costs that is prevalent in the transport indus-
try. Daimler Trucks & Buses plans to become CO2-neutral with
regard to driving operation (tank-to-wheel) by launching new
trucks and buses in the major markets of Europe, Japan and
the NAFTA region between now and 2039. Plans also call for
all Daimler Trucks & Buses facilities in Europe to achieve CO2-
neutral production by 2022, at which point all the energy they
use should be generated from renewable sources. The plan-
ning and following up of targets at Daimler are ensured by a
central sustainability management system.
Markets and growth
Our goal is to safeguard and expand the leading positions that
our divisions occupy in their respective segments. Individual
and self-determined mobility is likely to remain our primary
business model for the car segment over the coming decade.
Although flexible forms of use will continue to spread, our
experience at present shows that such use will augment rather
than replace the use of privately owned passenger cars. Vol-
umes in the premium and luxury segments in particular should
increase further. Growth here is likely to be driven primarily by
China and other Asian markets, although the more established
markets in Europe and the United States will contribute to this
growth as well. We plan to exploit this potential, in particular
with our range of high-quality models such as the G-Class, as
well as through our Mercedes-AMG and Mercedes-Maybach
sub-brands.
54 A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY
China is now the world’s biggest car market, but it is also an
important market for new technologies and procurement. We
plan to continue growing in China together with our partners,
with whom we will also intensify our cooperation.
We expect to see further growth in the Vans segment as well.
The ongoing increase in online retail sales in particular will
likely serve as an important foundation for such growth.
Mercedes-Benz Vans plans to further strengthen its position in
specific customer segments and in North America.
With regard to Daimler Trucks & Buses, we plan to improve our
market position in Europe with the help of the new Actros, and
to expand our range of products in the NAFTA region through
the launch of a new vocational truck. In Latin America, we seek
to benefit from the market recovery and to expand our position
in a highly profitable segment by launching a heavy-duty truck
based on our global platform. As the market leader in our most
important traditional core markets for buses over 8 tons gross
vehicle weight, we plan to further safeguard this market posi-
tion and develop our business in the NAFTA region and other
markets.
Daimler Mobility offers mobility services under the motto
“Mobility from years to minutes.” With its leasing, financing
and insurance packages, Daimler Mobility supports the growth
of our automotive divisions and the solutions it offers also
increase customer loyalty and identification with the company.
Additional innovative services such as Flexperience, a flexible
vehicle rental model, will further support sales at our automo-
tive divisions. We also plan to continue growing in the fleet
management sector and to increase the share of our vehicles
used in various fleets. In the area of digital mobility solutions,
we plan to safeguard our strong position in the market for pre-
mium driver services over the long term and, as a shareholder
in the YOUR NOW group, we will work with BMW to establish a
relevant new player in the segment for mobility services in
Europe and Latin America.
Efficiency
The financial challenges we now face are more extensive than
ever before due to the measures we have to implement to help
ensure a CO2-neutral future. Addressing these challenges will
require extensive investment in electric mobility, which has
higher production costs than with combustion engines, and a
comprehensive restructuring plan. The attainment of our prof-
itability targets and the maintenance of a solid cash flow have
top priority here, as this is the only way to ensure that we will
play a leading role in the transformation to a CO2-free society.
Measures to improve efficiency have been defined at all divi-
sions and for Daimler AG as a whole. These measures relate to
our workforce, material-cost reductions, upper limits on
investments, adjustments to our portfolio and vehicle models,
the implementation of platform strategies, and across-the-
board digitization of processes at Daimler Mobility. Plans also
call for an increasing number of Group vehicles financed or
leased by Daimler Mobility to be refinanced in a manner that
does not impact our balance sheet. In addition, the allocation
of financial resources at the parent-company level will be made
transparent and be rigorously monitored.
Customers and brand
We are intensifying our focus on the customer experience. The
further development of our brand plays a key role in this pro-
cess. According to the current “Best Global Brands 2019” rank-
ing from Interbrand, Mercedes-Benz is the most valuable Ger-
man brand and the world’s most valuable premium automotive
brand. We want to make our brand even more distinctive in the
future, and make it more customer-focused as well. Maintain-
ing emotional ties to our customers is more important than
ever, especially in times of transformation. The brand emotions
of LOVE and EASE complement the attributes that have always
been an essential part of our Mercedes-Benz brand’s DNA and
will remain so in the future: RESPECT and TRUST. The core of
our brand (THE BEST), and our existing brand values (EMO-
TIONAL and INTELLIGENT), remain unchanged. We create emo-
tional Mercedes-Benz moments for every physical and digital
interaction with the brand. We plan to increase customer satis-
faction with new and flexible usage models and seamless inte-
gration of our products and services.
With regard to our commercial vehicles as well, our customers
are at the focus of everything we do. We seek to supply prod-
ucts and services that make them successful. We develop
technologies in order to be able to further reduce the total cost
of transport and to offer safe and efficient solutions for the
goods transport and distribution of the future.
Electrification of our drive system portfolio
Digital services and digital platforms
A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY 55
As we continue along the road to emission-free mobility, we
intend to forge ahead with the electrification of drivetrains in
Mercedes-Benz passenger cars using 48-volt technology. We
will also gradually increase the number of hybrid and battery-
electric models that we offer. Our goal here is to attain a sales
structure in 2030 in which plug-in hybrids and all-electric vehi-
cles account for more than 50% of all the new cars we sell.
Mercedes-Benz Vans already offers the eVito; the eSprinter
and our battery-electric full-size MPV is to follow in 2020.
Mercedes-Benz Vans has also announced an electric variant of
the successor model of the Citan. By 2022, Daimler Trucks
plans to have electric vehicles ready for series production in all
of its key regions and segments. The focus here will be on bat-
tery-electric models. The range of vehicles will subsequently
be extended by the inclusion of fuel-cell/hydrogen-based sys-
tems for trucks. Daimler Buses presented the all-electric
eCitaro back in mid-2018. Plans call for the range of bus prod-
ucts to be expanded to include buses equipped with fuel-cell
systems. The E-Mobility Group Trucks & Buses is implementing
the electric strategies for all truck and bus brands and estab-
lishing a globally standardized electric-vehicle architecture.
Platforms and drivetrains
Over the medium to long term, we plan to reduce the high
degree of complexity of our passenger car models and
engines, as well as the number of platforms we use for passen-
ger cars. Because we believe that new vehicles with combus-
tion engines will continue to play a role in the market for new
cars and vans over the medium term, we are further develop-
ing our conventional engines in line with the next stage of EU
certification. We plan to complete this process over the next
few years, after which we expect to see a significant decrease
in development work and expenditure on combustion engines.
We will compensate for the currently higher costs associated
with electric drive by developing a flexible architecture for
such drive systems and combustion engines in which the inte-
gration of electric-drive components will be given absolute pri-
ority. Our plans for the next few years also call for the cus-
tomer-oriented optimization of both the number of different
truck models and the number of drive types and regional plat-
forms.
Mercedes me and our digital services are designed to generate
added value for the customer. Activities relating to digital
services for Mercedes-Benz cars are therefore based on the
development of an open software architecture that offers con-
trolled access and interfaces that enable customers also to
utilize third-party services. We are convinced that as a vehicle
manufacturer, we should also have our own operating system
and be able to understand, monitor and control it. This
approach gives us direct access to the customer and enables
us to ensure that customer and vehicle data is handled in a
responsible manner. With MBUX (Mercedes-Benz User Experi-
ence), we have set a new standard for intuitive multimedia
systems that manage communication between the driver and
the vehicle and its surroundings, and which are capable of
adapting and learning. With trucks, the focus has also increas-
ingly shifted to the development of software and electronic
systems in recent years. The Truck Data Center launched by
Daimler Trucks is the brain that allows connectivity between
trucks of different brands. It continuously monitors the status
of vehicle systems and sends and receives data in real time.
Digital services such as Fleetboard, Mercedes Uptime, Detroit
Connect, Virtual Technician and Truckonnect are all based on
this connectivity module and thus help to increase the effi-
ciency of transport operations. With its digital cockpit, the
Mercedes-Benz Actros allows for simple and intuitive opera-
tion and makes it possible for drivers to perform numerous
tasks from the cockpit. Daimler Buses offers its digital services
via the OMNIplus ON platform, while Mercedes PRO is the digi-
tal services brand at Mercedes-Benz Vans. Daimler Mobility
is now looking to completely digitalize its processes and the
customer journey all the way through to the payment process.
Autonomous and automated driving
As we continue to develop automated and autonomous driving,
we are focusing on driver assistance systems on the one hand
and highly automated (SAE Level 4) and fully automated urban
driving on the other.
In order to get automated systems to market more quickly,
while simultaneously easing our cost burden, we have
launched a long-term development partnership with BMW. This
is just one of our cooperation projects in this area. We intend
to work together with BMW to develop the next generation of
technologies for driver assistance systems, automated driving
on highways, and automated parking systems. Such systems
will be made available in cars for private customers starting in
2024. The partnership with BMW is open to other automakers
and technology partners. Furthermore, the results of the part-
nership will be offered to other vehicle manufacturers via
licensing agreements.
The Group’s strategic approach can be summarized in
three core statements:
MOVE – Reinvent the invention
As the inventor of the automobile, it is in our nature to repeat-
edly reinvent mobility. Our aspiration is to offer sustainable
solutions for mobility and the transport of goods in the future.
We want to inspire emotionally and convince rationally. We aim
to bring sustainability and luxury into harmony. Our innovative
and highly efficient commercial vehicles are designed to make
our customers in the haulage and transportation sectors suc-
cessful.
We are working systematically to achieve our “Ambition 2039”
goal of CO2-neutral mobility. To do so, we are also utilizing the
potential offered by automated driving and digital services.
PERFORM – We create sustainable value
We aim to create value that is sustainable. Our business is
grounded in what we do best – delighting our customers with
fascinating vehicles. Here, the attainment of our profitability
targets and the maintenance of a solid cash flow remain top
priorities for the short and medium term. Together with our
partners, we seek to develop new technologies and share the
costs of development activities. We want to continue to grow
profitably and expand our leading position in all the sectors in
which we operate worldwide.
TRANSFORM – Reinvent ourselves
Our transformation is a long-term process of adapting the
implementation of our structures and processes in cooperation
with our employees. We have a workforce that is agile and will-
ing to learn, and this facilitates the development of the skills
needed to face new requirements. Our corporate culture cre-
ates the foundation for the outstanding innovative capability
displayed by our employees. We put diversity into practice, and
integrity is our inner compass. The principle of integrity guides
our actions and our relationships with our business partners.
With our sustainable business strategy, we are shaping
the transformation of the automotive industry from a posi-
tion of leadership in a sustainable, customer-focused and
innovative manner to safeguard our economic success.
56 A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY
In the area of automated driving Daimler Trucks initially aims to
focusing on Hub2Hub transport in SAE Level 4 mode on high-
ways in the United States. The possibility of not having to use a
driver will lead to cost savings, which in turn will result in a via-
ble business model. The Daimler Trucks Autonomous Technol-
ogy Group, which brings together all of the expertise and activ-
ities in the field of automated truck operation, is consistently
moving ahead toward series production of automated trucks.
Torc Robotics, a company in which we acquired a majority
interest in 2019, is now part of the Autonomous Technology
Group. Daimler Trucks and Torc Robotics have now begun
developing SAE Level 4 technologies for testing on roads in the
United States.
Partnerships
The competition for the best solutions in the automotive indus-
try will continue to be decided by who has the best access to
the latest technologies and the ability to provide sufficient cap-
ital and resources. As a result, partnerships will hold the key to
leadership for all automakers. We have recently entered into a
variety of partnerships. For example, we are developing auton-
omous driving systems with BMW and systems for automated
trucks with Torc Robotics, and we are also cooperating with
the battery material specialist Sila Nanotechnologies. In addi-
tion, we have teamed up with BMW and Geely to offer mobility
services in China. Geely is a Daimler shareholder from China
with whom we have established a 50:50 joint venture to fur-
ther develop and operate the smart brand globally as a manu-
facturer of all-electric vehicles. In order to more firmly estab-
lish electric mobility on the market, we have teamed up with
several other European manufacturers to create a joint venture
known as IONITY. Through this company, we are moving for-
ward with the creation of a full-coverage, high-power charging
network for European highways.
Culture and integrity
Especially in times of change and upheaval, we need to have
values that offer us guidance. We also need to develop skills
that make us faster and more agile and enable us to speed
up our pace of innovation. The continuation of our “Leadership
2020” program as “Leadership 20x” ensures that we can pro-
mote the development of such skills. We rely on the high
degree of motivation among our employees, with whom we
want to actively drive forward the transformation of our indus-
try. Daimler stands for diversity and promotes integrity. As a
company that operates around the globe, we stand for toler-
ance, openness, trust and fairness. Integrity is one of our key
corporate values and a central element of our corporate cul-
ture. New technologies and business models offer tremendous
opportunities, but at the same time they pose questions – for
example, with regard to ethical and legal topics. Our inner val-
ues and attitudes are put to the test when such issues arise.
The further development of the Technical Compliance System
and the compliance system for data is intended to ensure that
we can provide support with regard to new topics from the
beginning, provide the maximum possible clarity and avoid
mistakes.
A | TO OUR SHAREHOLDERS | OBJECTIVES AND STRATEGY 57
A.10
Investments in property, plant and equipment
Amounts in billions of euros
2018
2019 2020 – 2021
Daimler Group
Mercedes-Benz Cars & Vans
Daimler Trucks & Buses
Daimler Mobility
Corporate
7.5
6.2
1.2
0.06
0.1
7.2
5.9
1.1
0.09
0.1
13.8
11.3
2.3
0.1
0.1
A.11
Research and development expenditure
Amounts in billions of euros
2018
2019 2020 – 2021
Daimler Group
Mercedes-Benz Cars & Vans
Daimler Trucks & Buses
9.1
7.6
1.5
9.7
8.1
1.7
18.8
15.5
3.3
Extensive investment in the Group’s future
In order to utilize the opportunities offered by the international
automotive markets and to help actively shape the coming
transformation of mobility, we will continue to invest substan-
tially in new products, innovative technologies and state-of-
the-art production facilities in the coming years. One focus of
our efforts will be on the future-oriented fields of digitization,
autonomous driving and electric mobility. We plan to invest
approximately €14 billion in property, plant and equipment in
2020 and 2021, as well as nearly €19 billion in research and
development projects. We will therefore continue to maintain a
high level of investment in order to safeguard the future of our
company. The decrease in investment volume from the 2019
figure is in part because we will be making much more efficient
use of our financial resources and will also focus more strongly
on issues that are important for the future of the Group. During
the year under review, we also entered into several partner-
ships in areas that will play a key role in the future of mobility.
This will enable us to limit our own expenditure even as we
ensure our access to new technologies. Over the medium and
long term, we expect investment and expenditure on research
and development to be reduced, step by step, to below the
extraordinarily high levels of recent years. This should be
achieved in part by reducing the number of vehicle architec-
tures and platforms at Mercedes-Benz and a decrease in their
complexity, in addition to lower investment in traditional drive
systems. A.10 A.11
Investment in property, plant and equipment will mainly be
applied to prepare for the production of our new models.
Other focal points will be the realignment of our manufacturing
facilities in Germany, increased local production in the growth
markets and the development of a global production network
for electric vehicles and batteries.
Most of our expenditure for research and development will
flow into new products. Key individual projects include the
successor models of the C-Class and the S-Class and new
vehicles from our EQ electric mobility brand. Other key areas
at our automotive divisions include innovative drive-system
and safety technologies, the connectivity of our products and
the further development of automated and autonomous driv-
ing. Our plans also call for substantial funds to be invested in
particular in our comprehensive electric mobility offensive at
all of our automotive divisions.
B
Management
Report
Daimler once again achieved high levels of unit sales and revenue in 2019 in
a challenging environment. Our numerous new products and innovative services
contributed to this. At the same time, however, earnings and the free cash
flow decreased significantly. Within the framework of our sustainable corporate
strategy, we are vigorously pushing forward with the transformation of our
businesses for a CO2-neutral future. To achieve this, the application of substan-
tial funds is required, reducing our earnings in the year under review and also
in the future. Against this background, we have taken comprehensive measures
to strengthen our financial position again.
B | COMBINED MANAGEMENT REPORT | CONTENTS 59
B | Combined Management Report
Corporate Profile
Business model
Portfolio changes and strategic partnerships
Important events
Performance measurement system
Financial performance measures
Corporate governance statement
Economic Conditions and Business
Development
The world economy
Automotive markets
Business development
Profitability
Revenue and EBIT
Statement of income
Dividend
Net operating profit
Value added
Liquidity and Capital Resources
Principles and objectives of financial management
Cash flows
Contingent liabilities and other financial obligations
Investment
Refinancing
Credit ratings
Financial Position
Daimler AG
(condensed version according to HGB)
Profitability
Financial position, liquidity and capital resources
Risks and opportunities
Outlook
60
60
62
62
63
63
64
65
65
66
67
70
70
74
75
75
75
77
77
78
82
82
83
85
86
89
89
90
92
92
Sustainability and Integrity
Sustainability at Daimler
Research and development
Innovation and safety
Environmental protection
The workforce
Social responsibility
Integrity, compliance and legal responsibility
Overall Assessment of the
Economic Situation
Events after the Reporting Period
Remuneration Report
Principles of Board of Management remuneration
Board of Management remuneration in
financial year 2019
Commitments upon termination of service
Remuneration of the Supervisory Board
Takeover-Relevant Information
and Explanation
Risk and Opportunity Report
Risk and opportunity management system
Risks and opportunities
Industry and business risks and opportunities
Company-specific risks and opportunities
Financial risks and opportunities
Legal and tax risks
Non-financial risks
Overall assessment of the risk
and opportunity situation
Outlook
The world economy
Automotive markets
Unit sales
Revenue and earnings
Free cash flow and liquidity
Dividend
Investment
Research and development
Overall statement on future development
93
93
93
95
100
102
103
105
106
107
108
108
118
128
130
132
135
135
137
137
142
144
146
149
149
150
150
151
151
152
153
153
153
154
154
s
t
n
e
t
n
o
C
i
d
e
n
b
m
o
C
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
s
n
o
i
s
i
v
i
D
e
h
T
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
t
r
o
p
e
R
l
i
a
c
n
a
n
F
-
n
o
N
i
d
e
t
a
d
i
l
o
s
n
o
C
s
t
n
e
m
e
t
a
t
S
l
i
a
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
r
u
F
60 B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE
Corporate Profile
Business model
Daimler can look back on a tradition covering more than 130
years – a tradition that goes back to Gottlieb Daimler and Carl
Benz, the inventors of the automobile, and features pioneering
achievements in automotive engineering. Today, the Daimler
Group is a globally leading vehicle manufacturer with an out-
standing range of premium cars, trucks, vans and buses. Its
product portfolio is rounded out by a range of customized
financial services and mobility services. Daimler’s goal is to con-
tinue playing a leading role in the development of products
and services for the future of mobility. The automotive industry
is in the process of a fundamental transformation, and we
intend to play a major role in actively shaping that change.
Daimler AG is the parent company of the Daimler Group and
its headquarters are in Stuttgart. With the new corporate
structure, effective as of January 1, 2020, the Group’s business
operations under the umbrella of Daimler AG are no longer
managed in five divisions, but in three. Mercedes-Benz AG is
responsible for the business of Mercedes-Benz Cars & Vans
and Daimler Truck AG combines the activities of Daimler Trucks
& Buses. Daimler Financial Services, which had already been
legally independent for many years, was renamed as Daimler
Mobility AG in July.
With the new structure, Daimler AG carries out the functions
of steering and governance and provides services for the com-
panies of the Group. As the parent company, it also defines
the Group’s strategy, makes strategic decisions for business
operations, and ensures the effectiveness of organizational,
legal, and compliance-related functions throughout the Group.
B.01
Group revenue by division
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Mobility
51.9%
22.2%
8.0%
2.6%
15.3%
We have used the previous structure of five divisions in our
report on financial year 2019, analogously to the reports for the
first three quarters of the year. The new reporting structure
with three divisions will be used as of the first quarter of 2020.
The management reports for Daimler AG and for the Daimler
Group are combined within this annual report.
With its strong brands, Daimler is active in nearly all the coun-
tries of the world. The Group has production facilities in
Europe, North and South America, Asia and Africa. The global
networking of research and development activities as well
as of production and sales locations gives Daimler advantages
in the international competitive field and also offers additional
growth opportunities.
In 2019, Daimler increased its revenue by 3% to €172.7 billion.
The Group’s five divisions contributed to this total as follows:
Mercedes-Benz Cars 52%, Daimler Trucks 22%, Mercedes-Benz
Vans 8%, Daimler Buses 3% and Daimler Mobility 15%. At the
end of 2019, Daimler employed a total workforce of more than
298,000 people worldwide.
The products supplied by the Mercedes-Benz Cars division
comprise a broad spectrum of premium vehicles of the
Mercedes-Benz brand, the Mercedes-AMG high-performance
brand and the Mercedes-Maybach luxury brand. These
vehicles range from compact models to a highly varied port-
folio of off-road vehicles, roadsters, coupes and convertibles,
and to the S-Class luxury sedans. The product range is rounded
out by the Mercedes me brand and the high-quality small
cars of the smart brand. In 2016, we launched the new EQ
(Electric Intelligence) brand for all of our activities related to
electric mobility. The most important markets for Mercedes-
Benz Cars in 2019 were China with 29% of unit sales, Germany
(14%), the other European markets (28%), the United States
(13%), South Korea (3%) and Japan (3%). The Mercedes-Benz
Cars division is continuously refining its flexible production
network consisting of a total of more than 30 locations on four
continents. In particular, we are preparing our worldwide pro-
duction network to meet the requirements of electric mobility.
B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE 61
As the world’s largest manufacturer of trucks above 6 metric
tons gross vehicle weight, Daimler Trucks develops and pro-
duces vehicles in a global network under the brands Mercedes-
Benz, Freightliner, Western Star, FUSO and BharatBenz. The
division’s 30 production facilities are located in the NAFTA region
(17), Europe (7), Asia (4) and South America (2). In China,
Beijing Foton Daimler Automotive Co., Ltd. (BFDA), a joint ven-
ture with our Chinese partner Beiqi Foton Motor Co., Ltd.,
has been producing trucks under the Auman brand name since
2012. Daimler Trucks’ product range includes light-, medium-
and heavy-duty trucks for long-distance, distribution and con-
struction-site haulage, as well as special vehicles that are
used mainly in municipal applications. Due to close links in terms
of production technology, the division’s product range also
includes buses of the Thomas Built Buses and FUSO brands.
The activities related to electric mobility have been combined
at the E-Mobility Group since 2018. The division offers and tests
locally emission-free electric drive systems across its entire
product range. Daimler Trucks’ most important sales markets in
2019 were the NAFTA region with 41% of unit sales, Asia with
28% and the EU30 region (European Union, Switzerland and
Norway) with 16%.
Mercedes-Benz Vans is a global supplier of a complete port-
folio of vans and related services. The division’s products
range from the Citan small van with a gross vehicle weight of
1.8 metric tons to the Sprinter large van with a gross vehicle
weight of up to 5.5 metric tons. The models offered in the com-
mercial segment comprises the Sprinter large van, the Vito
mid-size van (marketed as the “Metris” in the United States) and
the Citan urban delivery van. In the segment for private cus-
tomers, Mercedes-Benz Vans offers the V-Class multipurpose
vehicle, the Marco Polo travel vans and recreational vehicles,
and the X-Class mid-size pickup. As a result of the review and
prioritization of the product portfolio, production of the X-Class
is to be discontinued at the end of May 2020. Our eDrive activi-
ties demonstrate how systematically we are progressing with
the development of alternative drive systems in all model series.
The Mercedes-Benz Vans division has manufacturing facilities
in Germany, Spain, the United States, Argentina, China and Rus-
sia. The division is active in the Chinese market through the
joint venture Fujian Benz Automotive Ltd. Production of the Citan
is part of the strategic alliance with Renault-Nissan-Mitsubishi.
The most important markets for vans are the EU30 region, which
accounted for 68% of unit sales in the year under review, the
NAFTA region (13%) and Asia (9%).
The Daimler Buses division with its Mercedes-Benz and Setra
brands is the industry leader for buses above 8 metric tons
in its most important traditional core markets: the EU30 region,
Brazil, Argentina and Mexico. The division’s product range
comprises city and intercity buses, touring coaches and bus
chassis. The largest of the division’s 14 production plants are
located in Germany, France, Spain, Turkey, Argentina, Brazil,
Mexico and India. In 2019, Daimler Buses generated 68% of
its revenue in the EU30 region and 15% in Latin America (exclud-
ing Mexico). Whereas we mainly sell complete buses in Europe,
our business in Latin America, Mexico, Africa and Asia focuses
on the production and distribution of bus chassis.
The Daimler Mobility division supports the sales of the Daimler
Group’s automotive brands with tailored financial services.
These services range from leasing, financing and insurance
solutions to commercial fleet management services. In
addition, the division is a strategic investor in mobility services
for ride hailing, multimodal platforms, car sharing, parking
and charging. The mobility services of the “YOUR NOW” joint
ventures between Daimler and BMW have been consolidated
in three units as of January 1, 2020: FREE NOW & REACH NOW,
SHARE NOW, PARK NOW & CHARGE NOW. The mobility eco-
B.02
Daimler Group structure until 31.12.2019
Mercedes-Benz
Cars
Daimler Trucks
Mercedes-Benz
Vans
Daimler Buses
Daimler Mobility
Revenue
€93.9 billion
€40.2 billion
€14.8 billion
€4.7 billion
€28.6 billion
Employees
152,048
83,437
21,346
17,960
12,680
Brands
62 B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE
system is rounded out by flexible-use services from Daimler
Mobility such as Mercedes-Benz Rent (rental vehicles) and
Mercedes me Flexperience (a car-on-demand solution). During
the year under review, Daimler Mobility financed or leased
approximately 50% of the vehicles sold by the Group. The divi-
sion’s contract volume of €162.8 billion covers more than
5.4 million vehicles. Daimler Mobility operates in 40 countries
and employs approximately 13,000 people.
Daimler is active in the global automotive industry and related
sectors through a broad network of subsidiaries, associated
companies and partnerships. The statement of investments of
Daimler AG in accordance with Section 313 of the German
Commercial Code (HGB) can be found in E Note 41 of the
Notes to the Consolidated Financial Statements.
Portfolio changes and strategic partnerships
By means of targeted investments and future-oriented partner-
ships, we strengthened our core business and made use of
additional growth potential in 2019. The most important projects
are briefly described below.
Daimler and BMW Group are investing more than €1 billion
in a joint mobility-services provider
After the successful closing of the joint venture agreement, the
two companies held a joint press conference in February 2019
where they stated that they plan to invest more than €1 billion
in the expansion and the closer integration of their existing
services in the areas of ride hailing, multimodal platforms, car
sharing, parking and charging. In doing so, they will system-
atically utilize the opportunities offered by digitization, shared
services and customers’ increasing mobility needs. In the
period from February until the end of 2019, 588 million trans-
actions were conducted through the YOUR NOW joint-venture
group. The products and services of the joint ventures have
been further systematically focused on customer requirements
and consolidated into three pillars: 1. FREE NOW & REACH
NOW. 2. SHARE NOW. 3. PARK NOW & CHARGE NOW. The
establishment of a new parent company on January 1, 2020
supports the efficient management of these three pillars.
Daimler and Geely Holding establish a global joint venture
for the further development of smart
In March 2019, Daimler AG and Zhejiang Geely Holding Group
announced the establishment of a globally oriented 50:50 joint
venture. Its aim is to turn smart, a pioneer of urban mobility,
into one of the leading brands for electric mobility. The joint-
venture agreement stipulates that the next generation of
electric smart models will be manufactured in a new electric
vehicle factory in China that will be especially built for this
purpose. Global sales are scheduled to begin in 2022.
Daimler Trucks acquires a majority interest in Torc
Robotics
In March 2019, Daimler Trucks and Torc Robotics, a pioneer
in the area of autonomous driving systems, announced that they
are to form a partnership for the marketing of automated
trucks in the United States. The two companies agreed that
Daimler Trucks and Buses US Holding LLC, a subsidiary of
Daimler Truck AG, would acquire a majority of the shares in
Torc Robotics in order to link the businesses in a way that
goes far beyond a conventional manufacturer-supplier relation-
ship. Automated trucks have great potential to meet globally
growing transportation needs by improving efficiency and further
increasing safety. Daimler Trucks and Torc Robotics augment
one another perfectly with regard to resources, expertise and
capabilities. The acquisition of the majority interest was con-
cluded in the third quarter of 2019.
Daimler AG and BMW Group launch a long-term develop-
ment partnership for automated driving
In July 2019, Daimler and BMW Group began to cooperate on
automated driving. The two companies signed an agreement
governing their long-term strategic collaboration in this area.
Daimler and BMW Group plan to jointly develop the next
generation of technology for driving assistance systems and
automated driving on highways, as well as for automated
parking functions. Moreover, the partners intend to conduct
talks concerning a possible expansion of their partnership
to include higher levels of automation in urban environments.
This underscores the long-term, sustainable nature of the
partnership, which will develop into a scalable platform for
automated driving. The partnership is open to other auto-
makers and technology partners. In addition, the results of
the partnership are to be offered to other OEMs for licensing
purposes. Among other things, the partnership aims to quickly
launch the technology on the market. The first systems are
scheduled to become available for privately owned cars in 2024.
Each company will individually implement the results of the
development cooperation in its own products. More than 1,200
experts will probably work in this partnership, some of them
in mixed teams. Their tasks will include the design of a scalable
architecture for driver-assistance systems including sensors,
the creation of a joint computer center for the storage, admin-
istration and processing of data, and the development of
various functions and software.
B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE 63
Important events
Performance measurement system
Value-based management
The performance measurement system used at Daimler is
designed to ensure that our investors’ interests and expectations
are taken into account within the framework of a value-based
management system. Value added shows the extent to which
the Group and its divisions achieve or exceed the return
requirements of the investors, thus creating additional value.
Value added is derived from the financial value drivers which,
due to their direct relationship to ongoing business operations,
are utilized as financial performance indicators for the periodic
assessment of the performance of the Group and its divisions.
In this sense, value added can be calculated as the difference
between the measure of operating profit (EBIT or net operating
profit) and the cost of capital of the average net assets.
B.03
The return on net assets (RONA) is calculated from the ratio of
EBIT to net assets. Value is created for our shareholders when
RONA exceeds the cost of capital. The required rate of return
on net assets, and hence the cost of capital rate, is derived
from the minimum rates of return that equity investors and
lenders expect on their invested capital. During the year
under review, the cost of capital rate of the Group remained
unchanged at 8% after taxes. For the automotive divisions,
the cost of capital rate amounted to 12% before taxes; for Daimler
Mobility, a cost of equity of 13% before taxes was applied.
B.04
The quantitative development of value added and the related
financial performance measures is explained in the “Profitabil-
ity” chapter. E pages 75 f
B.03
Calculation of value added
Value
added
=
Profit
measure
–
Net assets
×
Cost of
capital (%)
Cost of capital
A large majority of the Daimler shareholders vote for the
new corporate structure with Daimler AG as the parent
company
At the Annual Shareholders’ Meeting in Berlin, a large majority
of the shareholders of Daimler AG voted in favor of restruc-
turing of the Daimler Group. The new corporate structure took
effect when the hive-downs were entered in the commercial
register. As of October 31, 2019, today’s Mercedes-Benz AG is
responsible for the previous divisions Mercedes-Benz Cars
and Mercedes-Benz Vans, while Daimler Truck AG is responsible
for Daimler Trucks and Daimler Buses. Daimler Financial
Services AG, which was already a legally independent company,
was renamed as Daimler Mobility AG on July 23, 2019. Like
Daimler AG and Daimler Mobility AG, the two new wholly owned
subsidiaries are German stock corporations subject to code-
termination with their headquarters in Stuttgart.
Changes in the Board of Management
After more than 13 years as Chairman of the Board of Manage-
ment of Daimler AG and Head of Mercedes-Benz Cars, Dieter
Zetsche stepped down from his position at the conclusion of
the Annual Shareholders’ Meeting in 2019. Following a two-
year cooling-off period, the Supervisory Board intends to nomi-
nate Dieter Zetsche for election to the Supervisory Board at
the Annual Meeting 2021. Manfred Bischoff will recommend that
Dieter Zetsche succeed him as Chairman of the Supervisory
Board of Daimler AG.
At the conclusion of the Annual Shareholders’ Meeting, Ola
Källenius took over as Chairman of the Board of Management
of Daimler AG and Head of Mercedes-Benz Cars. Ola Källenius
joined the Group in 1995. After holding various management
positions in Germany and abroad, he was appointed to the
Board of Management of Daimler AG with responsibility for
Mercedes-Benz Cars Marketing & Sales effective January 2015.
In January 2017, Ola Källenius took over Group Research and
Mercedes-Benz Cars Development. Markus Schäfer succeeded
him in this position on the Board of Management of Daimler AG
at the conclusion of the Annual Shareholders’ Meeting on May
22, 2019. On June 1, 2019, Markus Schäfer also took over
responsibility for Mercedes-Benz Cars global procurement.
In addition, Harald Wilhelm, who was appointed to the Board
of Management of Daimler AG on April 1, 2019, took over
responsibility for Finance & Controlling and Daimler Financial
Services (Daimler Mobility since July 2019) at the conclusion
of the Annual Shareholders’ Meeting. Harald Wilhelm was pre-
viously the Chief Financial Officer of Airbus and a member of
its Executive Committee. He succeeded the long-serving Board
of Management Member for Finance Bodo Uebber, who reques-
ted that his contract not be extended beyond its termination
date of December 2019 and stepped down at the conclusion
of the Annual Meeting.
64 B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE
Financial performance measures
Profit measure
The measure of operating profit at the divisional level is EBIT
(earnings before interest and income taxes). EBIT thus reflects
the divisions’ responsibility for profit and loss. EBIT that is
calculated at the Group level takes into account centrally man-
aged matters and eliminations. In order to provide a more
transparent presentation of our ongoing business, we will addi-
tionally calculate and report adjusted EBIT for both the Group
and the divisions from financial year 2020 onwards. The adjust-
ments include individual items if they lead to material effects
in a reporting period. These individual items relate in particular
to legal proceedings and related measures, restructuring mea-
sures and M&A matters. Group EBIT minus the centrally man-
aged income taxes equals net operating profit. B.20 page 75
Return on sales
As one of the main factors influencing value added, return on
sales is of particular importance for assessing the automotive
divisions’ profitability. Return on sales is the ratio of EBIT to
revenue, whereby unit sales are the primary source of revenue.
The measure of profitability for Daimler Mobility is not return
on sales but return on equity (the ratio of EBIT to average equity
on a quarterly basis). On the basis of adjusted EBIT, we will
report an adjusted return on sales (ROS) for the automotive
divisions and an adjusted return on equity (ROE) for Daimler
Mobility starting in the 2020 financial year.
Net assets
All assets, liabilities and provisions for which the automotive
divisions are responsible in day-to-day operations are allo-
cated to those divisions. Performance measurement at Daimler
Mobility is implemented on an equity basis. Net assets at the
Group level include the net operating assets of the automotive
divisions and the equity of Daimler Mobility, as well as assets
and liabilities from income taxes and other reconciliation items
which cannot be allocated to the divisions. Average annual net
assets are calculated on the basis of average quarterly net
assets. E page 76
Cash flow
A change in net assets – for example as a result of investments –
generally leads to the application or release of liquid funds.
Along with earnings, net assets thus also have a direct effect
on the cash flow. Of outstanding importance for the financial
strength of the Daimler Group is the free cash flow of the indus-
B.04
Cost of capital
In percent
Group, after taxes
Industrial business, before taxes
Daimler Mobility, before taxes
2019
2018
8
12
13
8
12
13
trial business, which comprises the cash flows at the auto-
motive divisions and the cash flows from interest, taxes and
other reconciliation items that cannot be allocated to the divi-
sions. The operating cash flow before interest and taxes
(CFBIT) for the automotive divisions is derived from EBIT and
the change in net assets. The cash conversion rate (CCR)
is the ratio of CFBIT to EBIT over a period of time and is an
important measure for cash-flow management. In order
to provide a more transparent presentation of our ongoing
business, we will additionally calculate and report the
adjusted free cash flow of the industrial business and the
adjusted CFBIT of the automotive divisions from financial
year 2020 onwards. The adjustments include individual items
if they lead to material effects in a reporting period. These
individual items relate in particular to legal proceedings and
related measures, restructuring measures and M&A matters.
On the basis of adjusted CFBIT and adjusted EBIT, we will report
an adjusted cash conversion rate (adjusted CCR) for the auto-
motive divisions from financial year 2020 onwards.
Key performance indicators
The key financial indicators for measuring the operating financial
performance of the Daimler Group, in addition to EBIT and
revenue, are the free cash flow of the industrial business, invest-
ment, and expenditure for research and development. In addi-
tion, return on equity and new business are the key performance
indicators for Daimler Mobility. As of financial year 2020,
adjusted return on equity will replace return on equity as the
key performance indicator for Daimler Mobility.
In addition to the financial indicators, we also use various non-
financial indicators to help us manage the Group. Of particular
importance in this respect are the unit sales of our automotive
divisions, which we use as the basis for our capacity and
human resources planning. The importance of the absolute
number of employees as a performance indicator has been
reduced, particularly in view of the increasing cooperation with
partners in the form of partnerships and joint ventures. For
this reason, the number of employees is no longer considered
to be a key performance indicator.
Details of the development of non-financial performance indi-
cators can be found in the chapters “Economic Conditions and
Business Development” and “Non-Financial Report.”
E pages 65 ff and pages 196 ff
Corporate governance statement
The Declaration on Corporate Governance pursuant to Section
289f and Section 315d of the German Commercial Code
(HGB), combined with the Corporate Governance Report, can
be found in this Annual Report on E pages 180 ff and can
also be viewed on the Internet at w daimler.com/corpgov/en.
Pursuant to Section 317 Subsection 2 Sentence 6 of the
German Commercial Code (HGB), the purpose of the audit of
the statements pursuant to Section 289f Subsections 2 and
5 and Section 315d of the HGB is limited to determining whether
such statements have actually been provided.
B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT 65
Economic Conditions and Business Development
The world economy
During the year under review, the world economy achieved real
growth of only slightly above 2.5%. This was much weaker
than in the previous year and was the first time since 2016 that
it dropped below 3%. B.05 The slowdown affected almost
all regions, but to different degrees. Growth in global trade also
slowed down considerably, a development that noticeably
impacted export-dependent economies in particular.
The industrialized countries were unable to maintain the dynamic
economic growth that they had attained in the two previous
years. This was also the case with the US economy. Following
a robust first quarter, economic growth slowed considerably
later in the year, but remained solid with approximately 2.3%
recorded for 2019 as a whole. While private consumption
continued to be robust, business investment weakened substan-
tially as the year progressed. This was due, in part, to the
fading boost from tax cuts as well as ongoing insecurity regard-
ing further escalation of the trade conflict with China. Economic
development slackened even more in the euro zone. The weak
global demand, especially in China, as well as the trade dispute
between the United States and China and the risk of a no-deal
withdrawal of the UK from the European Union, had an espe-
cially negative impact on the manufacturing sector. As a result,
economic growth in the euro zone dropped to just over 1%, even
though the services sector and private consumption remained
resilient. Because of its pronounced dependence on industrial
production and foreign trade, the German economy only grew
by about 0.6%. The ongoing Brexit uncertainty and its dampening
effect on investments caused the economy of the United King-
dom to slow down to a moderate pace of 1.3%. Slower export
growth and continued low investments are also impacting the
Japanese economy, which grew at approximately 1% or about
the same as in the previous year.
China’s economic growth continued to lose momentum last
year as a result of a weakening of both domestic and export
demand. At just 6.1%, growth for the year as a whole was
noticeably lower than in 2018. As expected, the other econo-
mies in Asia were unable to disconnect themselves from the
slowdown in world trade and the weakening of China’s eco-
nomic growth. As a result, these economies grew much more
slowly than in the previous year. The slowdown was especially
pronounced in India, where economic growth dropped to
around 5% and thus to the lowest level in ten years. South
America’s hopes for a noticeable economic rebound were not
fulfilled. The ongoing and deep-seated crisis in Argentina and
the continued rather disappointing development in Brazil have
slowed down economic growth in the entire region. Growth
was also lower than in the prior year in Central and Eastern
Europe. This was mainly due to the severe economic crisis in
Turkey as well as the substantial decline in the growth of the
Russian economy. The much lower average price of oil over the
year compared to the prior year ensured that economic growth
continued to be rather weak in the Middle East as well. All in
all, the growth of about 4% that was recorded in the emerging
markets was significantly below the prior-year rate.
Currency exchange rates remained volatile in this heteroge-
neous growth environment. Against the US dollar, the euro
moved between $1.08 and $1.16 during the year. At the end of
2019, the euro was around 2% weaker than at the end of 2018.
The range of fluctuation of the Japanese yen against the euro
was 116 to 128. Year-on-year, at the end of 2019, the euro had
depreciated by about 3% against the yen. At the end of 2019,
the value of the British pound was about 5% higher than at the
end of the previous year. The euro rose by almost 2% against
the Brazilian real and by about 10% against the Turkish lira.
However, it depreciated considerably against the ruble, losing
about 12% of its relative value.
B.05
Economic growth
Gross domestic product, growth rates in %
2018
2019
6
5
4
3
2
1
0
-1
-2
Total
Europe
NAFTA
Asia
South
America
Source: IHS Markit, own calculations
66 B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT
Automotive markets
The global car market contracted by approximately 5% during
the year under review. The Western European sales market
posted stable growth and even the US market almost remained
at the previous year’s level, declining by only 1%. Global weak-
ness in demand was mainly due to the continued unfavorable
development of the Chinese market, which contracted by
nearly 10% and was thus much weaker than in 2018. B.06
All in all, car sales were relatively stable in Europe. Within West-
ern Europe, the German market expanded slightly by about 5%.
The small increase of just under 2% that was recorded in France
meant that sales there remained at about the prior-year level.
Demand was rather weak in the UK, however, with sales falling
by about 2%. Sales markets in Central and Eastern Europe were
generally slightly weaker than in the previous year. Whereas
car sales in the Central and Eastern European markets of the
EU remained robust and showed some growth, they declined
slightly in Russia. However, the main reason for the region’s
sales decrease was the double-digit drop recorded by the Turk-
ish market.
Thanks to a still comparatively favorable economic environ-
ment, the market volume for cars and light trucks in the United
States once again reached a high level with sales of around
17 million units. In comparison with the previous year, this
corresponds to a slight drop of just over 1%. The segment
shift toward pickups and SUVs continued, while conventional
sedans saw demand decline significantly once again.
B.06
Global automotive markets
Unit sales growth rates 2019 in %
(some numbers are preliminary)
Passenger cars
Commercial vehicles2
15
10
5
0
-5
-10
Total
Europe
NAFTA1
Asia
South
America1
1 Cars segment includes light trucks
2 Medium- and heavy-duty trucks
Source: German Association of the
Automotive Industry (VDA),
various institutions
The weakness of the Chinese car market continued during the
year under review. The drop in demand of nearly 10% was even
larger than in 2018. This decrease is attributed mainly to the
noticeable slowdown of economic growth, the insecurity of car
buyers due to the ongoing trade dispute with the United
States, and the continued negative aftereffects of the market
stimulus measures of previous years. However, the premium
segment, which is especially relevant for Mercedes-Benz,
proved to be robust and once again grew substantially.
Meanwhile, car demand declined slightly in Japan. The small
drop for the year as a whole was primarily due to the weak
fourth quarter, when sales declined as a result of the sales-tax
increase in early October. The Indian market decreased sharply
due to the unexpectedly weak development of the country’s
economy.
Demand for medium-duty and heavy-duty trucks devel-
oped very disparately in the markets relevant to our opera-
tions. Despite the slackening of economic growth, the market
in the NAFTA region, which was already at a very high level,
expanded by another 8% in classes 6 to 8, although this dyna-
mism weakened considerably in the second half of the year.
The truck market in the EU30 region (the European Union,
Switzerland and Norway) remained relatively robust, given the
region’s rather weak macroeconomic performance. However,
demand shifted considerably as the year progressed. A regula-
tory change that took effect in mid-June caused earlier-than-
planned purchases in the first half of 2019 and an unusually
large number of new registrations. In contrast, the market
development was much weaker in the second half of the year.
Despite this, the market was at about the prior-year high level
during the year as a whole. Although economic growth was
rather disappointing in Brazil, the dynamic recovery of the
country’s truck market continued with expansion of 34%. In
Turkey, the economic crisis caused the truck market to con-
tract significantly at a double-digit rate. Truck demand also
decreased somewhat in Russia due to the weak economic
situation.
The Japanese market for light-, medium- and heavy-duty trucks
was influenced during the year by regulatory changes and
a sales-tax increase in early October. As a result, demand
decreased especially in the last few months of the year. How-
ever, unit sales during the year as a whole were at about
the same level as in 2018. The market in Indonesia declined
substantially in 2019. The Indian market for medium- and
heavy-duty trucks developed very poorly and contracted at a
clear double-digit rate. In China, demand for heavy-duty
trucks remained stable at an unusually high level.
B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT 67
Demand for vans continued to develop positively in the EU30
region in 2019. Here, market volume in the combined segment
for mid-size and large vans increased by 4%, while demand for
small vans rose by 6%. The market for mid-size pickups
remained at the prior-year level. In Germany, overall sales in
the combined segment for mid-size and large vans increased
by 8%. Demand for large vans in the United States expanded
significantly. Demand in the market for mid-size vans that we
address in China was slightly lower than in the previous year.
Driven by developments in Brazil, the market volume for large
vans in Latin America rose substantially from the low level
of the previous year.
The market volume for buses in the EU30 region was signifi-
cantly above the high level of the previous year. The situation
in Latin America (excluding Mexico) improved considerably due
to the noticeable market recovery in Brazil, although growth in
the region was slowed by a sharp market contraction in Argen-
tina. As a result of the ongoing difficult economic situation in
Turkey, demand for buses once again decreased significantly
there compared with 2018.
Business development
Unit sales
Daimler sold a total of 3.34 million vehicles in 2019 (2018:
3.35 million). As a result, the Group failed to achieve its goal
of slightly increasing its unit sales. Unit sales were slightly
lower than expected at Mercedes-Benz Cars (+0%), Daimler
Trucks (-6%), Mercedes-Benz Vans (+4%) and Daimler Buses
(+6%).
The Mercedes-Benz Cars division sold a total of 2,385,400
vehicles in 2019 despite difficult overall conditions, thus once
again slightly exceeding the previous year’s record (2018:
2,382,800). With unit sales of 2,278,300 (2018: 2,252,800)
vehicles, the Mercedes-Benz brand was once again the stron-
gest-selling premium brand in the automobile industry. We are
the number one in the premium segment in Germany and sev-
eral other key European markets, as well as in South Korea,
Australia, India, Canada and Japan. In addition, we once again
improved our position in China with a new sales record.
The A-Class and B-Class models were particularly successful
in the year under review. Unit sales of these models, including
the CLA and the CLA Shooting Brake, increased by 29% to a
total of 527,000 vehicles. Sales of C-Class models decreased
by 8% to 439,600 sedans, wagons, coupes and convertibles.
The E-Class continued to perform very well on the market. At
418,100 vehicles, total unit sales of the E-Class did not, how-
ever, achieve the high level of the previous year. With sales of
71,300 units, the S-Class sedan continues to be the world’s
best-selling luxury sedan. In total, we sold 75,400 vehicles in
this market segment in 2019 (2018: 83,800). Our unit sales in
the SUV segment were impacted by the model changes for the
GLE and the GLS. Demand for the new models was much
higher than the actual number of vehicles available. Unit sales,
however, were at the very high level of 789,800 (2018:
829,200) vehicles. Sales of our sports cars rose by 48% to
28,400 units; this increase was largely due to the market suc-
cess of our Mercedes-AMG GT models. B.07
Mercedes-Benz Cars sold a total of 992,200 vehicles in Europe
in 2019 (2018: 982,700). Sales growth in Germany (+4%) was
accompanied by decreases in Italy (-1%) and Spain (-5%). Unit
sales in the volume markets of the United Kingdom and France
remained at the levels of the previous year. The Mercedes-Benz
Cars division continued to be very successful in China during
the year under review, with unit sales there increasing by 2% to
694,200 vehicles. We also set new records for unit sales in
other Asian markets, for example in South Korea (+18%). At
368,900 vehicles, unit sales in the NAFTA region were lower
than the high level of the previous year. Decreases were
recorded in the United States (-4%) as well as in Canada (-12%).
The sales development for the smart brand during the year
under review was affected by the complete changeover of the
smart to all-electric drive by the year 2020. The number of cars
with combustion engines offered by the brand was therefore
gradually reduced throughout the year. All in all, the smart brand
sold a total of 107,100 fortwo and forfour models in about 40
markets worldwide in 2019 (2018: 130,000).
E pages 158 ff
B.07
Unit sales structure of Mercedes-Benz Cars
A-/B-Class
C-Class
E-Class
S-Class
SUVs*
Sports Cars
smart
* including GLA and GLB
Europe
NAFTA
Asia
Other markets
22%
18%
18%
3%
33%
1%
5%
42%
15%
39%
4%
68 B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT
Unit sales by Daimler Trucks in 2019 were slightly lower than
in the previous year. In total, we delivered 488,500 heavy-,
medium- and light-duty trucks as well as buses of the Thomas
Built Buses and FUSO brands in the year under review (2018:
517,300). Daimler Trucks continues to be the world’s biggest
manufacturer of trucks above 6 tons. B.08 In the EU30
region, the truck market weakened significantly in the second
half of the year, following substantial earlier-than-planned
purchases in the first half. Our unit sales decreased slightly to
79,800 trucks (2018: 85,400). Our Mercedes-Benz brand
remained the market leader in the heavy-duty and medium-
duty segments, although our market share declined to 20.0%
(2018: 20.6%). B.09
In Latin America, however, we were able to significantly
increase our sales once again, to 42,600 units (2018: 38,200).
The growth was mainly due to the development of the region’s
main market, Brazil, where we sold 29,700 trucks. This repre-
sents a 39% increase on the previous year. Our Mercedes-Benz
brand trucks increased their market share. In the heavy- and
medium-duty segment, we expanded our market share to 29.2%
(2018: 27.9%) and remained the market leader. In the NAFTA
region, our sales once again slightly surpassed the previous
year’s high level, rising to 201,100 units (2018: 189,700). Our
market share of Class 6 – 8 trucks amounted to 37.0% (2018:
38.4%), which enabled us to remain the market leader.
In Asia, the truck markets of Indonesia and India contracted
significantly during the year under review. At 135,200 units
(2018: 164,700), our sales in the region decreased consider-
ably. This development was especially pronounced in Indone-
sia, where our sales declined by 39% to 39,100 units. We
sold 14,500 units (2018: 22,500) in India. Unit sales were thus
also substantially below the high level of the previous year.
Our BharatBenz brand achieved a market share of 5.8% (2018:
6.0%). We sold 42,200 units in the Japanese truck market, thus
not quite equaling the previous year’s sales (2018: 44,000).
Sales of Auman trucks, which we produce in China in coopera-
tion with our joint venture Beijing Foton Daimler Automotive
Co., Ltd. (BFDA), were significantly lower than in the prior year
at 86,200 units (2018: 103,400). In mid-2019, we launched
our new Auman EST-A heavy-duty truck in China. The vehicle is
equipped with the locally produced Mercedes-Benz OM457
engine. E pages 166 ff
B.08
Unit sales structure of Daimler Trucks
16%
9%
41%
28%
6%
EU30
Latin America
NAFTA
Asia
Other markets
B.09
Market share1
in %
Mercedes-Benz Cars
European Union
thereof Germany
United States
China
Japan
Daimler Trucks
Heavy- and medium-duty
trucks EU30
thereof Germany
Heavy-duty trucks
NAFTA region (Class 8)
Medium-duty trucks
NAFTA region (Classes 6 and 7)
Heavy- and medium-duty
trucks Brazil
Trucks Japan
Heavy- and medium-duty
trucks India
Mercedes-Benz Vans
Mid-size and large
vans EU30
thereof Germany
Small vans EU30
Large vans United States
Daimler Buses
Buses over 8 tons EU30
thereof Germany
Buses over 8 tons Brazil
2019
2018
19/18
Change
in % points
6.4
10.8
1.9
3.3
1.6
6.2
10.5
1.8
2.9
1.6
20.0
35.2
20.6
36.5
38.8
38.8
32.9
37.8
29.2
18.8
27.9
19.3
5.8
6.0
16.7
27.0
2.4
8.8
27.5
50.8
53.8
15.2
25.2
3.1
8.4
29.0
49.3
51.6
+0.2
+0.3
+0.1
+0.4
0.0
-0.6
-1.3
0.0
-4.9
+1.3
-0.5
-0.2
+1.5
+1.8
-0.7
+0.4
-1.5
+1.5
+2.2
1 Based on estimates in certain markets.
B | COMBINED MANAGEMENT REPORT | ECONOMIC CONDITIONS AND BUSINESS DEVELOPMENT 69
Business at Daimler Mobility continued to develop positively
in the year under review. As we had forecast in Annual Report
2018, worldwide contract volume continued to grow, reaching
the new record level of €162.8 billion in 2019 (+6%). At €74.4
billion, new business was also slightly higher than in 2018,
which is what we had anticipated at the beginning of the year.
Whereas new business grew in Europe (+3%), the Americas
(+9%) and Africa & Asia-Pacific (+2%, excluding China), it
decreased slightly in China (-4%). In the insurance business, we
brokered approximately 2.4 million policies in the year under
review, which corresponds with an increase of 5% compared
with the previous year. In total, 588 million transactions were
conducted through the mobility services of the YOUR NOW
joint-venture group in 2019. Daimler Mobility had 425,000 con-
tracts on its books with its Athlon and Daimler Fleet Manage-
ment brands (+8%). Total contract volume amounted to €7.0
billion at the end of 2019. E pages 177 ff
Order situation
The Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz
Vans and Daimler Buses divisions produce vehicles predomi-
nantly to order, in accordance with customers’ specifications.
While doing so, we flexibly adjust the production capacities
for individual models to changing levels of demand. Due in
particular to continued strong demand in China and the Euro-
pean markets, the number of orders placed with Mercedes-
Benz Cars during the year under review remained at a high
level despite a slight decrease. This was driven on the prod-
uct side primarily by the A-Class and B-Class models and the
E-Class, as well as by the continued strong success of our
SUVs. With an unchanged high level of production, the order
backlog at the end of the year was below the prior-year level.
At Daimler Trucks, both orders received and the order back-
log at year-end were significantly lower than a year earlier.
This was mainly due to the significant weakening of demand
in the second half of the year in the NAFTA region and also
the EU30 region.
Mercedes-Benz Vans achieved record unit sales once again
in 2019. At 438,400 vehicles, the previous year’s figure was
surpassed by 4%. Whereas we mainly address commercial cus-
tomers with the Sprinter, Vito and Citan models, the V-Class
is primarily designed for private use. With the X-Class, we
address diverse customers for both private and commercial
applications. In the EU30 countries, which are our core region,
our unit sales of 298,100 vehicles in 2019 were slightly above
the prior-year level (2018: 278,300), while our market share in
the combined segment for mid-size and large vans in the
region amounted to 16.7% (2018: 15.2%). We sold 121,300 vans
(2018: 107,300) in Germany. Unit sales in the NAFTA region
continued to grow significantly, with a new record of 45,700
vans sold in the United States (2018: 38,700). Our market
share for large vans increased to 8.8% (2018: 8.4%). Our sales
of 18,600 vans in Latin America were at the prior-year level
(2018: 18,700), as were sales of 29,500 units in China (2018:
29,100). However, unit sales in Russia and in a difficult market
environment in Turkey were significantly lower than in 2018.
At 231,500 units, global sales of Sprinter models were signifi-
cantly higher than in the previous year (2018: 206,300). Sales
of the Vito amounted to 109,300 units and were thus at the
prior-year level (2018: 108,300). Sales of 63,100 V-Class multi-
purpose vehicles were also at the level of the previous year
(2018: 63,900). Meanwhile, sales of the Mercedes-Benz Citan
amounted to 20,700 units (2018: 26,300) and a total of 13,800
X-Class vehicles were sold in the year under review
(2018: 16,700). E pages 171 ff
Daimler Buses sold 32,600 buses and bus chassis worldwide
in financial year 2019 (2018: 30,900). The slight increase was
due in particular to the noticeable recovery of the market in
Brazil, continued strong demand in our important EU30 market
and substantial sales growth in Argentina. The division main-
tained its market leadership in its most important traditional
core markets (EU30, Brazil, Argentina and Mexico). Due to con-
tinued high demand for our complete buses, sales in the EU30
region amounted to 9,300 units, which equaled the high figure
recorded in the previous year (2018: 9,300). Daimler Buses
defended its leading position in this region with a market share
of 27.5% (2018: 29.0%). At 3,000 units, sales in Germany were
5% higher than in the previous year. At 200 units, sales in Tur-
key decreased significantly due to the ongoing difficult situation
in the country (2018: 300). The market situation in Latin Amer-
ica (excluding Mexico) improved further on account of the
noticeable market recovery in Brazil. Sales of Mercedes-Benz
bus chassis in Brazil rose by 30% to 11,400 units. We were able
to strengthen our leading market position in Brazil with a mar-
ket share of 53.8% (2018: 51.6%). We sold 1,600 units in India,
thus equaling the previous year’s result (2018: 1,600). At 2,600
units, sales in Mexico were significantly lower than in the previ-
ous year (2018: 3,200). E pages 174 ff
70 B | COMBINED MANAGEMENT REPORT | PROFITABILITY
Profitability
To provide a better insight into the Group’s profitability, cash
flows and financial position, the statement of income, the
condensed statement of cash flows and the condensed state-
ment of financial position are shown for the Daimler Group
as well as for the “Industrial business” and “Daimler Mobility”.
The industrial business and Daimler Mobility columns represent
a business point of view. The industrial business comprises
the vehicle segments Mercedes-Benz Cars, Daimler Trucks,
Mercedes-Benz Vans and Daimler Buses. Daimler Mobility is
identical to the Daimler Mobility segment. Intra-group elimina-
tions between the industrial business and Daimler Mobility are
generally allocated to the industrial business.
Revenue and EBIT
Revenue
In the year 2019, the Daimler Group’s revenue of €172.7
billion (2018: €167.4 billion) was slightly above the prior-year
level. Also, adjusted for positive exchange-rate effects,
revenue was slightly higher than in the previous year. B.10
The development of revenue was positively affected primarily
by stronger pricing for new vehicles at Daimler Trucks and
growth in contract volume at Daimler Mobility.
The Daimler Group therefore met the forecast made at the
beginning of the year. The Mercedes-Benz Cars division
achieved revenue at the prior-year level; at the beginning of
the year, we had anticipated a slight increase in revenue.
Revenue at Daimler Trucks was slightly above the prior-year
level; we had forecasted a significant increase. The Mercedes-
Benz Vans division had forecasted significant revenue growth
for 2019 and was able to meet this forecast by the end of the
year. The Daimler Buses division achieved a slight increase
in revenue in 2019 and therefore did not meet the forecast of
significant revenue growth in 2019. However, Daimler Mobility
significantly increased its revenue in 2019 and therefore sur-
passed its forecast of slight revenue growth.
B.10
Revenue by segment and region
In millions of euros
2019
2018
19/18
% change
Daimler Group
172,745
167,362
+3
Divisions
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Mobility
Reconciliation
Regions
Europe
thereof Germany
NAFTA
thereof United States
Asia
thereof China
Other markets
93,877
40,235
14,801
4,733
28,646
-9,547
69,541
26,339
52,196
45,422
40,657
18,954
10,351
93,103
38,273
13,626
4,529
26,269
-8,438
68,496
24,802
47,952
41,152
40,627
19,790
10,287
+1
+5
+9
+5
+9
-13
+2
+6
+9
+10
+0
-4
+1
B.11
Consolidated revenue by region
In billions of euros
2015
2016
2017
2018
2019
55
50
45
40
35
30
25
20
15
10
5
0
Germany
Europe
(without
Germany)
NAFTA region
Asia
EBIT
The Daimler Group achieved EBIT of €4.3 billion in 2019,
which is significantly lower than in the previous year (2018:
€11.1 billion). The Daimler Group had expected EBIT to be
slightly above the prior year figure. B.12 B.13
The Mercedes-Benz Cars and Mercedes-Benz Vans divisions
posted earnings significantly below the prior-year figures.
This mainly resulted from a reassessment of risks relating to
ongoing governmental and legal proceedings and measures
taken with regard to Mercedes-Benz diesel vehicles in various
regions and markets, as well as from an updated risk assess-
ment for an expanded recall of vehicles with Takata airbags.
Earnings at the Mercedes-Benz Vans division were also reduced
by expenses arising from the review and prioritization of the
product portfolio, in connection with the planned discontinua-
tion of production of the X-Class in May 2020. At Daimler
Trucks, volume decreases mainly caused the negative earnings
development. On the other hand, Daimler Buses posted earn-
ings above the prior-year level. Daimler Mobility also surpassed
its prior-year figure significantly. The earnings of the Daimler
Group were reduced by declining discount rates. Exchange-rate
effects in total also had a negative impact on operating profit.
The reconciliation of segment earnings to Group EBIT resulted
in a higher expense than in the previous year.
In the Management Report for 2018, we had forecasted a return
on sales for the Mercedes-Benz Cars division of between 6%
and 8%. As the year 2019 progressed, in the context of our
capital market reporting, we adjusted this expectation to a
level of between 3% and 5%. The Mercedes-Benz Cars division
met this expectation. For the Mercedes-Benz Vans division,
we had anticipated a return on sales of between 5% and 7%. As
the year 2019 progressed, in the context of our capital market
reporting, we gradually adjusted the expectation downwards
to a forecast of minus 15% to minus 17%. At the end of the year,
the Mercedes-Benz Vans division was not able to meet that
forecast. The downgrading of expectations for both divisions
resulted mainly from a reassessment of risks relating to ongo-
ing governmental and legal proceedings and measures taken
with regard to Mercedes-Benz diesel vehicles in various regions
and markets, as well as from an updated risk assessment for
an expanded recall of vehicles with Takata airbags. For the
Daimler Trucks division, we had originally forecasted a return
on sales of between 7% and 9%. As the year progressed, in the
context of our capital market reporting, we adjusted the fore-
cast to 6% to 8%, which the Daimler Trucks division achieved
at the end of the year. Daimler Buses met the forecast of a
return on sales of between 5% and 7%. The Daimler Mobility
division, however, did not achieve its anticipated return on
equity of between 17% and 19% for the year 2019 due to
expenses related to the realignment of the YOUR NOW group.
B | COMBINED MANAGEMENT REPORT | PROFITABILITY 71
B.12
EBIT by segment
In millions of euros
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Mobility
Reconciliation
Daimler Group¹
2019
2018
19/18
% change
3,359
2,463
-3,085
283
2,140
-831
4,329
7,216
2,753
312
265
1,384
-798
11,132
-53
-11
.
+7
+55
-4
-61
1 EBIT, the indicator of operating performance, comprises earnings
before interest income/expense and corporate income taxes. The
reconciliation of the Daimler Group’s EBIT to earnings before in-
come taxes is included in Note 34 of the Notes to the Consolidated
Financial Statements.
B.13
Development of earnings
In billions of euros
EBIT
Net profit (loss)
15
10
5
0
2015
2016
20171
2018
2019
1 The prior-year figures have been adjusted due to the effects of the
first-time adoption of IFRS 15 and IFRS 9.
The revenue of the Mercedes-Benz Cars division in the year
2019 was €93,877 million (2018: €93,103 million) and there-
fore at the prior-year level (+1%). The division posted EBIT of
€3,359 million (2018: €7,216 million). Its return on sales was
3.6% and thus below the prior-year figure (2018: 7.8%). B.12
Earnings in 2019 were reduced by €1,882 million due to a reas-
sessment of risks relating to ongoing governmental and legal
proceedings and measures taken with regard to Mercedes-
Benz Cars diesel vehicles in various regions and markets. Fur-
thermore, expenses in connection with an updated risk assess-
ment for an expanded recall of vehicles with Takata airbags
caused a reduction in earnings of €600 million. In addition,
earnings were reduced by advance expenditures for new tech-
nologies and vehicles, as well as by exchange-rate effects.
Furthermore, the measurement at fair value of shares in Aston
Martin Lagonda Global Holdings plc (Aston Martin) had a
negative impact on EBIT. On the other hand, improved pricing
had a positive effect on EBIT.
72 B | COMBINED MANAGEMENT REPORT | PROFITABILITY
B.14
B.14
Return on Sales
In %
12
6
0
-6
-12
-18
-24
2015
2016
2017
2018
2019
Mercedes-Benz
Cars
Daimler
Trucks
Mercedes-Benz
Vans
Daimler
Buses
B.15
Return on Equity
Daimler Mobility
In %
20
15
10
5
0
2015
2016
20171
2018
2019
1 The prior-year figures have been adjusted due to the effects of the
first-time adoption of IFRS 15 and IFRS 9.
The Daimler Trucks division increased its revenue in the year
2019 by 5% to €40,235 million (2018: €38,273 million). The
division achieved EBIT of €2,463 million (2018: €2,753 million).
Its return on sales was below the prior-year figure at 6.1%
(2018: 7.2%). B.12
In particular, higher unit sales in the NAFTA region and positive
exchange-rate effects boosted EBIT. Further positive effects
resulted from better pricing across all brands. Lower volumes,
especially in the EU30 region and Asia, adversely affected
earnings. Additional negative effects resulted from the adjust-
ment of used-vehicle valuation. EBIT was also reduced by
higher expenditures for new technologies as well as by costs in
connection with capacity adjustments.
Due to higher unit sales and a more favorable model mix, the
Mercedes-Benz Vans division’s revenue increased in the year
2019 by 9% to €14,801 million (2018: €13,626 million). EBIT
amounted to minus €3,085 million (2018: plus €312 million).
The division’s return on sales decreased to minus 20.8% (2018:
plus 2.3%). B.12
EBIT was affected by a reassessment of risks relating to ongoing
governmental and legal proceedings and measures taken with
regard to Mercedes-Benz diesel vehicles in various regions and
markets (€2,200 million). EBIT was also reduced by expenses
in connection with the review and prioritization of the product
portfolio (€828 million) and an updated risk assessment for an
expanded recall of vehicles with Takata airbags (€341 million).
Furthermore, exchange-rate effects adversely affected EBIT.
On the other hand, EBIT was positively affected by higher unit
sales and a more favorable model mix.
Due to the positive development of unit sales, the revenue of
the Daimler Buses division increased by 5% to €4,733 million
in the year 2019 (2018: €4,529 million). The division posted
EBIT of €283 million (2018: €265 million). Its return on sales
was at the prior-year level of 6.0% (2018: 5.9%). B.12
EBIT was positively affected by strong growth in unit sales in
Brazil as well as by exchange-rate effects. Negative effects on
earnings resulted in particular from the lower capitalization of
development costs.
Daimler Mobility achieved EBIT of €2,140 million in 2019
(2018: €1,384 million). The division’s return on equity
increased to 15.3% (2018: 11.1%). B.15
Earnings increased by €718 million due to the merger of the
mobility services of Daimler Group and BMW Group in the year
2019. Growth in contract volume also had a positive impact.
The normalization of credit risk costs and expenses of €405
million in connection with the realignment of the YOUR NOW
group affected EBIT negatively. In the year 2018, earnings had
been reduced by €418 million due to effects from the conclu-
sion of the Toll Collect arbitration proceedings.
The reconciliation of the divisions’ EBIT to Group EBIT com-
prises gains and/or losses at the corporate level and the
effects on earnings of eliminating intra-Group transactions
between the divisions.
Items at the corporate level resulted in expenses of €808 mil-
lion (2018: €757 million). In the year 2019, expenses of €425
million are included in connection with ongoing governmental
and legal proceedings and measures taken with regard to
Mercedes-Benz diesel vehicles. In the prior year, the impairment
by €150 million of Daimler’s equity investment in BAIC Motor
Corporation Ltd. (BAIC Motor) affected earnings negatively.
Furthermore, expenses are included in both years in connec-
tion with the development of the divisional structure (“Project
Future”).
The elimination of intra-Group transactions resulted in an
expense of €23 million in 2019 (2018: €41 million).
B | COMBINED MANAGEMENT REPORT | PROFITABILITY 73
B.16
Reconciliation of Group EBIT to profit before income taxes
In millions of euros
Group EBIT
Amortization of
capitalized borrowing costs¹
Interest income
Interest expense
2019
2018
4,329
11,132
-16
397
-880
-15
271
-793
Profit before income taxes
3,830
10,595
1 Amortization of capitalized borrowing costs is not included in the
internal performance measure EBIT, but is a component of cost of
sales.
The reconciliation of Group EBIT to profit before income taxes
is shown in table B.16.
Change in the internal management and reporting structure
as of January 1, 2020
As of January 1, 2020, changes have taken place in connection
with the internal management and reporting structure and
thus with the reportable segments. The Group’s activities are
now divided into the segments Mercedes-Benz Cars, Mercedes-
Benz Vans, Daimler Trucks & Buses and Daimler Mobility. The
Mercedes-Benz Cars and Mercedes-Benz Vans segments are
combined for external reporting purposes into the reportable
segment Mercedes-Benz Cars & Vans, in line with the type of
products and services offered as well as the brands, distribu-
tion channels and customer profiles.
In addition, as explained in the Corporate Profile section in the
chapter on financial performance measures, we now report
adjusted EBIT in addition to EBIT for the Daimler Group and for
the segments from the year 2020 onwards.
Table B.17 shows the reconciliation from EBIT as booked to
adjusted EBIT for both the Daimler Group and the segments for
the financial year 2019.
The adjustments in connection with legal proceedings comprise
expenses from the reassessment of risks relating to ongoing
governmental and legal proceedings and measures taken with
regard to Mercedes-Benz Cars diesel vehicles in various regions
and markets, as well as expenses in connection with the
updated risk assessment for an extended recall of Takata airbags.
The material adjustments in connection with restructuring
measures comprise expenses from the realignment of the
YOUR NOW group and expenses in connection with the review
and prioritization of the product portfolio. The effects in
connection with M&A transactions comprise income from the
merger of the mobility services of Daimler Group and BMW
Group.
B.17
Reconciliation EBIT to adjusted EBIT
In millions of euros
2019
EBIT
Legal proceedings (and related measures)
as well as Takata
Restructuring measures
M&A transactions
Adjusted EBIT
Mercedes-
Benz Cars
Daimler
Trucks
Mercedes-
Benz Vans
Daimler
Buses
Daimler
Mobility
Recon-
ciliation
Daimler
Group
3,359
2,463
-3,085
283
2,140
-831
4,329
2,482
–
–
–
–
–
5,841
2,463
2,541
828
–
284
1.9
–
–
–
–
405
-718
425
–
–
5,448
1,233
-718
283
1,827
-406
10,292
6.0
13.1
Adjusted return on sales/return on equity (in %)1
6.2
6.1
1 Adjusted return on sales is the ratio of adjusted EBIT to sales. Adjusted return on equity is the ratio of adjusted EBIT to average equity on a quarterly
basis.
74 B | COMBINED MANAGEMENT REPORT | PROFITABILITY
Statement of income
The Group’s total revenue increased by 3.2% to €172.7 billion
in 2019; adjusted for exchange-rate effects, it increased by
2.2%. The development of revenue was positively affected
primarily by stronger pricing for new vehicles at the Daimler
Trucks division and growth in contract volume at Daimler
Mobility. B.18
Cost of sales amounted to €143.6 billion in 2019, increasing
by 6.9% compared with the previous year. In 2019, a reassess-
ment of risks relating to ongoing governmental and legal pro-
ceedings and measures taken with regard to Mercedes-Benz
diesel vehicles in various regions and markets as well as
expenses in connection with an updated risk assessment for
an expanded recall of vehicles with Takata airbags adversely
affected cost of sales at the Mercedes-Benz Cars and
Mercedes-Benz Vans segments. Cost of sales also include
expenses in connection with a review and prioritization of the
product portfolio at the Mercedes-Benz Vans division. The
increase in cost of sales was also caused by higher business
volumes and consequentially higher material expenses. At
Daimler Mobility, the normalization of credit-risk costs affected
cost of sales. Further information on cost of sales is provided
in E Note 5 of the Notes to the Consolidated Financial State-
ments. B.18
Overall, gross profit in relation to revenue decreased
from 19.8% to 16.9%.
Selling expenses decreased by €0.3 billion to €12.8 billion.
As a percentage of revenue, selling expenses decreased from
7.8% to 7.4%. B.18
General administrative expenses of €4.1 billion were at prior
year level (2018: €4.0 billion). As a percentage of revenue,
general administrative expenses decreased slightly to 2.3%
(2018: 2.4%). B.18
Research and non-capitalized development costs of €6.6
billion in 2019 remained at the prior-year level. They were
mainly related to the development of new models, advance
expenditure for the renewal of existing models, and the fur-
ther development of fuel-efficient and environmentally friendly
drive systems as well as safety technologies, automated and
autonomous driving and the digital connectivity of our prod-
ucts. As a proportion of revenue, research and non-capitalized
development costs decreased from 3.9% to 3.8%. Further
information on the Group’s research and development costs
is provided in the Research and Development section of the
Sustainability chapter of this Combined Management Report.
B.18
Other operating income of €2.8 billion (2018: €2.3 billion)
was above the level of the previous year. In 2019, it included
income of €0.7 billion from the merger of the business units
for mobility services of Daimler Group and BMW Group. In
2018, income from insurance compensation of €0.2 billion was
included. Other operating expense increased to €4.5 billion
(2018: €1.5 billion). Compared with the prior year, it included
higher expenses in connection with ongoing governmental and
legal proceedings and measures in the segments Mercedes-
Benz Cars and Mercedes-Benz Vans relating to Mercedes-Benz
diesel vehicles in various regions and markets. Further infor-
mation on the composition of other operating income and
expense is provided in E Note 6 of the Notes to the Consoli-
dated Financial Statements. B.18
B.18
Statement of income
In millions of euros
Revenue
Cost of sales
Gross profit
Selling expenses
General administrative expenses
Research and non-capitalized
development costs
Other operating income
Other operating
expense
Profit/loss on equity-method investments, net
Other financial income/expense, net
Interest income
Interest expense
Profit before income taxes
Income taxes
Net profit
thereof profit
attributable to non-controlling interests
thereof profit
attributable to shareholders of Daimler AG
Consolidated
Industrial Business
Daimler Mobility
2019
2018
2019
2018
2019
2018
172,745
167,362
144,099
141,093
-143,580
-134,295
-118,626
-111,589
25,473
-12,038
-3,139
29,504
-12,174
-3,075
-6,586
1,927
-4,444
1,245
-265
394
-868
1,699
-505
1,194
-6,581
2,137
-1,404
1,108
218
270
-788
9,215
-2,615
6,600
29,165
-12,801
-4,050
-6,586
2,837
33,067
-13,067
-4,036
-6,581
2,330
-4,469
-1,462
479
-262
397
-880
3,830
-1,121
2,709
656
210
271
-793
10,595
-3,013
7,582
332
333
2,377
7,249
28,646
-24,954
3,692
26,269
-22,706
3,563
-763
-911
–
910
-25
-766
3
3
-12
2,131
-616
1,515
-893
-961
–
193
-58
-452
-8
1
-5
1,380
-398
982
In 2019, the profit from equity-method investments of €0.5
billion was lower than the prior-year level (2018: €0.7 billion).
Both years include losses from Daimler Mobility companies. In
the year 2019, losses of €0.8 billion from the YOUR NOW group
reduced the profit from equity-method investments. In the year
2018, the agreement to conclude the Toll Collect arbitration
proceedings had a negative effect on earnings of €0.4 billion.
Also in the year 2018, a negative impact resulted from the
impairment by €0.2 billion of the investment in BAIC Motor.
B.18
Other financial expense/income worsened from income of
€0.2 billion to an expense of €0.3 billion. Of that decrease,
€0.2 billion is the result of the measurement at fair value of the
interest in Aston Martin. Furthermore, an additional expense
of €0.2 billion occurred from decreasing discount rates for pro-
visions for other risks. B.18
Net interest expense amounted to €0.5 billion (2018: €0.5
billion). B.18
The tax expense of €1.1 billion (2018: €3.0 billion) stated under
income tax expense decreased mainly due to the decline in
profit before income taxes. The effective tax rate for 2019 was
29.3% (2018: 28.4%). B.18
Net profit of €2.7 billion (2018: €7.6 billion) is significantly
below the prior-year figure. Net profit of €0.3 billion is attrib-
utable to non-controlling interests (2018: €0.3 billion).
Net profit attributable to the shareholders of Daimler AG
amounts to €2.4 billion (2018: €7.2 billion), representing
a decrease in earnings per share to €2.22 (2018: €6.78).
B.18
The calculation of earnings per share is based on an unchanged
average number of outstanding shares of 1,069.8 million.
Dividend
In line with a sustainable dividend policy, Daimler sets the divi-
dend based on a distribution ratio of 40% of the net profit
attributable to Daimler shareholders. We also take into consid-
eration the free cash flow from the industrial business when
setting the dividend. The Board of Management and the Super-
visory Board will propose to the Annual Shareholders’ Meeting
to be held on April 1, 2019 that a dividend of €0.90 per share
be distributed for financial year 2019 (2018: €3.25). This corre-
sponds to a total dividend distribution to our shareholders of
€1.0 billion (2018: €3.5 billion).] B.19
Net operating profit
Table B.20 shows the reconciliation of the EBIT of the divi-
sions to net operating profit. In addition to the EBIT of the divi-
sions, net operating profit also includes earnings effects for
which the divisions are not accountable, such as income taxes
and other reconciliation items.
B | COMBINED MANAGEMENT REPORT | PROFITABILITY 75
B.19
Dividend per share
3.25
3.25
3.65
3.25
0.90
In euros
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
2015
2016
2017
2018
2019
B.20
Reconciliation to net operating profit
In millions of euros
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Mobility
EBIT of the divisions
Income taxes1
Other reconciliation
Net operating profit
2019
2018
19/18
% change
3,359
2,463
-3,085
283
2,140
5,160
-1,261
-831
3,068
7,216
2,753
312
265
1,384
11,930
-3,169
-798
7,963
-53
-11
.
+7
+55
-57
-60
+4
-61
1 Adjusted for tax effects on interest income/expense and
amortization of capitalized borrowing costs.
Value Added
As described in the Performance Measurement System section
of the Corporate Profile chapter in chart B.03, the cost of
capital is the product of net assets and cost of capital
expressed as a percentage, which is subtracted from earnings
in order to calculate value added. 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.
The Group’s value added decreased by €5.7 billion to minus
€2.0 billion in 2019, representing a return on net assets of 4.8%
(2018: 14.8%). The minimum required rate of return of 8% was
therefore not achieved in the year under review. The significant
decrease in value added was mainly due to the development of
the divisions’ EBIT. In addition, further negative effects on
value added resulted from the sharp increase of €9.9 billion in
average net assets caused by higher investments in non-cur-
rent assets, the first-time capitalization of right-of-use assets
from leasing contracts and increased average inventories.
These effects were partially compensated by higher provisions
for other risks.
Value added at Mercedes-Benz Cars of minus €0.5 billion was
significantly below the prior-year amount of €4.1 billion. This
was primarily due to the negative earnings development. An
additional negative impact on value added resulted from the
increase in average net assets to €32.4 billion mainly caused
by higher investments in non-current assets as well as the
first-time capitalization of right-of-use assets from leasing con-
tracts. In addition, average net assets were also impacted by
rising average inventories, partially offset by higher provisions
for other risks.
Daimler Trucks’ value added fell by €0.5 billion compared to
previous year as a result of the development of earnings and
the increase in average net assets of €2.0 billion. This increase
resulted from the first-time capitalization of right-of-use assets
from leasing contracts and an increase in average inventories.
At Mercedes-Benz Vans, value added decreased significantly
by €3.3 billion to minus €3.4 billion, reflecting the sharp
decline in earnings. On the other hand, higher provisions for
other risks led to lower average net assets, which partially off-
set the negative development of value added.
The value added of the Daimler Buses division of €110 million
remains nearly unchanged (2018: €117 million). Average net
assets increased slightly to €1.4 billion.
Value added at Daimler Mobility of €0.3 billion was higher than
the prior-year level of minus €0.2 billion. The division’s return
on equity amounted to 15.3% (2018: 11.1%). The development of
value added primarily reflects the increase in earnings of €0.8
billion. On the other hand, the rise in average equity of €1.5 bil-
lion had a negative impact on value added.
76 B | COMBINED MANAGEMENT REPORT | PROFITABILITY
B.21
Value added
In millions of euros
2019
2018
19/18
% change
Daimler Group
-2.032
3.658
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Mobility
B.22
Net assets (average)
In millions of euros
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Mobility1
Net assets of the divisions
Equity-method investments2
Assets and liabilities from
income taxes3
Other reconciliation3
-532
1.230
-3.375
110
325
4.062
1.765
-91
117
-236
2019
2018
19/18
% change
32,418
10,274
2,412
1,440
13,961
60,505
980
2,720
-459
26,289
8,240
3,355
1,233
12,466
51,583
1,066
1,707
-547
2019
2018
19/18
% change
Daimler Group
63,746
53,809
1 Total equity.
2 To the extent not allocated to the segments.
3 To the extent not allocated to Daimler Mobility.
B.23
Net assets of the Daimler Group at year-end
In millions of euros
Net assets1
Intangible assets
Property, plant and
equipment
Leased assets
Inventories
Trade receivables
Less provisions for other risks
Less trade payables
Less other assets and
liabilities
Assets and liabilities from
income taxes1
Total equity of
Daimler Mobility
15,045
13,872
36,782
18,799
28,420
11,045
-19,865
-11,896
30,859
18,509
28,096
10,545
-14,604
-13,395
-33,624
-31,832
2,559
1,671
14,983
12,810
Daimler Group
62,248
56,531
1 To the extent not allocated to Daimler Mobility.
.
.
-30
.
-6
.
+23
+25
-28
+17
+12
+17
-8
+59
-16
+18
+8
+19
+2
+1
+5
+36
-11
+6
+53
+17
+10
B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES 77
Liquidity and Capital Resources
Principles and objectives of financial
management
Financial management at the Daimler Group consists of capital
structure management, cash and liquidity management, market-
price risk management (foreign exchange rates, interest rates
and commodity prices), as well as pension-asset management
and credit and financial country risk management. Worldwide
financial management is performed within the framework of
legal requirements consistently for all Group entities by the
Treasury department of the Daimler Group. Financial manage-
ment operates within a framework of guidelines, limits and
benchmarks, and on the operational level is organizationally
separate from other financial functions such as settlement,
financial controlling, reporting and accounting.
Capital structure management designs the capital structure
for the Group and its subsidiaries. Decisions regarding the cap-
italization of Daimler’s mobility, production, sales or financing
companies are based on the principles of cost-optimized and
risk-optimized liquidity and capital resources.
The purpose of liquidity management is to enable the Group
to meet its payment obligations at any time. For this purpose,
the Group records the cash flows from operating and financial
activities in a rolling plan. The resulting financial requirements
are covered by the use of appropriate instruments for liquidity
management (e.g. bank credit, commercial paper and notes);
liquidity surpluses are invested in the money market or the cap-
ital market taking into account risk and return expectations.
Our goal is to ensure the level of liquidity regarded as neces-
sary at optimal costs. Besides operational liquidity, the Daimler
Group maintains additional liquidity reserves which are avail-
able in the short term. Those additional financial resources
include a pool of receivables from the financial services busi-
ness which are available for securitization in the capital market,
as well as a contractually confirmed syndicated credit facility.
Cash management determines the cash requirements and
surpluses. By means of cash-pooling procedures, liquidity is
centrally concentrated on bank accounts of the Daimler Group
in various currencies. Most of the payments between Group
companies are made through internal clearing accounts, so
that the number of external cash flows is reduced to a mini-
mum. The Daimler Group has established standardized pro-
cesses and systems to manage its bank accounts and internal
cash-clearing accounts, and to execute automated payment
transactions.
Management of market-price risks aims to minimize the
impact of fluctuations in foreign exchange rates, interest rates
and commodity prices on the earnings of the divisions and
the Group. The Group’s overall exposure to these market-price
risks is determined to provide a basis for hedging decisions,
which include the definition of hedging volumes and correspond-
ing periods, as well as the selection of hedging instruments.
The hedging strategy is specified at the Group level and uni-
formly implemented in the segments. Decisions regarding the
management of risks resulting from fluctuations in foreign
exchange rates and commodity prices, as well as decisions on
asset/liability management (liquidity and interest rates), are
regularly made by the relevant internal committees.
Management of pension assets (plan assets) includes the
investment of the assets to cover the corresponding pension
obligations. The plan assets are legally separated from the
Group’s assets and are invested primarily in funds; they are
not available for general business purposes. The plan assets
are spread across various investment categories such as
equities, fixed-interest securities, alternative investments and
real estate, depending on the expected development of pen-
sion obligations and with the help of risk-return optimization.
The performance of asset management is measured by com-
paring with defined reference indices. Local custodians are
responsible for the risk management of the individual pension
assets. The Global Pension and Healthcare Committee limits
these risks by means of Group-wide binding guidelines. Addi-
tional information on pension plans and similar obligations is
provided in E Note 22 of the Notes to the Consolidated
Financial Statements.
78 B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES
The risk volume that is subject to credit risk management
includes all of the Daimler Group’s worldwide creditor posi-
tions with financial institutions, issuers of securities, and cus-
tomers in the financial services business and the automotive
business. Credit risks with financial institutions and issuers of
securities arise primarily from investments executed as part
of our liquidity management and from the application of deriva-
tive financial instruments. The management of these credit
risks is mainly based on an internal limit system that reflects
the creditworthiness of the respective financial institution or
issuer. The credit risk with customers of our automotive busi-
ness results from relationships with contracted dealerships
and general agencies, other corporate customers and retail
customers. In connection with the export business, general
agencies that according to our creditworthiness analyses are
not sufficiently creditworthy are generally required to provide
collateral such as first-class bank guarantees. The credit risk
with end-customers in the financial services business is man-
aged by Daimler Mobility on the basis of a standardized risk
management process. In this process, minimum requirements
are defined for the sales-financing and leasing business and
standards are set for credit processes, as well as for the identi-
fication, measurement and management of risks. Key elements
for the management of credit risks are appropriate creditwor-
thiness assessments supported by statistical risk-classification
methods, as well as structured portfolio analysis and portfolio
monitoring.
Financial country risk management includes various aspects:
the risk from investments in subsidiaries and joint ventures,
the risk from the cross-border financing of Group companies in
risk countries, and the risk from direct sales to customers in
those countries. The Daimler Group has an internal rating sys-
tem that assigns all countries in which it operates to risk cate-
gories. With equity-capital transactions of considerable magni-
tude in risk countries, the Group generally hedges against
political risks with the use of investment protection insurance
such as the German government’s investment guarantees.
Risks from cross-border receivables are partially protected with
the use of export credit insurance, letters of credit and bank
guarantees in favor of Daimler AG. In addition, an internal com-
mittee sets and restricts the level of hard-currency credits
granted to Daimler Mobility companies in risk countries.
Further information on the management of market-price risk,
credit risk and liquidity risk is provided in E Note 33 of the
Notes to the Consolidated Financial Statements.
Cash flows
Cash provided by operating activities B.24 amounted to
€7.9 billion in 2019 (2018: €0.3 billion). The increase was
primarily due to effects from the leasing and sales-financing
business. Those effects include a cash inflow of €0.9 billion
at Daimler Mobility in connection with an off-balance-sheet
ABS transaction carried out in July. Further overall positive
effects resulted from working-capital management, in particu-
lar due to the positive development of inventories at all auto-
motive segments. While the development of trade receivables
also contributed to the positive development of working capi-
tal, changes in trade payables at all automotive segments had
an opposing effect. Changes in lessee accounting also had a
positive impact on cash provided by operating activities.
The lower profit before income taxes is primarily related to the
non-cash-effective increases in provisions included in other
operating assets and liabilities. Compared to the previous year,
the lower operating profit led to lower income taxes paid, with
a positive effect on the cash flow from operating activities. On
the other hand, the fine of €870 million paid in conclusion of
the administrative offense proceedings against Daimler AG had
a negative effect.
Cash used for investing activities B.24 amounted to
€10.6 billion (2018: €9.9 billion). The change compared with
the previous year primarily reflects cash outflows (net) of
€0.7 billion relating to the merger of the mobility services of
Daimler Group and BMW Group. The main effect resulted from
capital increases at the joint ventures. Furthermore, increased
investments in intangible assets also affected cash used for
investing activities. However, positive effects resulted from the
acquisition and sale of marketable debt securities and similar
investments conducted in the context of liquidity management.
Compared to the previous year, there were higher total cash
inflows (net) in 2019.
Cash provided by financing activities B.24 amounted
to €5.6 billion (2018: €13.2 billion). The decrease was primarily
caused by lower net cash inflows from financing liabilities,
especially in the context of refinancing the leasing and sales-
financing business. There was also an impact from the intro-
duction of lessee accounting and the associated inclusion in the
cash flow from financing activities of payments on outstanding
leasing liabilities.
Cash and cash equivalents increased by €3.0 billion compared
with December 31, 2018, after taking currency-translation
effects into account. Total liquidity, which also includes market-
able debt securities and similar investments, increased by €2.1
billion to €27.5 billion.
B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES 79
B.24
Condensed statement of cash flows
In millions of euros
Cash and cash equivalents at beginning of period
Profit before income taxes
Depreciation and amortization/impairments
Other non-cash expense and income and gains/losses on
disposals of assets
Change in operating assets and liabilities
Inventories
Trade receivables
Trade payables
Receivables from financial services
Vehicles on operating leases
Other operating assets and liabilities
Dividends received from equity-method investments
Income taxes paid
Cash used for/provided by operating activities
Additions to property, plant and equipment and intangible assets
Investments in and disposals of shareholdings
Acquisitions and sales of marketable debt securities and
similar investments
Other
Cash used for investing activities
Change in financing liabilities
Dividends paid
Other transactions with shareholders
Internal equity and financing transactions
Cash used for/provided by financing activities
Effect of foreign exchange rate changes on cash
and cash equivalents
Cash and cash equivalents at end of period
The parameter used by Daimler to measure the financial capa-
bility of the Group’s industrial business is the free cash flow
of the industrial business B.25, which is derived from the
reported cash flows from operating and investing activities.
The cash flows from the acquisition and sale of marketable
debt securities and similar investments included in cash flows
from investing activities are deducted, as those securities are
allocated to liquidity and changes in them are thus not a part
of the free cash flow of the industrial business. In contrast,
the recognition and measurement of right-of-use assets, which
result from the change in lessee accounting and are largely
non-cash items, are included in the free cash flow of the indus-
trial business.
Consolidated
Industrial Business
Daimler Mobility
2019
2018
2019
2018
2019
2018
15,853
3,830
7,751
12,072
10,595
6,305
12,799
1,699
7,597
9,515
9,215
6,177
3,054
2,131
154
-737
-1,050
-824
-1,557
99
-346
-1,625
-4,664
-1,156
5,641
1,202
-2,107
7,888
-10,835
-1,225
1,054
399
-10,607
9,404
-3,740
-36
–
-3,850
-884
1,694
-10,257
-1,609
877
1,380
-2,858
343
-10,701
-417
471
726
-9,921
17,456
-4,220
-10
–
5,628
13,226
1
-410
-1,651
-8
550
5,789
1,201
-959
12,985
-10,645
-582
883
358
-9,986
6,760
-3,725
-26
-2,767
242
-3,738
-779
1,723
-7
1,208
1,067
1,304
-1,698
12,915
-10,534
14
505
708
-9,307
8,889
-4,215
-20
-5,127
-473
87
98
64
26
-4,656
-1,706
-148
1
-1,148
-5,097
-190
-643
171
41
-621
2,644
-15
-10
2,767
5,386
121
133
112
149
9
18,883
15,853
16,152
12,799
2,731
2,557
1,380
128
507
-112
-105
-29
-10,250
-2,817
-190
76
-1,160
-12,572
-167
-431
-34
18
-614
8,567
-5
10
5,127
13,699
-16
3,054
B.25
Free cash flow of the industrial business
In millions of euros
Cash provided
by operating activities
Cash used for
investing activities
Change in marketable
debt securities and similar
investments
Right-of-use assets
Other adjustments
Free cash flow of the
industrial business
2019
2018
19/18
Change
12,985
12,915
-9,986
-9,307
-883
-987
239
-505
–
-205
+70
-679
-378
-987
+444
1,368
2,898
-1,530
80 B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES
B.26
Reconciliation from CFBIT to the free cash flow of the
industrial business
In millions of euros
CFBIT automotive segments
Income taxes paid
Interest paid
Other reconciling items
Free cash flow of the industrial business
2019
3,499
-959
-388
-784
1,368
Other adjustments mainly relate to the acquisitions and dispos-
als of shareholdings within the Group resulting from “Project
Future” and are reversed in the free cash flow of the industrial
business. Furthermore, effects from the financing of dealer-
ships and effects from internal deposits within the Group are
adjusted. In addition, the calculation of the free cash flow
includes the cash flows to be shown under cash provided by
financing activities in connection with the acquisition or
disposal of interests in subsidiaries without loss of control.
The free cash flow of the industrial business amounted to
€1.4 billion in 2019 and was significantly lower than the prior-
year figure of €2.9 billion. The free cash flow of the industrial
business was thus in line with the adjusted forecast made in
the Outlook section of the Interim Report on the second quar-
ter of 2019. However, the target stated in the Outlook section
of Annual Report 2018 that the free cash flow of the industrial
business would probably be slightly higher than in the previous
year was not met.
B.27
Reconciliation CFBIT to adjusted CFBIT of the automotive segments
In millions of euros
2019
CFBIT
Legal proceedings (and related measures)
CFBIT adjusted
EBIT adjusted
Cash conversion rate adjusted1
The decrease of €1.5 billion in the free cash flow of the indus-
trial business to €1.4 billion resulted from a number of factors,
primarily the fine paid in conclusion of the administrative
offense proceedings against Daimler AG. As well as the nega-
tive effects relating to the recognition and measurement of
right-of-use assets, additional effects on the free cash flow of
the industrial business resulted from the negative development
of operating leases and increased investments in intangible
assets. Furthermore, increased cash outflows (net) for the
acquisition and disposal of shareholdings also contributed neg-
atively. On the other hand, the development of working capital
and lower income tax payments had a positive impact.
Apart from derivation on the basis of cash flows from operat-
ing and investing activities, the free cash flow of the industrial
business can be derived from the cash flows before interest
and taxes (CFBIT) of the automotive segments B.26.
The CFBIT of the automotive segments is derived from EBIT
and the change in net assets and includes additions to right-of-
use assets.
The reconciliation from the CFBIT of the automotive segments
to the free cash flow of the industrial business also includes
income taxes and interest paid. Other reconciling items include
eliminations between the segments and amounts allocated to
the industrial business but for which the automotive segments
are not accountable.
Starting from financial year 2020, apart from the free cash flow
of the industrial business, the adjusted cash conversion rates
of the automotive segments will also be forecast and reported.
Table B.27 shows for each of the automotive segments the
reconciliation from CFBIT to adjusted CFBIT, as well as the
adjusted cash conversion rate.
Mercedes-
Benz Cars
Daimler
Trucks
Mercedes-
Benz Vans
Daimler
Buses
Sum
automotive
segments
851
653
1,504
5,841
2,431
–
2,431
2,463
0.3
1.0
-83
482
399
284
1.4
300
–
300
283
1.1
3,499
1,135
4,634
8,871
1 Cash conversion rate adjusted is the relationship of CFBIT adjusted to EBIT adjusted.
B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES 81
The adjustments from legal proceedings include all payments
by the automotive segments in connection with ongoing gov-
ernmental and legal proceedings and related measures taken
with regard to Mercedes-Benz diesel vehicles.
In 2019, the free cash flow of the Daimler Group led to a cash
outflow of €4.8 billion (2018: €10.2 billion). Besides the effects
of the free cash flow of the industrial business, the free cash
flow of the Daimler Group is mainly affected by the leasing and
sales-financing business of Daimler Mobility. Additional effects
resulted from the cash outflows (net) relating to the merger of
the mobility services of Daimler Group and BMW Group.
The net liquidity of the industrial business B.28 is calcu-
lated as the total amount as shown in the statement of finan-
cial position of cash, cash equivalents and the marketable debt
securities and similar investments included in liquidity man-
agement, less the currency-hedged nominal amounts of financ-
ing liabilities.
To the extent that the Group’s internal refinancing of the finan-
cial services business is provided by the companies of the
industrial business, this amount is deducted in the calculation
of the net debt of the industrial business.
Due to the introduction of lessee accounting according to
IFRS 16 and the associated recognition of leasing liabilities,
the net liquidity of the industrial business decreased by €3.2
billion to €13.1 billion at January 1, 2019. Since the beginning
of the year, net liquidity decreased by a further €2.1 billion to
€11.0 billion. The main driver of the decrease in net liquidity
was the dividend payment to Daimler AG shareholders, which
was only partly offset by the positive free cash flow of the
industrial business.
Net debt at Group level, which primarily results from refinancing
the leasing and sales-financing business, increased compared
with December 31, 2018 by €14.1 billion to €133.7 billion. The
effect resulting from the introduction of lessee accounting is
€3.4 billion. B.29.
B.28
Net liquidity of the industrial business
In millions of euros
Dec. 31,
2019
Dec. 31,
2018
19/18
Change
Cash and cash equivalents
16,152
12,799
+3,353
Marketable debt securities
and similar investments
Liquidity
Financing liabilities
Market valuation and
currency hedges for
financing liabilities
Financing liabilities
(nominal)
Net liquidity
7,522
23,674
-13,289
8,364
21,163
-4,771
-842
+2,511
-8,518
612
-104
+716
-12,677
10,997
-4,875
16,288
-7,802
-5,291
B.29
Net debt of the Daimler Group
In millions of euros
Dec. 31,
2019
Dec. 31,
2018
19/18
Change
Cash and cash equivalents
18,883
15,853
+3,030
Marketable debt securities
and similar investments
Liquidity
Financing liabilities
Market valuation and
currency hedges for
financing liabilities
Financing liabilities
(nominal)
Net debt
8,655
27,538
9,577
25,430
-161,780
-144,902
-922
+2,108
-16,878
579
-97
+676
-161,201
-133,663
-144,999
-119,569
-16,202
-14,094
82 B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES
B.30
Investment in property, plant and equipment
In billions of euros
8
7
6
5
4
3
2
1
0
2015
2016
2017
2018
2019
B.31
Investment in property, plant and
equipment by division
Contingent liabilities and other financial
obligations
At December 31, 2019, the best estimate for potential obligations
from contingent liabilities is €1.6 billion (2018: €0.8 billion).
In the context of its ordinary business operations, the Group
has also entered into other financial obligations in addition
to the liabilities shown in the consolidated statement of finan-
cial position at December 31, 2019. These financial obligations
result from contractual commitments to acquire intangible
assets, property, plant and equipment and leased property,
and irrevocable loan commitments.
Detailed information on contingent liabilities and other finan-
cial obligations is provided in E Note 31 of the Notes to the
Consolidated Financial Statements.
In millions of euros
Daimler Group
in % of revenue
Mercedes-Benz Cars
in % of revenue
Daimler Trucks
in % of revenue
Mercedes-Benz Vans
in % of revenue
Daimler Buses
in % of revenue
Daimler Mobility
in % of revenue
2019
2018
19/18
% change
Investments
7,199
4.2
5,629
6.0
971
2.4
240
1.6
134
2.8
87
0.3
7,534
4.5
5,684
6.1
1,105
2.9
468
3.4
144
3.2
64
0.2
-4
-1
-12
-49
-7
+36
In the context of our strategy of strengthening our core busi-
ness and with the transformation of the automotive industry, we
aim to make good use of the opportunities presented by the
global automotive markets. In this context, we always focus on
the dynamically changing wishes of our customers. We there-
fore aim to play a major role in shaping the fundamental techno-
logical change taking place in the automotive industry. This
applies in particular to the electrification of our product range
and the digital connectivity of our products and processes at all
stages of the value chain. Achieving this goal will continue to
require substantial investments in innovative products and new
technologies, as well as in the expansion of our worldwide pro-
duction network. In 2019, our investments in property, plant and
equipment – as already announced in Annual Report 2018 –
once again reached the very high level of €7.2 billion (2018: €7.5
billion).
At December 31, 2019, financial obligations of €3.7 billion exist
in connection with future investments in property, plant and
equipment (2018: €4.3 billion).
At Mercedes-Benz Cars, investments in property, plant and
equipment remained at the very high level of €5.6 billion in
2019 (2018: €5.7 billion), primarily due to the ongoing product
offensive. The most important projects included the successor
generation of the current C-Class and the product ramp-up
of the new GLE sports utility vehicle. We also made substantial
investments in the reorganization of our German production
facilities as competence centers, in the expansion of our inter-
national production network, and in the worldwide production
network for electric mobility. The main areas of investment at
Daimler Trucks in 2019 were successor generations for existing
products, new products, global component projects and the
optimization of the worldwide production and sales network.
Total investment in property, plant and equipment at Daimler
B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES 83
Trucks amounted to €1.0 billion (2018: €1.1 billion). At the
Mercedes-Benz Vans division, the focus of investment was on
the further electrification of the Sprinter, Vito and V-Class
model series. The main investments at Daimler Buses last year
were in new products and the modernization of the production
network.
Furthermore, we capitalized development costs of €3.1 billion
in 2019 (2018: €2.5 billion); this is presented under intangible
assets in E Note 10.
Refinancing
The funds raised by Daimler in the year 2019 primarily served
to refinance the leasing and sales-financing business. For
that purpose, Daimler made use of a broad spectrum of vari-
ous financing instruments in various currencies and markets.
They include bank loans, commercial paper in the money mar-
ket, bonds with medium and long maturities, promissory-note
loans, customer deposits at Mercedes-Benz Bank, and the
securitization of receivables from customers in the financial
services business (asset-backed securities).
Various issuance programs are available for raising longer-term
funds in the capital market. They include the Euro Medium
Term Note program (EMTN) with a total volume of €70 billion,
under which Daimler AG and several subsidiaries can issue
bonds in various currencies. Other local capital-market pro-
grams exist, which are significantly smaller than the EMTN pro-
gram. Capital-market programs allow flexible, repeated access
to the capital markets.
The monetary policy of the central banks also affected the situ-
ation in the bond markets significantly in the reporting period.
The high volumes of available liquidity meant that risk premi-
ums for companies with investment-grade credit ratings largely
remained moderate.
In the year under review, the Group covered its refinancing
requirements mainly through the issuance of bonds. A large
proportion of those bonds were placed in the form of so-called
benchmark issuances (bonds with high nominal volumes) in the
US dollar and euro markets. B.33
In the Chinese market, Daimler placed four so-called panda
bonds with a total volume of CNY 10.0 billion. In addition, a
large number of smaller bonds were issued in various curren-
cies and markets.
B.32
Refinancing instruments
Average interest rates
Carrying values
Dec. 31,
2019
Dec. 31,
2018
Dec. 31,
2019
Dec. 31,
2018
in %
In millions of euros
2.03
2.24
99,557
88,942
2.68
3.73
39,811
39,400
0.50
0.58
13,119
11,774
Volume
Month of
emission
Maturity
€1,500 million
Feb. 2019
Feb. 2023
€1,000 million
Feb. 2019
Jun. 2026
Notes/bonds and
liabilities from
ABS transactions
Liabilities to
financial institutions
Deposits in the direct
banking business
B.33
Benchmark issuances
Issuer
Daimler International
Finance B.V.
Daimler International
Finance B.V.
Daimler AG
€750 million
Feb. 2019
Feb. 2031
Daimler Finance North
America LLC
Daimler Finance North
America LLC
Daimler Finance North
America LLC
Daimler AG
Daimler AG
Daimler AG
Daimler AG
Daimler Finance
North America LLC
Daimler Finance
North America LLC
Daimler Finance
North America LLC
Daimler Finance
North America LLC
Daimler International
Finance B.V.
Daimler International
Finance B.V.
US$1,900 million
Feb. 2019
Feb. 2022
US$600 million
Feb. 2019
Feb. 2024
US$500 million
Feb. 2019
Feb. 2029
€750 million
Aug. 2019
Feb. 2024
€1,000 million
Aug. 2019
Nov. 2026
€750 million
Aug. 2019
Feb. 2030
€500 million
Aug. 2019
Aug. 2034
US$1,500 million
Aug. 2019
Feb. 2022
US$1,250 million
Aug. 2019
Aug. 2022
US$750 million
Aug. 2019
Jun. 2024
US$500 million
Aug. 2019
Aug. 2029
€1,750 million
Nov. 2019
Nov. 2023
€1,250 million
Nov. 2019 Mai. 2027
Daimler AG
€1,000 million
Nov. 2019
Nov. 2031
84 B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES
Daimler also issued small volumes of commercial paper in
2019.
At the end of 2019, Daimler had unutilized short- and long-term
credit lines totaling €28.1 billion (2018: €26.8 billion).
In 2019, asset-backed securities (ABS) were issued in five
countries worldwide. In the United States, a total refinancing
volume of USD 8.7 billion was generated in six transactions,
and in Canada, a total volume of CAD 1.0 billion in two transac-
tions. In Australia, two transactions were conducted in a total
volume of AUD 1.26 billion. For the first time, €0.5 billion was
successfully placed with investors in Italy. Furthermore, an
ABS transaction with a volume of CNY 8.5 billion was placed in
China.
Bank credit was another important source of refinancing in
2019. Loans were provided by globally active banks as well as
by nationally operating banks. The lenders also included supra-
national banks such as the European Investment Bank and the
Brazilian Development Bank.
Since July 2018, Daimler has had at its disposal a syndicated
credit facility with a volume of €11 billion from a consortium of
international banks. After the exercise of an extension option
of one year beyond the original term, it grants Daimler addi-
tional financial flexibility until 2024. The term can be extended
for another year until 2025. Daimler does not intend to utilize
the credit line.
The carrying values of the main refinancing instruments and
the weighted average interest rates are shown in table B.32.
At December 31, 2019, they are mainly denominated in the
following currencies: 42% in euros, 27% in US dollars, 8% in
Chinese renminbi, 4% in British pounds, 3% in Canadian
dollars and 3% in Japanese yen.
At December 31, 2019, the total of financial liabilities shown in
the consolidated statement of financial position amounted to
€161.8 billion (2018: €144.9 billion).
Detailed information on the amounts and terms of the main
items of financing liabilities is provided in E Notes 24 and 33
of the Notes to the Consolidated Financial Statements.
E Note 33 also provides information on the maturities of the
other financial liabilities.
B | COMBINED MANAGEMENT REPORT | LIQUIDITY AND CAPITAL RESOURCES 85
Credit ratings
The credit ratings of Daimler AG changed in 2019 with four of
the agencies we have engaged to provide ratings. Moody’s and
S&P downgraded their short-term and long-term ratings by
one notch. Both agencies changed the outlook from “stable” to
“negative.” DBRS also changed the trend on the long-term rating
from “stable” to “negative.” With Fitch, our short-term rating
was upgraded by one notch to F1. B.34
On May 21, 2019, Fitch Ratings (Fitch) affirmed its long-term
issuer default rating for Daimler AG of A- with a stable outlook.
Fitch emphasized Daimler’s strong business profile and the
leading positions of its automotive divisions. At the same time,
Fitch upgraded its short-term rating from F2 to F1. This step
was taken with reference to the Group’s good financial situa-
tion and financial flexibility.
The European rating agency Scope Ratings (Scope) confirmed
its issuer rating of A for Daimler AG and its financing com-
panies on December 17, 2019. Scope assumes that Daimler
will continue to maintain its leading market position with
Mercedes-Benz Cars and Daimler Trucks. The Group’s diversi-
fied global presence also supports the rating. Daimler’s
financial risk profile in view of the significant surplus liquidity
continues to be a key factor for the rating.
On December 12, 2019, S&P Global Ratings (S&P) lowered its
long-term issuer rating for Daimler AG from A to A-. The out-
look was assessed as “negative.” The short-term rating was
altered from A-1 to A-2. S&P explained this action primarily
with Daimler’s significantly reduced earnings guidance. In addi-
tion, S&P believes Daimler remains exposed to multiple head-
winds. They include the transition of its product portfolio to
electric vehicles, the challenge of complying with stricter Euro-
pean CO2 targets, geopolitical risks for world trade, intensify-
ing competition and the execution of Daimler’s planned
restructuring program.
B.34
Credit ratings
Long-term credit rating
S&P
Moody's
Fitch
Scope
DBRS
Short-term credit rating
S&P
Moody's
Fitch
Scope
DBRS
End of 2019 End of 2018
A–
A3
A–
A
A
A-2
P-2
F1
S-1
A
A2
A–
A
A
A-1
P-1
F2
S-1
R-1 (low)
R-1 (low)
Moody’s Investors Service (Moody’s) downgraded its long-
term credit rating for Daimler AG and its subsidiaries included
in the rating from A2 to A3 on December 13, 2019. The outlook
was changed to “negative.” The short-term rating was down-
graded to P-2. Moody’s explained this step with Daimler’s
reduced earnings guidance for the coming years and the addi-
tionally anticipated restructuring costs from the announced
efficiency program. Moody’s also sees challenges in the
changeover of the product portfolio to battery-electric vehi-
cles, as well as from a potential general decline in demand for
light vehicles.
The Canadian agency DBRS confirmed its long-term rating for
Daimler AG at A in a press release on November 28, 2019.
However, the trend was changed from “stable” to “negative.”
DBRS stated that this change reflects Daimler’s recently
weaker earnings and the structural headwinds in our core auto-
motive business. The trend on the short-term rating of R-1
(low) was maintained at “stable.”
86 B | COMBINED MANAGEMENT REPORT | FINANCIAL POSITION
Financial Position
The balance sheet total increased compared with December 31,
2018 from €281.6 billion to €302.4 billion; the increase inclu-
des effects from currency translation of €3.1 billion. Adjusted
for the effects of currency translation, the increase amounts
to €17.7 billion. Daimler Mobility accounts for €174.8 billion of
the balance sheet total (2018: €165.3 billion), equivalent to
58% of the Daimler Group’s total assets (2018: 59%).
The increase in total assets primarily reflects the higher
volume of the financial services business as well as increased
cash and cash equivalents. In addition, the recognition and
measurement of right-of-use assets due to changed lessee
accounting led to an increase in property, plant and equipment
(see E Note 11 of the Notes to the Consolidated Financial
Statements). On the liabilities side of the balance sheet, there
were increases primarily in financing liabilities (including liabili-
ties from lease contracts) and provisions, while equity decre-
ased compared with December 31, 2018. Table B.35 shows
the condensed statement of financial position for the Group as
well as for the industrial business and Daimler Mobility.
B.35
Condensed statement of
financial position
In millions of euros
Assets
Intangible assets
Property, plant and equipment
Equipment on operating leases
Receivables from financial services
Equity-method investments
Inventories
Trade receivables
Cash and cash equivalents
Marketable debt securities and similar investments
thereof current
thereof non-current
Other financial assets
Other assets
Assets held for sale
Total assets
Equity and liabilities
Equity
Provisions
Financing liabilities
thereof current
thereof non-current
Trade payables
Other financial liabilities
Contract and refund liabilities
Other liabilities
Liabilities held for sale
Total equity and liabilities
Consolidated
Industrial Business
Daimler Mobility
At December 31,
2018
2019
At December 31,
2018
2019
At December 31,
2018
2019
15,978
37,143
51,482
103,661
5,949
29,757
12,332
18,883
8,655
7,885
770
6,083
12,515
–
302,438
62,841
30,652
161,780
62,601
99,179
12,707
9,864
13,631
10,963
–
14,801
30,948
49,476
96,740
4,860
29,489
12,586
15,853
9,577
8,855
722
5,733
11,025
531
281,619
66,053
22,955
144,902
56,240
88,662
14,185
10,032
12,519
10,761
212
15,077
36,782
18,799
-88
4,842
28,420
11,045
16,152
7,522
7,420
102
-13,283
2,349
–
13,913
30,859
18,509
-90
4,651
28,096
10,545
12,799
8,364
8,362
2
-12,719
1,376
–
901
361
32,683
103,749
1,107
1,337
1,287
2,731
1,133
465
668
19,366
10,166
–
888
89
30,967
96,830
209
1,393
2,041
3,054
1,213
493
720
18,452
9,649
531
127,617
116,303
174,821
165,316
47,858
29,473
13,289
-21,218
34,507
11,896
6,224
13,239
5,638
–
53,243
21,942
4,771
-20,993
25,764
13,395
5,888
12,146
4,918
–
14,983
1,179
148,491
83,819
64,672
811
3,640
392
5,325
–
12,810
1,013
140,131
77,233
62,898
790
4,144
373
5,843
212
302,438
281,619
127,617
116,303
174,821
165,316
B | COMBINED MANAGEMENT REPORT | FINANCIAL POSITION 87
B.36
Balance sheet structure Daimler Group
In billions of euros
Assets
Non-current assets
Current assets
302
175
282
282
160
66
302
63
134
118
128
122
105
98
thereof liquidity
28
25
2018
2019
Equity and liabilities
Equity
Inventories increased slightly from €29.5 billion to €29.8
billion, equivalent to 10% of total assets, and were thus at
the prior-year level. While inventories at the Mercedes-Benz
Cars division increased mainly due to model changes and
the launch of new models, inventories at the Daimler Trucks
and Mercedes-Benz Vans divisions were reduced to below
the prior-year level.
Non-current liabilities
Current liabilities
Trade receivables of €12.3 billion are below the prior-year
level of €12.6 billion. The Mercedes-Benz Cars division
accounts for 53% of these receivables (2018: 45%), the Daimler
Trucks division accounts for 23% (2018: 25%) and the
Mercedes-Benz Vans division accounts for 9% (2018: 8%).
Cash and cash equivalents increased compared with the end
of 2018 by €3.0 billion to €18.9 billion.
Current assets account for 42% of the balance sheet total, which
is below the prior-year level (2018: 43%). Current liabilities
amount to 35% of total equity and liabilities, which is at the
prior-year level. Table B.36 shows the structure of the
balance sheet by maturity.
Marketable debt securities and similar investments
de creased compared with December 31, 2018 from €9.6 billion
to €8.7 billion. Those assets include the debt instruments that
are allocated to liquidity, most of which are traded in active
markets. They generally have an external rating of A or better.
Other financial assets of €6.1 billion are above the prior-year
level (2018: €5.7 billion). They primarily consist of equity and
debt instruments, investments in non-consolidated subsidiaries,
derivative financial instruments, and loans and other receivab-
les due from third parties.
Other assets of €12.5 billion (2018: €11.0 billion) primarily
comprise deferred tax assets and tax refund claims. The incre-
ase is mainly due to deferred tax assets on tax loss carryfor-
wards.
The Group’s equity decreased compared with December 31,
2018 from €66.1 billion to €62.8 billion. Positive effects in
equity resulted from the net profit of €2.7 billion and the effects
of currency translation of €0.5 billion. This was more than off-
set by the dividend of €3.5 billion paid out to Daimler’s share-
holders, the effect of remeasurement of derivative financial
instruments not recognized in profit or loss of €0.5 billion, and
actuarial losses from defined-benefit pension plans recognized
in retained earnings of €2.2 billion. Equity attributable to the
shareholders of Daimler AG accordingly decreased to €61.3 bil-
lion (2018: €64.7 billion).
While the balance sheet total increased, equity decreased
compared with the previous year. The Group’s equity ratio of
20.5% was therefore below the level at the end of 2018 (22.2%);
the equity ratio for the industrial business was 36.7% (2018:
42.8%). It is necessary to consider the fact that the equity
ratios at the end of 2018 and 2019 are adjusted for the paid
and proposed dividend payments.
Intangible assets of €16.0 billion (2018: €14.8 billion) include
€12.5 billion of capitalized development costs (2018: €11.3
billion), €1.7 billion of franchises, industrial property and similar
rights (2018: €2.0 billion) and €1.2 billion of goodwill (2018:
€1.1 billion). The Mercedes-Benz Car division accounts for 85%
(2018: 81%) of the development costs while the Mercedes-Benz
Vans division accounts for 8% (2018: 10%) and the Daimler
Trucks division accounts for 6% (2018: 8%). Capitalized develop-
ment costs amount to €3.1 billion in 2019 (2018: €2.5 billion)
and account for 32% of the Group’s total research and develop-
ment expenditure (2018: 28%).
Property, plant and equipment increased to €37.1 billion
(2018: €30.9 billion). Due to the application of single lessee
accounting according to IFRS 16 as of January 1, 2019, right-of-
use assets of €4.2 billion are included in property, plant and
equipment. In 2019, €7.2 billion was invested worldwide (2018:
€7.5 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 €4.4 billion of the capital expenditure (2018:
€4.4 billion).
Equipment on operating leases and receivables from
financial services rose to a total of €155.1 billion (2018:
€146.2 billion). The increase adjusted for currency-translation
effects of €6.5 billion was primarily caused by the higher level
of new business at Daimler Mobility; contract volume increa-
sed in North and South America, Europe and Asia. The leasing
and sales-financing business as a proportion of 51% of total
assets was below the prior-year level (2018: 52%).
Equity-method investments increased to €5.9 billion (2018:
€4.9 billion). The increase is mainly due to the merger of the
mobility services of Daimler Group and BMW Group and the
resulting first-time consolidation of five operating joint ven-
tures, which were merged into YOUR NOW Holding GmbH at
the end of 2019 (see E Note 13 of the Notes to the Consoli-
dated Financial Statements). Furthermore, they mainly com-
prise the carrying amounts of our equity interests in Beijing
Benz Automotive Co., Ltd., BAIC Motor Corporation Ltd. and
There Holding B.V.
Contract and refund liabilities of €13.6 billion are higher
than a year earlier (2018: €12.5 billion). They mainly comprise
deferred revenue from service and maintenance contracts
as well as extended warranties and obligations from sales in
the scope of IFRS 15. Higher revenues from service and main-
tenance contracts and extended warranties mainly led to the
increase in contract and refund liabilities.
Other liabilities of €11.0 billion (2018: €10.8 billion) primarily
comprise deferred taxes, tax liabilities and deferred income.
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
F.03, the Consolidated Statement of Changes in Equity
F.05 and the related notes in the Notes to the Consolidated
Financial Statements.
88 B | COMBINED MANAGEMENT REPORT | FINANCIAL POSITION
Provisions increased significantly from €23.0 billion to €30.7
billion; as a proportion of the balance sheet total, they were
above the prior-year level at 10% (2018: 8%). They primarily
comprise provisions for pensions and similar obligations of
€9.7 billion (2018: €7.4 billion), which mainly consist of the
difference between the present value of defined-benefit
pension obligations of €36.2 million (2018: €31.7 billion) and
the fair value of the pension-plan assets applied to finance
those obligations of €27.8 billion (2018: €25.5 billion). The
decrease in discount rates led to an increase in the present
value of the defined-benefit pension obligations. This effect
was only partially offset by a positive interest rate development
for plan assets. Provisions also relate to liabilities for product
warranties of €8.7 billion (2018: €7.0 billion), for personnel
and social costs of €4.2 billion (2018: €4.3 billion), for liability
risks, litigation risks and regulatory proceedings of €4.9 billion
(2018: €2.1 billion), as well as other provisions of €3.1 billion
(2018: €2.1 billion). The reassessment of risks especially at the
Mercedes-Benz Cars and Mercedes-Benz Vans divisions led to
an increase in provisions for product warranties and for liability
risks, litigation risks and regulatory proceedings. The increase
relates to ongoing governmental and legal proceedings and
measures taken with regard to Mercedes-Benz diesel vehicles
in several regions and markets, as well as an updated risk
assessment for an extended recall of Takata airbags. The
increase in other provisions is mainly due to the review and
prioritization of the product portfolio at the Mercedes-Benz
Vans division.
Financing liabilities of €161.8 billion were above the level of
the previous year (2018: €144.9 billion). The increase, adjusted
for exchange-rates effects, of €14.9 billion was primarily due
to the refinancing of the growing leasing and sales-financing
business and higher leasing liabilities of €3.9 billion caused by
the application of single lessee accounting according to
IFRS 16. 53% of the financing liabilities were accounted for by
bonds, 25% by liabilities to financial institutions, 9% by liabili-
ties from ABS transactions and 8% by deposits in the direct
banking business.
Trade payables decreased compared with the prior year to
€12.7 billion (2018: €14.2 billion). The Mercedes-Benz Cars
division accounts for 64% (2018: 60%) of those payables, the
Daimler Trucks division accounts for 20% (2018: 24%) and the
Mercedes-Benz Vans division accounts for 7% (2018: 7%).
Other financial liabilities were nearly unchanged at €9.9 bil-
lion (2018: €10.0 billion) and mainly consist of liabilities from
residual-value guarantees, liabilities from wages and salaries,
deposits received and accrued interest on financing liabilities.
B | COMBINED MANAGEMENT REPORT | DAIMLER AG 89
Daimler AG
Condensed version according to the German Commercial Code (HGB)
In addition to reporting on the Daimler Group, the development
of Daimler AG is also described in this section.
Daimler AG is the parent company of the Daimler Group and its
headquarters are in Stuttgart.
On May 22, 2019, the Annual Shareholders' Meeting of Daimler
AG voted with 99.75% of the votes cast to hive down assets
and liabilities of the Mercedes-Benz Cars and Mercedes-Benz
Vans divisions and of the Daimler Trucks and Daimler Buses
divisions into two legally independent entities within the frame-
work of “Project Future.” The hive-down took place in accor-
dance with Section 123 Subsection 3 No. 1 of the German Trans-
formation Act (UmwG) into Mercedes-Benz AG and Daimler
Truck AG. The hive-down is based on the hive-down agreement
concluded between Daimler AG, Mercedes-Benz AG and
Daimler Truck AG on March 25, 2019. The hive-down became
effective upon being entered in the commercial register of
Daimler AG on October 31, 2019 (“completion date”). When
the hive-down became effective, the assets to be hived down
as defined in the hive-down agreement were transferred to
Mercedes-Benz AG and Daimler Truck AG under civil law by way
of partial universal succession at their carrying amounts. The
transfer of assets had a retroactive financial effect as of the
hive-down date of January 1, 2019. In addition, when the hive-
down became effective, further assets and liabilities as defined
by the agreements concluded between Daimler AG and
Mercedes-Benz AG and Daimler Truck AG within the hive-down
agreement were transferred to Mercedes-Benz AG and Daimler
Truck AG, respectively.
As of the hive-down taking effect, Daimler AG acts as an oper-
ational management holding company and provides services to
the Group companies. As the parent company, it also decides
on the Group’s strategy, decides on matters of strategic impor-
tance for business operations, and ensures regulatory, legal,
and compliance functions throughout the Group.
Under the existing control and profit-and-loss-transfer agree-
ments, the profits and losses of Mercedes-Benz AG and Daimler
Truck AG are transferred to Daimler AG.
The annual financial statements of Daimler AG are prepared in
accordance with the German Commercial Code (HGB). The
consolidated financial statements are prepared in accordance
with the International Financial Reporting Standards (IFRS),
as adopted by the European Union (EU). This results in some
differences with regard to recognition and measurement, pri-
marily relating to provisions, financial instruments, the leasing
business and deferred taxes.
In view of the new function of Daimler AG as an operational
management holding company, revenue and unit sales are no
longer the most important performance indicators; net profit
or loss is now the main performance indicator.
Due to the significant scope of the hive-down to Mercedes-
Benz AG and Daimler Truck AG, the figures of Daimler AG for
the 2019 financial year are not comparable with the prior-year
figures.
Profitability
The profitability of Daimler AG in the 2019 financial year was
affected by the hive-down of business operations to Mercedes-
Benz AG and Daimler Truck AG. The change in profitability
resulted in particular from the decrease in financial income of
€7.9 billion to a financial expense of €0.5 billion, as well as by
the lower tax expense of €1.1 billion. B.37
Daimler AG generated revenue of €2.0 billion primarily from
the provision of services to companies of the Group (2018:
€112.5 billion). The decrease in revenue was almost solely the
result of hiving down the business operations to Mercedes-
Benz AG and Daimler Truck AG.
Cost of sales comprises the services provided to Group com-
panies to generate sales revenue and, due to the new manage-
ment holding-company function, decreased to €2.0 billion
(2018: €103.2 billion).
Due to the new corporate structure of Daimler AG, no selling
expenses were incurred in 2019 (2018: €7.9 billion).
90 B | COMBINED MANAGEMENT REPORT | DAIMLER AG
General administrative expenses amounted to €1.0 billion
(2018: €2.3 billion). They include costs in connection with
“Project Future” amounting to €0.2 billion. The decrease in
general administrative expenses is caused by the hive-down.
Other operating expense amounted to €0.3 billion (2018:
€0.3 billion) and primarily comprises expenses of €0.2 billion
from increases in provisions for Group-external derivatives of
the vehicle business.
Financial income fell by €7.9 billion to a financial expense of
€0.5 billion, primarily due to a decrease of €11.8 billion in
income from investments in subsidiaries and associated com-
panies. This was mainly the result of expenses from the reas-
sessment of risks in connection with ongoing governmental
and legal proceedings and measures relating to Mercedes-
Benz diesel vehicles in various regions and markets, as well as
expenses in connection with an updated risk assessment for
an expanded recall of Takata-Airbags, which led to a loss trans-
fer from the affected company. On the other hand, interest
expense decreased by €4.2 billion, primarily in connection with
company pensions (€3.8 billion). This positive effect was
mainly the result of lower expenses from the change in the dis-
count rate and the compounding of the retirement benefit obli-
gation due to the transfer of pension obligations to Mercedes-
Benz AG and Daimler Truck AG, as well as the increased return
on the special-purpose assets compared with 2018. In addi-
tion, the contribution of pension obligations and special-purpose
assets to Daimler Pensionsfonds AG resulted in a one-time
interest expense in 2018.
The income tax expense amounted to €0.0 billion (2018: €1.1
billion). The decrease is due to the tax-loss situation of the cor-
porate group for tax purposes.
Net loss amounts to €1.7 billion (2018: net profit of €5.0 bil-
lion). This result is thus significantly below the expectation
stated in the Outlook chapter of Annual Report 2018. This
development is primarily due to the stronger than expected
decrease in financial income, which was mainly caused by
the lower income from subsidiaries and associated companies
due to loss transfers from major subsidiaries.
The economic situation of Daimler AG in its management
holding-company function depends mainly on the development
of its subsidiaries. Daimler AG participates in the operating
results of its subsidiaries through dividend distributions and
profit-and-loss transfers. 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.
B.37
Condensed income statement of Daimler AG
In millions of euros
Revenue
Cost of sales (including R&D expenditure)
Selling expenses
General adminstrative expenses
Other operating expense
Operating profit
Financial expense/income
Income taxes
Net loss (2018: net profit)
2019
2018
2,019
-1,959
-
-964
-272
-1,176
-546
44
-1,678
112,491
-103,232
-7,904
-2,304
-292
-1,241
7,318
-1,055
5,022
Transfer from (2018: transfer to) retained
earnings
2,641
-1,545
Distributable profit
963
3,477
Financial position, liquidity and capital
resources
The balance sheet total of €99.4 billion is €17.8 billion lower
than at the end of 2018. Table B.38 shows the balance sheet
of Daimler AG at December 31, 2019 compared with the
balance sheet before the hive-down to Mercedes-Benz AG and
Daimler Truck AG (December 31, 2018) and after the hive-
down (January 1, 2019).
Non-current assets increased during the year by €2.1 billion
to €57.2 billion, caused by the €12.9 billion increase in finan-
cial assets, which resulted in particular from corporate restruc-
turing within the framework of “Project Future.” The increase
also reflects a capital contribution at the subsidiary LEONIE FS
DVB GmbH and the acquisition within the Group of Mercedes-
Benz Bank AG from Daimler Mobility AG. The decreases of €9.3
billion in property, plant and equipment and of €1.5 billion in
intangible assets are mainly due to corporate restructuring
within the framework of “Project Future.”
Receivables, securities and other assets decreased com-
pared with December 31, 2018 by €5.9 billion to €38.9 billion.
This development mainly reflects a decrease of €9.3 billion
from the hive-downs for corporate restructuring within the
framework of “Project Future.” Furthermore, other securities
decreased by €1.1 billion and other assets decreased by €1.1
billion in 2019, primarily due to lower tax-refund claims. On
the other hand, receivables due from subsidiaries increased by
€5.6 billion.
Cash and cash equivalents decreased from €6.4 billion to
€2.9 billion. The decrease includes a transfer of €1.5 billion as
part of corporate restructuring within the framework of
“Project Future.”
Gross liquidity – defined as cash and cash equivalents and
other marketable securities as well as fixed-term deposits pre-
sented under other assets – decreased by €4.7 billion to €9.6
billion on the balance sheet date. The reasons for the decrease
in gross liquidity include the hive-downs for corporate restruc-
turing within the framework of “Project Future” in an amount
of €1.5 billion and the reduction in other securities of €1.1 bil-
lion in 2019.
Cash provided by operating activities amounted to €6.8 bil-
lion in 2019 (2018: €13.8 billion). The decrease resulted in par-
ticular from lower dividend distributions from subsidiaries and
the end of cash flows from operations in the vehicle business.
Another factor is that the amount for the previous year includes
positive effects from trade receivables and payables with Ger-
man and foreign companies of the Group and with external
companies, which are no longer effective at Daimler AG due to
the hive-down.
Cash flows from investing activities resulted in a net
cash outflow of €7.6 billion in 2019 (2018: €14.7 billion). The
decrease is due in particular to the end of investments by
Daimler AG in intangible assets and property, plant and equip-
ment, caused by the hive-down of business operations to
Mercedes-Benz AG and Daimler Truck AG. Compared with the
previous year, there were also lower cash outflows in the
area of financial assets from corporate restructuring within the
framework of “Project Future.” Furthermore, there were
positive effects from acquisitions and disposals of securities
conducted in the context of liquidity management.
Cash flows from financing activities resulted in a net cash
outflow of €2.6 billion (2018: inflow of €5.5 billion). The change
is explained by higher receivables from the financing of subsid-
iaries and the lower increase in liabilities from the Group's
internal transactions in connection with central financial and
liquidity management. On the other hand, a cash inflow resulted
in 2019 from higher external financing liabilities. Cash flows
from financing activities include the payment of the dividend for the
year 2018 in an amount of €3.5 billion.
Equity decreased in 2019 by €5.2 billion to €38.1 billion, pri-
marily reflecting the decrease in distributable profit due to the
dividend payment for 2018. In addition, €2.6 billion was trans-
ferred from retained earnings in 2019. The equity ratio at
December 31, 2019 was 38.3% (December 31, 2018: 36.9%).
Daimler AG holds no treasury shares at December 31, 2019.
Provisions decreased compared with December 31, 2019 by
€14.8 billion to €1.6 billion. This was mainly the result of the
transfer of provisions of €14.7 billion from Daimler AG to
Mercedes-Benz AG and Daimler Truck AG as part of the corpo-
rate restructuring within the framework of “Project Future.”
On the other hand, additional provisions were recognized of €0.5
billion for internal derivatives in connection with the hive-down.
B | COMBINED MANAGEMENT REPORT | DAIMLER AG 91
B.38
Balance sheet structure of Daimler AG
Dec. 31,
2019
Jan. 1,
20191
Dec. 31,
2018
in millions of euros
Assets
Non-current assets
57,214
50,973
Inventories
Receivables, securities and
other assets
Cash and cash equivalents
Current assets
Prepaid expenses
Equity and liabilities
Share capital
(conditional capital €500 mil-
lion)
Capital reserve
Retained earnings
Distributable profit
Equity
Provisions for pensions and
similar obligations
Other provisions
Provisions
Trade payables
Other liabilities
Liabilities
Deferred income
-
1
38,925
2,942
41,867
285
99,366
35,437
4,819
40,257
300
91,530
117,160
55,092
10,524
44,784
6,354
61,662
406
3,070
3,070
3,070
11,480
22,541
963
38,054
94
1,511
1,605
227
59,474
59,701
6
11,480
25,182
3,477
43,209
123
2,136
2,259
428
45,634
46,062
0
11,480
25,182
3,477
43,209
838
15,595
16,433
7,210
49,232
56,442
1,076
99,366
91,530
117,160
1 Amounts following the hive-down. Deviations from the hive-down
balance sheet (published in the hive-down report of May 22, 2019)
are the result of subsequent adjustments in accordance with the
hive-down agreement.
The reduction was also caused by provisions for taxes and per-
sonnel and social provisions. There was an opposing effect from
increases in provisions for derivative financial instruments.
Provisions for pensions and similar obligations amounted to
€0.1 billion at December 31, 2019 (2018: €0.8 billion). The
decrease is almost solely attributable to the transfer of pen-
sion obligations and special-purpose assets to Mercedes-Benz
AG and Daimler Truck AG.
Liabilities increased by €3.3 billion to €59.7 billion. This was
primarily due to the increase of €11.9 billion in liabilities to sub-
sidiaries, which is mainly due to losses transferred from sub-
sidiaries. In addition, bonds and other debt instruments were
issued in an amount of €1.5 billion. On the other hand, liabili-
ties decreased by €10.4 billion due to the hive-downs for cor-
porate restructuring within the framework of “Project Future.”
92 B | COMBINED MANAGEMENT REPORT | DAIMLER AG
Risks and opportunities
Outlook
The business development of Daimler AG as the operational
management holding company mainly depends on the develop-
ment of its worldwide subsidiaries and is therefore – through
the profit and loss contributions from subsidiaries and associ-
ated companies – fundamentally subject to the same risks
and opportunities as the Daimler Group. Daimler AG generally
participates in the risks of its subsidiaries and associated com-
panies in line with the percentage of its respective equity inter-
est. The risks and opportunities are described in the Risk and
Opportunity Report. Risks may additionally arise from relations
with subsidiaries and associated companies in connection with
statutory or contractual obligations (in particular with regard to
financing), as well as from the impairment of investments in
subsidiaries and associated companies.
Furthermore, pursuant to Section 133 Subsections 1 and 3 of
the German Transformation Act (UmwG), Daimler AG is jointly
and severally liable for liabilities of €24.3 billion that were
transferred to Mercedes-Benz AG and Daimler Truck AG within
the framework of “Project Future.” According to the current
appraisal, due to the assessment of the creditworthiness of
Mercedes-Benz AG and Daimler Truck AG, an actual cash out-
flow for Daimler AG is considered to be unlikely.
The financial position, cash flows and profitability of Daimler
AG depend on the business development and performance of
its operating subsidiaries, in whose development it participates
through profit-and-loss-transfer agreements and dividend dis-
tributions.
We expect Daimler AG to achieve significantly improved profit-
ability in 2020 compared with the year 2019. We assume that
the operating performance will improve, due among other things
to cost savings and the end of costs for “Project Future.” We
also anticipate a significant improvement in financial income as
a result of improved profit transfers from subsidiaries.
In addition, due to the interrelations between Daimler AG and
its subsidiaries, we refer to the statements in the Outlook
chapter, which largely reflect our expectations also for the
parent company.
B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY 93
Sustainability and Integrity
Sustainability at Daimler
At Daimler, sustainability means generating economic, environ-
mental and social value added for all of our stakeholders: cus-
tomers, investors, employees, business partners and society as
a whole. We believe that the solutions we offer form a central
component of future mobility systems that will be climate-
neutral and sustainable. Together with players from industry,
government and society we thus create the foundation for
our future business success and value added for all of society.
The basis for all of this is our sustainable business strategy.
Among other things, this strategy formulates our ambitions,
goals and measures for managing the economic, environmental
and social impact of our business activities. This applies not
only to our manufacturing locations but also to our entire
upstream and down stream value chain.
Additional information on “Sustainability at Daimler” can be
found in the “Non-Financial Report” section of this Annual
Report E pages 202 ff. The “Non-Financial Report” is also
available on the Internet at w daimler.com/nonfinancial-
report. The new Daimler Sustainability Report for financial year
2019 will be available on the Group’s website at the beginning
of April 2020. w daimler.com/sustainability
Research and development
Research and development as key success factors
Research and development have always played a key role at
Daimler. Gottlieb Daimler and Carl Benz invented the auto-
mobile more than 130 years ago. Today, we are shaping the
future of mobility anew. Our goal is to offer our customers
fascinating products and customized solutions for needs-ori-
ented, safe and sustainable mobility. Our technology portfolio
and our key areas of expertise are focused on this objective.
The expertise, creativity and drive of our employees in research
and development are key factors behind our vehicles’ market
success. At the end of 2019, Daimler employed 24,300 men and
women at its research and development units around the world
(2018: 25,600). A total of 16,200 of those employees
(2018: 17,700) worked at Group Research & Mercedes-Benz
Cars Development, 5,600 (2018: 5,300) at Daimler Trucks,
1,200 (2018: 1,300) at Mercedes-Benz Vans and 1,300 (2018:
1,300) at Daimler Buses. Around 5,100 researchers and
development engineers (2018: 5,800) worked outside Germany.
Global research and development network
With our global research and development network, we are
present in the key markets with direct proximity to our custom-
ers. Our biggest facilities are in Sindelfingen and Stuttgart-
Untertürkheim in Germany. Our most important research facili-
ties in North America are the US R&D locations in Sunnyvale,
California; Long Beach, California; Portland, Oregon; and Red-
ford, Michigan. Our most important facilities in Asia are in
Bangalore, India; the Global Hybrid Center in Kawasaki, Japan;
and our research and development center in Beijing, China.
Mercedes-Benz Research & Development India (MBRDI, with
headquarters in Bangalore) is Daimler’s largest research and
development center outside Germany. Activities at MBRDI
focus on digitalization, simulations and data science. In Nov-
ember 2018, we announced plans to build a further Research
and Development (R&D) Tech Center in China with a total
investment of approximately €145 million. This new center
will further expand our presence in what is now our biggest
single market. It will also be our second major R&D site in
Beijing, following the Mercedes-Benz R&D Center, which was
established in China in 2014. The new R&D Tech Center in
China is scheduled to begin operating in 2020.
Along with our internal activities, we also maintain close con-
tacts with external research institutions. For example, we work
together with various renowned research institutes around
the world and participate in international exchange programs
for next-generation scientists.
We are open to cooperation – worldwide. Our partners include
promising startups such as what3words and Anagog, as well
as suppliers such as Bosch and, in selected fields, competitors
such as BMW. Some of our Chinese partners are Baidu, Alibaba
and Tsinghua University. We operate digital hubs as develop-
ment centers around the world, for example in Berlin, Seattle,
Lisbon and Tel Aviv.
94 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY
B.39
Research and development expenditure
In billions of euros
total
thereof capitalized
10
9
8
7
6
5
4
3
2
1
0
2015
2016
2017
2018
2019
B.40
Research and development expenditure by division
In millions of euros
Daimler Group
thereof capitalized
Mercedes-Benz Cars
thereof capitalized
Daimler Trucks
thereof capitalized
Mercedes-Benz Vans
thereof capitalized
Daimler Buses
thereof capitalized
2019
2018
19/18
% change
9,662
3,076
7,518
2,904
1,490
53
543
96
203
23
9,107
2,526
6,962
2,269
1,295
40
666
176
199
41
+6
+22
+8
+28
+15
+33
-18
-45
+2
-44
Targeted involvement of the supplier network
In order to achieve our ambitious goals, we also cooperate very
closely with the research and development units of our suppli-
ers. Daimler must be closely intermeshed with supplier partners
in order to deal with the rapid pace of technological change
in the automotive industry and the need to quickly bring new
technologies to market maturity. Such cooperation is all the
more important in light of the increasing digitalization of pro-
cesses throughout all stages of the value chain. Strong part-
ners are also essential for our efforts to develop and offer new
concepts for future mobility. As part of our joint research and
development work, we aim to ensure that the Group retains
the key technological expertise it needs in order to maintain
the uniqueness of our brands and to safeguard the future of
the automobile in general.
Protecting our brands and patents
Without the protection and management of its patents, brands
and designs, Daimler could never have become as successful
as it is today. That is why we seek to effectively protect and
manage the Group’s intellectual property and the innovations
that inspire our customers around the globe. In this manner,
we also intend to ensure the successful continuation of our tra-
dition that goes back more than 130 years. We upheld this
tradition in 2019 by registering more than 2,100 new ideas for
patents (2018: 1,900), with an increasing focus on the future-
oriented fields of connectivity, automated and autonomous
driving, and electric drive systems. In addition to industrial
property rights, which safeguard our innovations for future
mobility over the long term, the unique visual aspects of our
products are protected with more than 7,500 registered
designs (2018: 7,500). Our portfolio of more than 34,500 trade-
mark rights worldwide (2018: 36,300) also serves to protect
the Mercedes-Benz brand, our new EQ brand for electric mobil-
ity, and all of our other product brands in the relevant markets.
In order to safeguard this intellectual property, we established
an IP competence center for all brands and technologies last
year under the name Daimler Brand & IP Management GmbH &
Co. KG. This company registers and manages Daimler’s port-
folio of patents, brands, trademarks, designs and domains,
handling everything from the process of invention disclosure to
the granting or registration of the intellectual property right.
In the event of disputes regarding improper use of Daimler’s
intellectual property, the team takes over its defense before
the authorities and the courts.
€9.7 billion for research and development
We want to continue helping to shape mobility through our pio-
neering innovations in the coming years, while moving ahead
with digitalization throughout the entire Group. We therefore
slightly increased our very high level of investment in research
and development to €9.7 billion in 2019 (2018: €9.1 billion).
At the beginning of 2019 we assumed that development would
remain at the same level as the previous year. Of that amount,
€3.1 billion (2018: €2.5 billion) was capitalized as development
costs, which represents a capitalization rate of 32% (2018:
28%). The amortization of capitalized research and development
expenditure totaled €1.8 billion during the year under review
(2018: €1.5 billion). With a rate of 5.6% (2018: 5.4%), research
and development expenditure also remained at a high level in
comparison with revenue. Along with the production launches,
research in the year under review focused on the further
development of our platforms and electric and conventional
drivetrains. Digitalization and automated and autonomous
driving are also becoming increasingly important.
Activities at Mercedes-Benz Cars in the year under review were
marked by an increasing focus on digitalization, automated and
autonomous driving, and the further development of electric
drive systems and a new platform for vehicles with all-electric
drive systems.
Automated driving, electromobility and connectivity played an
important role at Daimler Trucks. The subsequent generations
of existing products, fuel efficiency and emissions reduction
were further focal points, along with customized products and
technologies for future growth markets.
Activities at Mercedes-Benz Vans centered around the further
development of the Sprinter, the Vito and the V-Class. How-
ever, Mercedes-Benz Vans is also forging ahead with the elec-
trification of both its commercial and private model series.
Daimler Buses primarily focused its development activities
on new products and measures to further reduce fuel consump-
tion. Alternative drive systems, in particular electrification
technology and other forward-looking projects related to auto-
mated and autonomous driving, also played a key role during
the year under review. B.39 B.40
B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY 95
Innovation and safety
New mobility is taking shape and is becoming a reality
The automotive industry is undergoing a profound transfor-
mation. As the inventor of the automobile and a provider of
personal mobility solutions ranging from smart vehicles to
the broad range of Mercedes-Benz cars and Mercedes-Benz
vans, we seek to shape and lead this extensive transformation.
Technical challenges still exist with regard to linking the four
key fields that are decisive for the future of mobility – connec-
tivity (Connected), automated and autonomous driving (Auto-
nomous), flexible use and services (Shared & Services) and
electric drive systems (Electric). In the meantime, our electric
mobility offensive in the field of cars is being consolidated
under our EQ technology and product brand, which represents
an important component on the road to emission-free driving
and an effective instrument for achieving ever more ambitious
global CO2 reduction targets.
Connected: MBUX and Mercedes me
The Mercedes-Benz User Experience, MBUX, was expanded
in 2019 to include several new features. In addition, the system
was introduced in numerous new model series for the first
time. The new features include the “In Car Store,” which can
be used to order navigation services, digital radio or smart-
phone integration functions. MBUX also makes it possible to
pay street parking fees quickly and easily. Experience with the
A-Class shows that customers like to invest in entertainment
and connectivity features. Two out of every three customers
now order the high-end version of the MBUX system.
Since it launched Mercedes me in 2014, Mercedes-Benz has
developed more than 80 mobility-related digital services. New
services are also constantly being introduced and made avail-
able in more and more markets. Mexico, Malaysia and India
have recently been added, which means that Mercedes me can
now be used in 47 markets. The activation rate for Mercedes
me in new Mercedes-Benz vehicles is over 90%, which translates
into approximately four million active users at the moment.
EQ models equipped with Mercedes me offer important func-
tions for electric mobility today and in the future, including
navigation, the display of the remaining vehicle range, and an
auxiliary climate control system. The features can be pro-
grammed directly via MBUX or the Mercedes me app. The EQ-
specific content in MBUX includes the display of the state of
charge and the energy flow. Drive programs, charging current
and departure time can also be controlled and set via MBUX.
The ENERGIZING comfort control unit connects the various
comfort systems in the vehicle. A new feature that is now avail-
able offers intelligent recommendations via the ENERGIZING
COACH system. This service uses an intelligent algorithm to
recommend one of the ENERGIZING comfort control programs
suited to the given situation. The aim here is for the occupants
to feel comfortable and relaxed even during demanding or
monotonous journeys.
The Bertha tank app allows drivers to quickly and easily locate
the nearest or cheapest service station, or the one best suited
to their needs in the immediate area or at a desired location.
Drivers can also use the app’s integrated payment function to
pay for fuel directly at the vehicle.
At the end of 2019, together with the district of Zollernalb, we
announced that we would run a pilot project to determine
how car-to-X communication can be used to enhance safety on
wintry roads and improve the efficiency of municipal winter
services. Car-to-X is a term used to describe communication
between vehicles, as well as communication between vehicles
and the transport infrastructure. Mercedes-Benz passenger
cars that are equipped with car-to-X technology, and whose
owners have activated the Live Traffic Service, are providing
the necessary data for the pilot tests. When the ESP® or ABS
sensors in these vehicles detect slippery road conditions, this
information, including the associated GPS data, is sent to the
Daimler Vehicle Backend in real time via the mobile phone net-
work. The anonymized information is displayed in real time on
digital maps in the Zollernalb district’s two road-maintenance
depots.
New forms of automated driving
We have teamed up with the BMW Group in order to reach a
milestone on the road to automated driving. We plan to work
together with BMW to develop the next generation of technolo-
gies for driving assistance systems, automated driving on high-
ways and automated parking systems. The partnership is open
to other vehicle manufacturers and technology partners. In
addition, the results of the partnership will be offered to other
OEMs for licensing purposes.
We are also working with Bosch on the development of an auto-
mated driving system operating at SAE Level 4/5 and designed
especially for urban traffic. In December 2019, we began offer-
ing a select group of users a ridesharing service using auto-
matically driving Mercedes-Benz S-Class vehicles in the Silicon
Valley city of San José. Daimler Mobility AG is operating and
managing the test fleet and the associated app-based mobility
service.
Shared & Services: a joint venture with the BMW Group
Daimler AG and the BMW Group are combining their mobility
services in the YOUR NOW joint ventures with the goal of cre-
ating a new global player that will introduce sustainable urban
mobility solutions that consistently focus on customer utility.
Together we are investing more than one billion euros in the
further expansion and close interconnection of existing services
in the areas of ride hailing, multimodal platforms, car sharing,
parking and charging. The products and services of the joint
ventures are being further systematically aligned with customer
requirements and have been consolidated into three units:
1. FREE NOW & REACH NOW. 2. SHARE NOW. 3. PARK NOW &
CHARGE NOW.
Electric mobility offensive – new products and highlights
at IAA 2019
Mercedes-Benz is forging ahead with the electrification of its
vehicles. We plan to electrify the entire Mercedes-Benz Cars
portfolio as soon as 2022, which means that various electric
alternatives are to be offered in every segment – from compact
cars to SUVs. We expect all-electric vehicles to account for
up to 25% by 2025.
We have also set other goals within the framework of our
“Ambition 2039” strategy. For example, plans call for the
Mercedes-Benz Cars business division to offer a completely
CO2-neutral new vehicle fleet by 2039. In addition, we want
more than half of our vehicle sales in 2030 to consist of vehi-
cles with electric drive systems, i.e. all-electric and plug-in
96 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY
hybrid vehicles. By 2030, nearly all of our production sites in
Germany will use electricity generated exclusively from renew-
able sources. We are also looking to achieve CO2-neutral pro-
duction throughout Europe as of 2022, while our long-term
plans call for the value chain to be transformed into a value
cycle that will incorporate the entire supplier chain. As we
move ahead here, electric mobility will become our core busi-
ness, and future vehicle architectures will be designed for elec-
tric mobility from the very beginning.
The Mercedes-Benz VISION EQS had its world premiere at the
press conference for the 2019 IAA International Motor Show
in Frankfurt. This show car offers a preview of the future of
sustainable modern luxury. It is a premium electric sedan that
emphasizes sustainability as its central theme. That’s because
the VISION EQS show car is based on a new and fully variable
electric drive system platform that is scalable in a variety of
ways and can be used in different vehicle models.
Plug-in hybrids offer customers the best of two worlds: they
can be driven in the all-electric mode in cities, while on long
journeys they benefit from the combustion engine’s range.
Plug-in hybrid technology makes vehicles more efficient overall
– it allows for braking-energy recovery on the one hand and
the use of the combustion engine at more favorable operating
points on the other.
At the end of 2019, Mercedes-Benz had more than ten plug-in
hybrid models on offer – an attractive portfolio ranging from
compacts to the Mercedes-Benz S-Class flagship model. Our
goal here is to offer our customers well over 20 hybrid model
variants by 2020.
With the A 250 e (fuel consumption combined: 1.6 – 1.4 l/100 km;
CO₂ emissions combined: 36 – 32 g/km; power consumption
combined: 15.3 – 14.6 kWh/100 km)1, the A 250 e sedan (fuel
consumption combined: 1.5 – 1.3 l/100 km; CO₂ emissions
combined: 35 – 31 g/km; power consumption combined:
15.2 – 14.5 kWh/100 km)1 and the B 250 e (fuel consumption
combined: 1.6 – 1.4 l/100 km; CO2 emissions combined:
36 – 32 g/km; power consumption combined: 15.4 – 14.7 kWh/
100 km)1, three compact-family models equipped with the
third-generation hybrid system were unveiled for the first time.
The electric mobility offensive is also being systematically
implemented in the SUV segment. The new GLE 350 de
4MATIC (fuel consumption combined: 1.3 – 1.1 l/100 km; CO2
emissions combined: 34 – 29 g/km; power consumption
combined: 28.7 – 25.4 kWh/100 km)1 has a battery with a
capacity of 31.2 kWh, which gives it an all-electric range
of more than 100 kilometers, assuming an appropriate driving
style.
The GLC also enters its new model year with an even more
striking design, the MBUX infotainment system and the latest
driving assistance systems. As an all-wheel drive SUV, the GLC
300 e 4MATIC (fuel consumption combined: 2.5 – 2.2 l/100 km;
CO2 emissions combined: 58 – 51 g/km; power consumption
combined: 18.3 – 16.5 kWh/100 km)1 is also an ideal towing
vehicle.
Solutions for the electric charging infrastructure
Our electric mobility offensive also includes the latest solutions
for the electric charging infrastructure. Studies estimate that
about 70 to 80% of the energy required for charging processes
in the EU and the USA will be covered at home or at the work-
place, and only about 20 to 30% at semi-public or public instal-
lations. We offer the right solutions in all of these areas. Such
solutions include charge@home for fast and safe recharging at
home with the new Mercedes-Benz Wallbox, and Mercedes
me Charge for easy and convenient charging on the road. With
the charge@Daimler project, we are consolidating our activities
relating to the establishment of an intelligent charging infra-
structure at all Daimler locations in Germany, while with
charge@highway we are forging ahead with an adequate infra-
structure for battery charging on long journeys. Through the
joint venture IONITY, we are working together with several
other vehicle manufacturers to establish a powerful fast-charg-
ing network for electric vehicles in Europe. In addition, our
charge@fleet project offers an intelligent charging solution for
companies and fleet operators.
Modern combustion engines remain indispensable
Combustion engines should continue to form the backbone
of global personal mobility for many years to come. This makes
it all the more important to further improve the efficiency
and environmental compatibility of combustion engines.
As planned, we continued and expanded our engine offensive
at Mercedes-Benz in the year under review. Our new highly
efficient four and six-cylinder engines are already available
in diesel or gasoline versions in numerous models. We are
convinced that diesel will continue to be a firm element of the
drive-system mix in the future, not least due to the low CO2
emissions of diesel engines.
Significantly reduced NOX emissions are a characteristic fea-
ture of vehicles that are certified in accordance with the Euro
6d-TEMP standard. All Mercedes-Benz passenger cars that can
be ordered as new vehicles now comply with this standard.
2019: a year of safety anniversaries
Vehicle safety is one of our core areas of expertise and a key
component of our product strategy. Our vision of accident-free
driving will continue to motivate us to make mobility as safe
as possible for everyone in the future. This year we once again
presented an Experimental Safety Vehicle: the ESF 2019.
This new ESF offers an insight into the ideas that our safety-
research experts are currently working on. The vehicle features
more than a dozen innovations including both near-series
developments and developments that look well into the future.
Examples here include the PRE-SAFE® child seat concept
and a new holistic safety concept for the automated drive pro-
gram. The ESF also features a new type of driver airbag and
a unique steering-wheel and pedal system.
1 The stated figures are the measured “NEDC CO2 figures” within the mean-
ing of Art. 2 No. 1 Commission Implementing Regulation (EU) 2017/1153.
The fuel consumption figures were calculated on the basis of these fig-
ures. The range and the electrical consumption were determined on the
basis of Commission Regulation (EC) No. 692/2008. A different value is
applied in accordance with the German Electric Mobility Act (EmoG). A
higher figure may apply as the basis for calculating the motor vehicle tax.
Further information on official fuel consumption figures and the official
specific CO2 emissions can be found in the guide “Information on the fuel
consumption, CO2 emissions and electric power consumption of new
cars,” which is available free of charge at all sales dealerships and from
Deutsche Automobil Treuhand GmbH at www.dat.de.
B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY 97
The year 2019 was a special year for safety milestones as well,
as it marked the 50th year that our experts have been exa-
mining serious accidents involving current vehicles bearing the
three-pointed star. The knowledge gained at Mercedes-Benz
Accident Research is used to improve updated and new models
and their design. Mercedes-Benz Accident Research also
established itself on an international scale several years ago by
bringing together its German experts with colleagues in India
and China. Here, the accident researchers in Asia benefit from
the expertise from Sindelfingen. Augmented reality glasses
enable the colleagues to exchange information with one another
directly and in real time, and thus to conduct joint analyses,
even though the German accident research experts are at a
different location. The first crash test in the brand’s history
was conducted 60 years ago, thus ushering in a new era for
safety research at Mercedes-Benz. The Technology Center for
Vehicle Safety (TFS) in Sindelfingen can performs approxi-
mately 900 crash tests each year, as well as about 1,700 sled
tests. In the latter, a test mule (body shell or test assembly)
is mounted on a test sled and subjected to the forces arising
during a real vehicle crash. We have repeatedly set new stan-
dards for crash test procedures and testing facilities that have
been adopted across the industry and have resulted in
improved vehicle safety in the interests of all road users on a
lasting basis. Mercedes-Benz’ vehicle safety unit is currently
testing the use of X-ray technology in crash tests in coopera-
tion with the Fraunhofer Institute for High-Speed Dynamics
and the Ernst Mach Institute (EMI) in Freiburg. This method
enables us to investigate the behavior of safety-relevant com-
ponents by taking a look inside the parts.
STARTUP AUTOBAHN begins its seventh program round
Launched in Stuttgart, successful worldwide: STARTUP AUTO-
BAHN was launched on the initiative of Daimler AG, which in
2016 wanted to create an innovative connection between the
world of startups and that of the well-established corporations
in manufacturing sectors such as the automotive industry.
Daimler founded the innovation platform STARTUP AUTOBAHN
in cooperation with the startup accelerator Plug and Play, the
University of Stuttgart, and the research factory ARENA2036.
Daimler organizes two three-month pilot programs annually,
each of which concludes with an EXPO DAY.
In the summer of 2019, STARTUP AUTOBAHN launched its sev-
enth program under the motto “THE NEXT GREEN THING” –
with a clear focus on sustainability. During the round’s scout-
ing phase, Daimler examined ideas from more than 500
startups worldwide in the areas of climate protection and air
quality, conservation of resources and livable cities. Around 30
of these ideas were then analyzed in detail by numerous
experts, after which a few were selected for further develop-
ment in specific collaboration projects. The range of topics is
varied, providing an indication of the wealth of ideas available
in the startup scene. One startup, for example, extracts CO2
from the air and uses it to produce polymers that can then be
utilized as either soft or hard foam materials in car seats.
Daimler Trucks & Buses: moving the world – sustainably
Transport is the backbone of our economy and our modern
way of life. Without trucks and buses, factories could not man-
ufacture anything, supermarkets couldn’t sell anything and
people’s mobility would be severely restricted. In other words,
the world would come to a standstill. Our customers move the
world – and our goal at Daimler Trucks & Buses is to offer our
customers the products and services that increase their busi-
ness success. In the future, we will focus in particular on the
CO2-neutral transport of goods and people in driving operation
(tank to wheel) and on accident-free driving. Both of these
fields are part of the sustainable corporate strategy pursued at
Daimler Trucks & Buses, which is one of the world’s leading
manufacturers of commercial vehicles. Within the framework
of this strategy, the company is developing vehicles and ser-
vices that move our society forward efficiently and electrically,
automatically, in a reliable network of connected vehicles and
infrastructure.
Daimler Trucks: efficient and electric
Daimler Trucks & Buses aims to offer only new vehicles that are
CO2-neutral in driving operation (“tank-to-wheel”) in the major
markets of Europe, Japan and the NAFTA region by 2039. As early
as 2022, the company plans to have a vehicle portfolio com-
prising series-produced vehicles with battery-electric drive
systems in the main sales regions of Europe, the United States
and Japan. Plans also call for all Daimler Trucks & Buses plants
in Europe to be CO2-neutral by 2022. All of the company’s
other production facilities will then follow. Light-, medium- and
heavy-duty trucks equipped with battery-electric drive are
already being tested extensively by customers: the light-duty
FUSO eCanter in large cities around the world, the heavy-duty
Mercedes-Benz eActros in Germany and Switzerland, and the
medium-duty Freightliner eM2 and heavy-duty Freightliner
eCascadia in the United States.
All-electric FUSO eCanter distribution trucks have now been
driven for more than one million kilometers in locally emission-
free urban distribution haulage. This figure is rather remark-
able given the fact that a FUSO eCanter generally only clocks
up around 30 to 80 kilometers each day in local distribution
operations. Around 150 vehicles are now being operated by
customers in New York, Tokyo, Berlin, London, Amsterdam,
Paris and Lisbon. In March 2019, Penske Truck Leasing, one of
the biggest fleet operators in the United States, also began
using FUSO eCanter models. The FUSO eCanter is thus the
third electric truck model series from Daimler Trucks in the
Penske fleet (the company already uses the eCascadia and the
eM2 from the Freightliner sister brand).
The Mercedes-Benz eActros all-electric truck has been proving
its worth for customers under tough real operating conditions
since autumn 2018. As part of the eActros “Innovation Fleet,”
Mercedes-Benz Trucks began to hand over a total of ten 18
and 25-ton trucks to customers in Germany and Switzerland in
the fall of 2018 for testing under real conditions. The analysis
of tens of thousands of kilometers driven by customers, as well
as close communication with drivers, dispatchers and fleet
managers, have enabled the experts at Mercedes-Benz Trucks
to obtain extensive knowledge about the trucks and their
operation. The findings are directly incorporated into the further
development of the eActros as it moves toward series produc-
tion, which is scheduled to begin in 2021.
Daimler Trucks is also further expanding its field tests for
medium and heavy-duty electric trucks in the United States.
The Freightliner eCascadia and eM2 are scheduled to be
launched on the market in 2021.
In November 2019, the E-Mobility Group at Daimler Trucks &
Buses introduced a new service for truck customers that offers
a comprehensive ecosystem for launching an electric transport
logistics system. The service includes consulting and the cre-
98 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY
ation of a suitable charging infrastructure for electric trucks.
The modular program covers not only personal and individual
consulting but also digital applications that make it easier to
get started with electric mobility. The first step will focus on
the markets of Europe, North America and Japan.
By the second half of this decade, Daimler Trucks & Buses
plans to extend its range of models to include hydrogen-pow-
ered production vehicles. With this in mind, Daimler Trucks
presented the Vision F-Cell fuel-cell prototype from FUSO at
the Tokyo Motor Show in Japan at the end of October 2019,
thus systematically intensifying its efforts to step up activities
in the area of hydrogen technology.
Automated Daimler Trucks: aiming for more safety
The vision of accident-free driving has been guiding the activi-
ties at Daimler Trucks & Buses for decades now. State-of-the-
art active safety systems hold the key to transforming the
vision into a reality, and the company has already done a great
deal of pioneering work in this regard. For example, numerous
safety systems that are now the industry standard were first
introduced in Mercedes-Benz trucks. Close cooperation within
the Group means that these new technologies quickly make
their way into other brands from Daimler Trucks.
At the beginning of 2019, Daimler Trucks presented the new
Freightliner Cascadia – the first partially automated (SAE Level
2) series production truck for North America – at the Con-
sumer Electronics Show (CES) in Las Vegas. With Detroit Assur-
ance 5.0 featuring Lane Keeping Assist in the new Freightliner
Cascadia and with Active Drive Assist in the Mercedes-Benz
Actros and the FUSO Super Great, Daimler Trucks began offer-
ing partially automated driving features (SAE Level 2) in pro-
duction trucks to customers in the United States, Europe and
Japan in 2019. The new systems can assist the driver with
braking, accelerating and steering the vehicle. Unlike systems
that do not go into action until a certain speed is reached,
Active Drive Assist/Detroit Assurance 5.0 can assist the driver
with partially automated driving functions in all speed ranges
for the first time in a production truck. Since November 2019,
customers in Asia who purchase a new FUSO Super Great
(SAE Level 2) have also been benefiting from our global exper-
tise in the area of automated driving.
In addition to developing active safety systems, Mercedes-Benz
Trucks is now introducing such systems even more systemati-
cally on a broad basis. For example, starting in January 2020,
the premium truck manufacturer will offer the latest generation
of its emergency braking system (ABA 5) as standard equip-
ment in its heavy-duty model series throughout Europe. The
Sideguard Assist system, which was presented for the first
time in 2016, is now available not only ex works but also as a
comparable retrofit solution. In this manner, Daimler Trucks &
Buses is meeting its social responsibility to prevent accidents
involving commercial vehicles to the greatest possible extent
through the use of active safety systems.
Developing and testing highly automated trucks
(SAE Level 4)
In the transportation industry, SAE Level 4 is the next logical
step after Level 2 to increase efficiency and productivity for
customers and significantly reduce costs per kilometer.
Daimler Trucks is thus skipping the intermediate step of condi-
tional automation (SAE Level 3). Level 3 does not offer truck
customers any significant advantage over the current situation,
as the higher costs of the technologies required for it are not
matched by corresponding benefits in practice.
In order to accelerate this development, in March 2019 Daimler
Trucks entered into a partnership with Torc Robotics, a pio-
neering US company in the field of automated driving. The
partners plan to jointly develop and market highly automated
production trucks (SAE Level 4) in the United States. In June
2019, Daimler Trucks combined all of its global expertise and
activities in the field of automated driving into the Daimler
Trucks Autonomous Technology Group. The new unit is respon-
sible for the formulation and implementation of an overall
strategy for automated driving, including all research and
development activities and the establishment of the required
infrastructure and network for vehicle operation. Daimler
Trucks’ goal for the Autonomous Technology Group is to bring
highly automated trucks (SAE Level 4) to market maturity
within a decade. In September 2019, Daimler Trucks and Torc
Robotics began testing highly automated trucks with SAE
Level 4 technology for the first time on selected public roads in
southwest Virginia. The trials on public roads were preceded
by months of extensive testing on closed tracks. Over the long
term Daimler Trucks plans to focus strategically on the opera-
tion of highly automated trucks (SAE Level 4) for long-distance
Hub2Hub haulage between logistics hubs.
Daimler Trucks: reliable and connected
Reliability is a core brand value at Daimler Trucks. As the world’s
largest manufacturer of trucks above 6 metric tons gross
vehicle weight, Daimler Trucks continuously works to reduce
unnecessary vehicle downtimes and thus continuously
increase vehicle availability for customers. This is important
because downtimes impair customers’ business success.
In today’s digital age, innovative connectivity solutions and
software services have become a part of the core business
of Daimler Trucks as never before. Along with the management
of its current portfolio of services, Fleetboard is also now
working systematically on the development of new digital solu-
tions for its customers. In the first quarter of 2019, for exam-
ple, Fleetboard acquired the habbl logistics application. The
software developed by habbl enables customers to easily inte-
grate Mercedes-Benz trucks into their scheduling processes
and make order data available in order to simplify communica-
tion with drivers.
As of 2019 anyone who gets behind the wheel of a new
Mercedes-Benz Actros or Arocs with “Multimedia Cockpit inter-
active” is just a click away from an innovative, fully networked
world of vehicles, drivers and logistics. An overview of all the
installed apps can be seen simply by pressing the “Connect”
button on the main screen of the navigation system. In addition,
transport companies can use the new Mercedes-Benz Truck
App Portal to take advantage of new networking opportunities
and equip their trucks with efficiency and comfort-enhancing
apps. The Mercedes-Benz Truck App Portal offers three types
of apps: in-house apps from Daimler, which include apps from
Mercedes-Benz Trucks and Fleetboard; selected apps from
third-party providers – for example for the digital management
of process steps or for processing transport requests; and
apps from customers themselves. These apps make it possible
to effectively integrate trucks into the digital business pro-
cesses of the transport company. The aim here is always to make
the everyday lives of dispatchers, fleet managers and drivers
as easy as possible.
B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY 99
Data-based and networked services also form the foundation
of the latest initiative from Daimler Trucks that is designed
to take service and the customer experience to a new level in
North America. Since June 2019, Daimler Trucks has been
utilizing its new customer experience (CX) organization to ensure
that customer requests and suggestions can be responded
to and implemented in an even faster and more customized
manner. An important role is played here by services that
enable customers to make their core business safer, more effi-
cient and more successful through the use of Daimler Trucks
products in a wide variety of situations. The idea is that the entire
service process – from vehicle reception and maintenance to
post-maintenance pick-up – should be made significantly more
efficient for customers. To this end, Daimler Trucks in North
America has introduced new app-based communication chan-
nels that enable customers to interact intuitively with service
reception and workshops while on the move. The overall objec-
tive here is to guarantee service-order processing within 24
hours in every case.
Mercedes-Benz Vans: vans with electric drive
Mercedes-Benz Vans is systematically forging ahead with the
electrification of its product portfolio with locally emission-
free electric drive systems that help ensure more sustainable
mobility for people and goods in cities. The first step in this
direction was made with the eVito panel van, which was fol-
lowed by the eVito Tourer (electricity consumption in combined
test cycle: 24.2 – 20.2 kWh/100 km; combined CO2 emissions:
0 g/km)1. Production of the eSprinter was launched in Düsseldorf
at the end of 2019. Also in 2019, Mercedes-Benz Vans pre-
sented our first purely battery-electric premium full-size MPV:
the EQV (combined electricity consumption: 27.0 kWh/100 km;
combined CO2 emissions: 0 g/km, preliminary figures).2 The
vehicle offers a range of up to 405 km 2 without compromising
the usability of its interior space.
Well connected: making transport safer and more efficient
Along with personal mobility, the transport of goods also plays
a key role in urban traffic. Mercedes-Benz Vans offers digital
solutions in this area with Mercedes PRO connect. The service
from Mercedes PRO includes providing the responsible fleet
customers with data that they can use to analyze the driving
style of their drivers and its effect on fuel consumption or vehi-
cle wear and tear, for example. Drivers can then receive train-
ing in line with the results of these analyses. Such training
courses can help reduce fuel consumption and the risk of acci-
dents. Mercedes PRO connect is currently available in 19 Euro-
pean countries and in the United States. The web-based ser-
vice benefits fleet operators ranging from small businesses to
major clients.
The eDrive@VANs strategy involves not only the electrification
of the vehicle fleet but also a customized overall system
solution for each individual fleet. This includes advice on vehi-
cle selection, assistance with tools such as the eVAN Ready
app, and an overview of the total cost of ownership. Equally
decisive for potential electric van users is the analysis of the
organizational and technical circumstances at commercial cus-
tomer sites. Finally, the integration of an intelligent charging
infrastructure lays the foundation for conserving resources with
a commercial fleet while remaining economically competitive.
digital@Vans bundles innovative solutions in the field of
digitalization. Under the web-based brand Mercedes PRO,
Mercedes-Benz Vans combines all digital services and
solutions for the daily requirements of its customers, from
small businesses to major clients. For example, Mercedes
PRO optimizes communication between fleet managers, vehi-
cles and drivers. In addition, it enables the online control of
jobs and the retrieval of vehicle information such as location,
fuel level or maintenance intervals almost in real time.
Mercedes-Benz Vans also develops tailored digital solutions
for various sectors, while its VAN2SHARE and In-Van Delivery
& Return services allow customers and the company itself to
employ entirely new business and service models.
Mercedes-Benz Vans is presenting Vision URBANETIC under
autonomous@Vans as a supplement to its electrification
solutions. This is an innovative mobility concept showing how
autonomous mobility might work in the future. Vision
URBANETIC removes the separation between passenger and
goods transport by utilizing an innovative body-switching
approach that enables the needs-based, sustainable and effi-
cient movement of people and goods. In this manner, Vision
URBANETIC meets the requirements of cities, companies from
diverse sectors, urban residents and travelers in an innovative
way. The concept reduces traffic flows, eases the strain on
inner-city infrastructure and helps to improve the quality of life
in cities.
Efficient passenger transport
Buses from the Mercedes-Benz and Setra brands are an indis-
pensable part of local public transport and play a key role world-
wide in reducing the impact of traffic, pollution and nitrogen
oxide pollution close to our roads. Our aim is to enable more
efficient mobility in cities and help reduce the negative impact
caused by traffic in urban areas in particular. At the same time,
we are focusing on keeping the total cost of ownership (TCO)
low and reducing emissions even further. As a result, Daimler
Buses offers a complete range of highly economical and innova-
tive vehicles, all tailored to customer requirements and specific
intended applications. We do this because our goal is to provide
customers with the right solution for every type of public trans-
port system – in small towns and large metropolitan areas, and
on smooth or rough terrain.
On the move with environmentally friendly public
transport
We continue to work hard on the electrification of our vehicles,
focusing particularly on vehicles that operate in cities. With
the all-electric Mercedes-Benz eCitaro, Daimler Buses has been
offering a locally emission-free city bus since 2018, thereby
contributing to environmentally friendly local public transport
in cities and metropolitan areas. The battery-electric eCitaro
is a series-production model. Products such as the eCitaro
make an important contribution to climate protection and air
quality in cities.
1 Energy consumption was determined on the basis of Directive 692/2008/EC. Energy
consumption is dependent on the vehicle configuration, and in particular on the selected
maximum speed restriction.
2 Figures for electrical consumption and range are provisional and were determined by the
technical service for the certification according to UN/ECE-regulation 101. EC type
approval and conformity certification with official figures are not yet available. There may
be differences between the stated figures and the official figures.
100 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY
We also continue to develop our environmentally friendly tech-
nologies and expand their use. Beginning in 2020, for example,
we will also be offering the eCitaro as an articulated bus, and
at the end of the same year it will also be available with solid-
state batteries (lithium polymer batteries). The launch of the
eCitaro with the next generation of batteries is scheduled for
2021. In 2022 we plan to begin equipping the battery-electric
bus with a range extender in the form of a fuel cell.
The eCitaro is part of Daimler Buses’ overall eMobility system.
In order to support our customers during their transition to
electric bus fleets, we offer advice on different use scenarios,
taking into account bus route lengths, passenger numbers,
energy requirements, range calculations, charging manage-
ment and other aspects. We also offer an Eco Training program
for bus customers and drivers that promotes an environmen-
tally friendly driving style.
Safety at Daimler Buses: the vision of accident-free driving
As a bus pioneer, Daimler Buses has traditionally focused on
the safety of city and intercity buses and touring coaches. We
want to significantly increase safety in road traffic by means
of state-of-the-art driver assistance systems and vehicle-based
protection systems, with the ultimate objective of enabling
accident-free driving. Our pursuit of this goal will also help the
European Union achieve its target of reducing traffic fatalities
to nearly zero by 2050. Our strategy here is also helping to
improve the quality of life in cities. The overall aim of the inte-
gral safety concept is an ambitious one: to make the vision of
accident-free driving a reality.
At Daimler Buses, safety does not consist of individual measures.
Instead, it is the result of a comprehensive integral safety con-
cept. Its central component comprises a large number of inno-
vative safety features that are employed in line with the vehicle
in question and the way it is to be used. The general objective
here is to continually improve active and passive safety. This is
supported by additional measures such as driver training pro-
grams that teach drivers how to identify and avoid hazards in
a timely way and react correctly in the event of an accident.
The concept also involves informing passengers on how to use
the onboard safety equipment – starting with putting on their
seat belts. It goes far beyond that, however, and also includes
responsible vehicle maintenance and the use of certified origi-
nal replacement parts when the vehicle is serviced. The objec-
tive of the integral safety concept is to make the vision of acci-
dent-free driving a reality.
The continuous further development of our safety and assistance
systems demonstrates our commitment to moving closer and
closer to this vision. For example, in 2019 the Active Brake Assist
4 emergency braking system became standard equipment in all
Mercedes-Benz and Setra touring coaches. The system warns
the driver of potential collisions with pedestrians and automati-
cally initiates emergency braking when it detects stationary or
moving obstacles ahead of the vehicle. Preventive Brake Assist –
the first active emergency braking assistance system for city
buses – has been available as an option for the entire Mercedes-
Benz Citaro model family and the Mercedes-Benz Conecto since
2019. Sideguard Assist, which is a radar-based turning assistant
with pedestrian detection for buses, supports bus drivers during
right turns, which can be dangerous in certain situations.
Sideguard Assist is available for all variants of the Mercedes-
Benz Citaro, the Tourismo and all Setra ComfortClass 500 and
Setra TopClass 500 touring coaches.
Environmental Protection
A comprehensive approach to environmental protection
The transition to CO2-neutral mobility is vital if the impact of
climate change is to be limited. We at Daimler are working hard
to make this vision reality. Mercedes-Benz AG has had its cli-
mate protection measures scientifically confirmed by the Sci-
ence Based Targets Initiative (SBTI). By means of these targets,
the company would like to make a contribution to environmen-
tal protection in line with the Paris agreement on global climate
change.
Furthermore, in our sustainable business strategy, we have set
ourselves the goal of making our fleet of new cars CO2-neutral
for the vehicles’ entire lifecycle by 2039. Daimler Trucks & Buses
aims to offer only new vehicles that are CO2-neutral in driving
operation (tank-to-wheel) in the major markets of Europe, Japan
and the NAFTA region by 2039. Mercedes-Benz Vans is currently
striving to achieve similar reductions in CO2 emissions.
The environmental and energy-related guidelines approved by
the Board of Management define the environmental and
energy-related policy of the Daimler Group. This expresses our
commitment to integrated environmental protection that
begins with the underlying factors that have an impact on the
environment, assesses the environmental effects of production
processes and products in advance, and takes these findings
into account in corporate decision-making.
A vehicle’s environmental impact is largely determined during
the first phases of its development. The earlier we integrate
environmentally responsible product development (design for
the environment, DfE) into the development process, the more
efficiently we can reduce the impact on the environment.
E pages 200 ff
CO2 emissions from our car fleet
In the year under review, the average CO2 emissions of our
car fleet in Europe (EU28 plus Iceland and Norway) probably
increased to 137 g/km (NEDC, including vans registered as
passenger cars (M1)) (Mercedes-Benz Cars 135 g/km). This
means that we were unable to reduce our CO2 emissions
from the prior-year level. There were several reasons for this
development. First, the shift of sales from vehicles with diesel
engines to those powered by gasoline engines. In addition,
the certification changeover became fully effective in 2019
with the roll-out of WLTP. We intend to achieve our objective
of reducing our CO2 emissions for 2020, thus continuing to
comply with the valid EU limit values by means of a planned
expansion of our portfolio to include further electric models
and assuming corresponding customer demand. More detailed
information can be found in the Non-Financial Report section
of this Annual Report. E pages 197 ff
Inner-city air quality
In addition to climate protection, the improvement of inner-city
air quality is an important environmental consideration for
us. That’s because road traffic still accounts for a considerable
share of nitrogen dioxide pollution (NO₂) near roads.
Plans call for our new vehicle fleet to no longer have any rele-
vant impact on NO₂ emissions in urban areas by 2025. Another
of our aims is to increase transparency with regard to vehicle-
related particulate emissions and forge ahead with the research
and development of measures for reducing such emissions.
B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY 101
Environmental protection in production
Beginning in 2022, we plan to achieve CO2-neutral production
in all of our Mercedes-Benz car plants in Europe. New plants
are already being planned with this in mind. Factory 56 is
showing the way. This new factory building in the Mercedes-
Benz Sindelfingen plant will already be supplied with CO2-neu-
tral energy when it goes into operation. The plant in Hambach,
France, already covers all of its electricity requirements with
energy from renewable sources (green electricity, biogas). Its
production operations are CO2-neutral. Production at the
Mercedes-Benz plant in Jawor, Poland, will also be CO2-neutral
as of the plant’s commissioning. The new plant will be com-
pletely supplied with electricity from renewable resources by a
wind farm. Heating will be provided by a heating plant directly
adjacent to the plant site. This will provide energy from renew-
able resources.
In Germany, Mercedes-Benz AG will also in the future obtain
electricity from German wind power facilities whose subsidies
in accordance with Germany’s Renewable Energy Act (EEG)
are due to expire after 2020. This will support the long-term
operation of six wind farms in northern Germany. Energy effi-
ciency is already being implemented in production operations
today. Various technical measures such as the optimization
of lighting and ventilation technology (including more efficient
systems and optimized switching times), intelligent control
(including automatic switch-off of consumers during breaks and
production-free periods) and the use of efficient technology in
planning (such as high-efficiency turbo compressors for central
compressed-air generation, energy-efficient pumps) contribute
to further energy saving. The measures are supported by efficient
control of the electric power supply.
An energy management system has been implemented for the
continual reduction of energy consumption. The workforce in
the plants is being sensitized to this initiative through a variety
of measures. These include generally visible tips for energy
saving and training courses in the production facilities. The
employees make a substantial contribution to energy saving
through their energy awareness and their innovative ideas.
More detailed information can be found in the “Non-Financial
Report” section of this Annual Report. E pages 197 ff
A reduction in NOX emissions is made possible by an innovative
overall package consisting of the engine and the exhaust treat-
ment system. This package is being continuously enhanced and
has been comprehensively launched on the market in the new
engine generation encompassing the OM 654, 656 and 608.
Overall, Daimler is developing software updates for a majority
of Euro 6b and Euro 5 diesel passenger cars in Europe. These
updates should improve the nitrogen-oxide emissions of the
vehicles in normal operation by 25 to 30 percent on average.
This will be verified with the WLTC 1, 2, 3 measurement cycle.
As early as 2017 Daimler had announced that it would offer vol-
untary service measures that would include software updates
for several millions of diesel vehicles in Europe. The company
has since then extended this update campaign, among other
things to include van models. As is well known, Daimler has in
addition been carrying out obligatory recalls – during which
software updates are also applied – at the order of Germany’s
Federal Motor Transport Authority (KBA) since 2018.
An important role is also being played by the launch of vehicles
that comply with the Euro 6d-TEMP emissions standard. In
the meantime all Mercedes-Benz passenger cars that can be
ordered as new vehicles now comply with this standard at a
minimum.
Conserving resources: consistently high recyclability
Raw materials that we require for use in our vehicles are avail-
able in sufficient quantities today. However, we will only be
able to safeguard the supply of these materials in the long term
if they are extracted and recycled in ways that are environ-
mentally friendly and socially responsible and in acceptable
amounts. We therefore seek to establish a completely closed-
loop value and supply chain. This objective is also the driving
force behind our implementation of various measures to lower
resource consumption in all areas – from development all the
way through to recycling. In this manner, we plan to increasingly
decouple resource consumption per vehicle from the compa-
ny’s sales growth.
In order to evaluate the environmental compatibility of a vehi-
cle, we analyze the use of resources throughout its entire life
cycle. The production of vehicles naturally requires great quan-
tities of materials. Therefore, one of the focal points of our
development tasks is to keep the demand for natural resources
as low as possible. During vehicle development, we also pre-
pare a recycling concept for every one of our Mercedes-Benz
car models. This concept includes an analysis of the suitability
of all components and materials for the various stages of the
recycling process. As a result, all Mercedes-Benz car models
are 85% recyclable and 95% recoverable. The key aspects of
our activities in this area are:
– the resale of tested and certified used parts through the
Mercedes-Benz Used Parts Center (GTC),
– the remanufacturing of used parts, and
– the workshop waste disposal system MeRSy
(Mercedes-Benz Recycling System).
102 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY
maintain a work culture that promotes outstanding perfor-
mance and a high level of motivation and satisfaction among
our employees and management staff.
Our employees’ individual circumstances require working times
to be flexibly organized. We therefore offer a varied range of
working-time arrangements that include mobile working, part-
time work and job sharing, all of which improve performance
by helping employees reconcile their professional and personal
responsibilities.
Diversity and inclusion
Diversity is one of the five corporate principles at Daimler and
a firmly established part of our culture. We require and encour-
age a working environment featuring equal opportunities and
a culture of appreciation and respect. With “Diversity Shapes
our Future,” we are underscoring the importance of diversity
as a strategic factor for success at Daimler. Diversity manage-
ment enables us to reflect the diversity of our customers, sup-
pliers and investors around the world.
Daimler’s approximately 300,000 employees provide the Group
with a vibrant mixture of cultures and ways of life. We shape
diversity and inclusion with targeted programs and measures
for our employees. With staff from more than 160 countries
and a workforce that spans five generations, our company is
an organization made up of international teams – with mem-
bers of all ages. We provide our employees with the opportu-
nity to express their sexual orientation and identity. We offer
equal opportunities to people with disabilities and also support
their further training and qualification. We expressly promote
equality of opportunity between the genders.
We have committed ourselves to raising the proportion of
women in senior management positions at the Group to at least
20% by the end of 2020. The proportion of women in such
positions has continually risen in recent years to reach 19.8% at
the end of 2019 (2018: 18.8%). Our instruments for supporting
the targeted promotion of women include mentoring, special
events and training courses, and employee networks.
In order to fulfill the requirements of legislation in Germany
regarding the equal participation of women and men in man-
agement positions, the Board of Management has set targets
for the proportion of women at the two management levels
below the Board of Management and a deadline for achieving
those targets. In setting all targets, we have taken industry-
specific circumstances into consideration.
Further details are provided in the “Declaration on Corporate
Governance, Corporate Governance Report” section on
E pages 185 ff of this Annual Report.
The workforce
Number of employees at prior-year level
On December 31, 2019, the Daimler Group employed a total
of 298,655 men and women (2018: 298,683). Contrary to the
forecast in Annual Report 2018, the number of employees
remained at the prior-year level. B.41
The number of employees in Germany decreased from 174,663
in 2018 to 173,813 in the year under review. Whereas employee
numbers in 2019 declined in the United States to 25,788 (2018:
26,310), they increased in Brazil to 11,128 (2018: 10,307) and
in Japan to 10,056 (2018: 9,918). B.42 Our consolidated sub-
sidiaries in China had a total of 4,439 employees at the end
of the year (2018: 4,424). At the end of the reporting year, the
parent company Daimler AG employed a total of 6,887 men and
women (2018: 149,797). The decline in workforce numbers at
Daimler AG was due to the implementation of “Project Future,”
which was approved by the 2019 Annual Shareholders’ Meet-
ing. Within the framework of this project, the Mercedes-Benz
Cars, Mercedes-Benz Vans, Daimler Trucks and Daimler Buses
divisions were separated from Daimler AG and established as
legally independent units known as Mercedes-Benz AG and
Daimler Truck AG. Following this separation, Daimler AG was
restructured into an operational management holding company
that provides services to the Group companies.
Around the world, we have combined in-house services, such
as those for financial processes, human resources (HR), IT and
development tasks, sales functions and certain location-spe-
cific services, into shared service centers. Some of the shared
service centers are not consolidated because they have a neg-
ligible affect on our financial position, cash flow or profitability;
those companies employed approximately 13,400 men and
women at the end of 2019.
The Group’s total workforce also does not include the employees
of companies that we manage together with Chinese partners;
on December 31, 2019, they numbered approximately 22,600
people (2018: 19,900).
Human resources strategy
The key aims of our human resources strategy are to further
increase our appeal as an employer and to safeguard and further
extend the competitiveness of our workforce. Because our
executives should motivate their employees to achieve top per-
formance and assume more personal responsibility, it is crucial
that we further develop our management culture and establish
outstanding leadership capabilities in our management. In
addition, we want to take on social responsibility and let diver-
sity flourish in our global company.
High attractiveness as an employer
Our activities and measures for enhancing our attractiveness as
an employer are designed to enable us to recruit and retain
specialized employees and qualified managers. In this regard,
we also make use of external communication channels such as
our Careers website w daimler.com/career and social media
sites (e.g. Instagram and Facebook). We also develop target
group-specific marketing campaigns. The most recent example
of such a campaign is the “Next Big Thing,” an international
campaign designed to make IT and artificial intelligence experts
more aware of what Daimler has to offer as an attractive
employer. Our primary objectives for such measures are to
ensure attractive and fair compensation and to establish and
B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY 103
Securing young talent
Daimler takes a holistic approach to securing young talent.
This begins with programs for children and teenagers (in our
Genius initiative, for example) and extends to a broad range
of activities such as social media campaigns, hackathons,
competitions and internships that offer young talents the pos-
sibility to get in touch with the company. After university
students graduate, we offer them attractive possibilities to join
our company directly or launch their careers at Daimler by
taking part in our global training programs.
Employee qualification
We provide our staff with training and continuing education
opportunities throughout their entire careers in order to safe-
guard the long-term innovative capability and outstanding
performance of our workforce. The rapid pace of technological
change is making lifelong learning more important, especially
as we must now assume that employees will need to make more
major changes than ever before to their skills profiles through-
out their careers. Our range of qualification measures for safe-
guarding our workforce’s employability includes practical
training courses, e-learning courses, seminars, workshops,
specialist conferences and financial support for employees
who participate in a course of study while continuing to work.
In 2019, for example, we offered training courses on new
developments in the fields of electric mobility and robotics.
During the year under review, around 45,000 employees
throughout Germany participated in training programs relating
to electric mobility.
Health management and occupational safety
Healthy and motivated employees are important for our com-
petitiveness. We therefore promote the health and safety of
our employees through numerous programs that focus on work
safety concepts and standards, ergonomics, the provision of
medical care, nutritional advice, individual exercise, measures
to promote mental health and personal resilience, and much
more. Our Health & Safety unit defines, coordinates and moni-
tors measures that promote and ensure occupational health
and safety at the company. The implementation of such mea-
sures at our plants is managed by corresponding experts.
Further information on employee matters can be found in the
Non-Financial Report on E pages 203 ff.
Social responsibility
The goals associated with our social commitment
As one of the world’s leading vehicle manufacturers, Daimler
and its numerous brands are well known around the globe.
Our company stands for business success, advanced solutions
and social responsibility. This combination is important for
us because we can only remain successful in the future if the
climate that we operate in is also prospering. A high level of
education among the population, as well as a high degree of
economic and social stability, are crucial for ensuring a society
worth living in – and ultimately the success of our work as well.
This is why we work to achieve sustainable social development
in our markets and in the communities in which we
operate. We also encourage our employees to support our
efforts here. This is important because social commitment
expands one’s horizons and also strengthens our own corpo-
rate culture.
B.41
Employees by division
Employees (December 31)
% change
2019
2018
19/18
Daimler Group
Mercedes-Benz Cars1
Daimler Trucks1
Mercedes-Benz Vans1
Daimler Buses1
Daimler Mobility
Group
Functions & Services1
298,655
152,048
83,437
21,346
17,960
12,680
298,683
151,316
82,676
21,810
17,729
14,070
11,184
11,082
-0
+0
+1
-2
+1
-10
+1
1 Adjustment of the workforce numbers in 2018 due to changes to
the assignment of employees within the Group.
B.42
Employees at 12/31/2019
By region
Germany
Europe, excluding Germany
USA
Brazil
Japan
China*
Other
58.2%
14.4%
8.6%
3.7%
3.4%
1.5%
10.2%
* excluding non-consolidated associated companies and joint ventures
B.43
Donations and sponsoring in 2019
Charity & Community
Arts & Culture
Education
Science & Technology &
Environment
Political dialogue
77%
4%
13%
5%
1%
All of our activities in this area, as well as initiatives such as
“Mobile Kids” and “Genius,” form a part of our sustainable
business strategy within the framework of the three pillars
“With our employees,” “For our locations” and “Worldwide.”
B.43 In 2019, we spent around €60 million on donations to
non-profit institutions and the sponsorship of socially benefi-
cial projects. This does not include our foundations or self-
initiated projects.
With our employees
One of our employees’ social commitment initiatives is the
ProCent program, in which Daimler employees voluntarily
donate the cent amounts of their net salaries and Daimler
matches every cent donated. The total amount then goes into
a support fund for socially beneficial projects, which can be
nominated by the employees. As a result, a total of €8.45 million
has been released since the launch of the initiative in December
2011. Donation recipients included the “Verein der Palliativ-
Care-Teams im Kreis Böblingen e. V.” palliative care association,
which received laptops equipped with special software.
104 B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY
The Daimler Fund in the Donors’ Association focuses on struc-
tural problems related to research and teaching, as well as on
the engineering sciences and international and scientific coop-
eration. Since 1993, it has helped establish 27 endowed pro-
fessorships/assistant professorships in Germany and abroad.
More information on the projects promoted by the Group and
the activities related to our social commitment can be found in
the Daimler Sustainability Report and on our website under
“Sustainability.” w daimler.com/sustainability
Further information on social matters can be found in the
Non-Financial Report of this Annual Report. E pages 208 ff
Social Days, the “Day of Caring” and other hands-on campaigns
such as “Give a Smile” give our employees the opportunity
to participate in socially beneficial projects. During the year
under review, around 2,600 employees participated in the
Social Days alone. All of these activities are for a good cause,
and they also aim to strengthen the motivation and cooperation
of our employees within the company.
For our locations
We conduct a wide variety of projects that not only support
social development at our locations but also address specific
challenges that our neighboring communities face. Since 2016,
for example, we have been working with the Stuttgart Civic
Foundation and other companies in the Stuttgart Campus edu-
cation and training project to support the integration of immi-
grants and refugees. In November 2019, Stuttgart Campus was
presented with an integration award after it had been selected
as one of the ten best integration projects in Germany.
Worldwide
We initiate aid projects worldwide to help people determine the
course of their lives independently, on their own responsibility,
and without material deprivation, and in this manner create a
better future for the generations to come. The “Bon Pasteur”
project, for example, conducts targeted education programs in
order to improve the future prospects of more than 19,000
people from eight villages in cobalt-mining and other mining
regions in the Democratic Republic of the Congo. The project
has also established safe spaces especially for children, girls
and women in order to protect them against the worst forms
of child labor and gender-based violence.
Funding through foundations
Our foundations support projects around the world related to
science, research, technology, education and sports. The
Laureus Sport for Good Foundation uses sports to bring people
together. It primarily enables socially disadvantaged children
and teenagers to discover their potential through sports, and
thus creates opportunities for a better future. There are now
around 200 Laureus projects under way in more than 40 coun-
tries. One example is the “Moving the Goalposts” project in
Kenya, in which girls in one of the country’s poorest regions are
taught how to become confident young women. The project
offers training and education courses that teach the girls how
to speak effectively in public and better organize their daily
lives.
The Daimler and Benz Foundation supports interdisciplinary
scientific dialog and research projects. The purpose of the
foundation is to examine and clarify the interrelationships
between human beings, the environment and technology. The
foundation offers scholarships to outstanding young scien-
tists, and it also designs and implements innovative research
formats and organizes lecture series.
B | COMBINED MANAGEMENT REPORT | SUSTAINABILITY AND INTEGRITY 105
Our Compliance Management System (CMS) serves as
the foundation
Our Compliance Management System (CMS), which has its basis
in our culture of integrity, is designed to support the obser-
vation of laws and policies in the company and by its employees
and to prevent misconduct. The measures needed for this are
defined by our compliance and legal affairs organizations in a
process that also takes business requirements into account
as appropriate. Our CMS consists of basic principles and mea-
sures for the promotion of compliant behavior throughout the
Group. The CMS is based on national and international standards
and is applied on a global scale at Daimler AG and all Group
companies. The systematic minimization of compliance risks is
extremely important here, and for this reason we analyze and
assess the compliance risks of our Group companies every year.
These analyses are based on centrally compiled information
on the Group companies; specific additional details are taken
into account if necessary. The results of the analyses form the
basis of our risk management.
More detailed information on the Daimler Compliance Manage-
ment System can be found in the Non-Financial Report section
of this Annual Report. E pages 212 ff
In order to ensure an independent external assessment of our
Antitrust and Anti-Corruption Compliance Program, KPMG AG
Wirtschaftsprüfungsgesellschaft audited the Compliance Man-
agement System for antitrust law and anti-corruption in accor-
dance with Audit Standard 980 of the Institute of Public Audi-
tors in Germany. This audit, which was based on the principles
of appropriateness, implementation and effectiveness, was
already successfully completed at the end of 2016 (antitrust) and
at the end of 2019 (anti-corruption).
Integrity, compliance and legal affairs
Shared values and rules provide orientation in times of techno-
logical transformation and social change. These values and
rules help us make the right decisions and fulfill our responsi-
bility not just for our business success but also for the environ-
ment and the societies we live in.
As one of our main corporate values, integrity is as much a part
of everyday business conduct at Daimler as compliance and
legal responsibility. The foundation is our Integrity Code, which
was modernized and updated in 2019, and which focuses,
among other topics, on technical compliance. It is binding on
all companies and employees of Daimler AG and all Group
companies worldwide. The Code contains central corporate
principles of behavior that we expect all of our employees
and business partners to adhere to out of a sense of convic-
tion. We expect our executives to serve as role models in
terms of ethical behavior and thus offer employees guidance
in this regard.
The task of Integrity Management is to promote the culture of
integrity at the Daimler Group and support its further develop-
ment and to provide the management and the employees with
the necessary tools and knowledge. The unit’s goal is to estab-
lish and maintain a common understanding of integrity in order
to reduce risks and help ensure Daimler’s sustained success.
To this end, a large number of communication activities and
measures are carried out. These include dialog events, training
programs and employee surveys that provide employees with
important stimuli and advice related to their daily work and
business decision-making. Our “Infopoint Integrity” is available
to all of our employees as a central point of contact and a
center of advice on integrity-related issues in the daily working
environment. In addition, a network of integrity contact per-
sons supports the divisions in ensuring that all integrity-related
measures are firmly embedded within their organizations. One
of the things we focused on in 2019 was dialog sessions that
addressed the topic of technical integrity in the development
departments of our various business divisions.
Further information can be found in the Non-Financial Report.
E pages 211 ff
Compliance and legal responsibility
Value-based compliance is an indispensable part of our daily
business activities at Daimler. For us, compliance means acting
in accordance with laws and regulations. Our objective here
is to ensure that all of our employees worldwide are always able
to carry out their work in a manner that is in compliance with
applicable laws, regulations, agreements with workers’ represen-
tative bodies, voluntary commitments and our values, as set
out in binding form in our Integrity Code. Our compliance activi-
ties focus on complying with anti-corruption regulations, the
maintenance and promotion of fair competition, the compliance
of our products with technical and regulatory stipulations,
respect for and the protection of human rights, adherence to
data protection laws, compliance with sanctions and the pre-
vention of money laundering. Our compliance and legal organi-
zations are designed to ensure that they can advise and sup-
port all of our corporate units worldwide with regard to their
business operations, processes and services in order to mini-
mize legal and business risks.
106 B | COMBINED MANAGEMENT REPORT | OVERALL ASSESSMENT OF THE ECONOMIC SITUATION
Overall Assessment of the Economic Situation
In the opinion of the Board of Management, at the time of pub-
lication of this Annual Report, the Daimler Group is in a phase
of transition, which brings great opportunities but also consid-
erable risks:
– We have presented a new sustainable business strategy,
which is designed to lead us into a CO2-neutral future.
– After receiving the approval of the Annual Shareholders’
Meeting, we launched a new corporate structure effective
November 1, 2019, which makes us more flexible and focuses
our businesses more closely on our customers.
– We are on the threshold of a far-reaching transformation pro-
cess that will change the Daimler Group and the automotive
industry as a whole to an unprecedented extent in the coming
years.
– An additional factor is an environment featuring trade con-
flicts, extremely demanding targets for CO2 reductions, and
economic and political uncertainties.
Against this backdrop, our divisions generally performed well
in the market in 2019. In Interbrand’s current Best Global
Brands 2019 ranking, the Mercedes-Benz brand is the world’s
most successful and most valuable premium automotive
brand. In 2019, the brand set a new record for unit sales for
the ninth consecutive year, although growth was somewhat
weaker than expected. We also increased our unit sales of vans
and buses, and maintained or actually strengthened our
position in key markets. Although our unit sales of trucks were
lower than in the previous year, we continue to be the world’s
largest manufacturer of trucks over 6 tons. At Daimler Mobility,
new business and contract volume continued to develop posi-
tively in the year under review.
With a large number of new and innovative products and ser-
vices, we have established a good starting position to meet the
upcoming challenges. We are also very well positioned in the
key technologies that are important for the future of mobility.
Daimler is pushing ahead with the electrification of the auto-
mobile. The entire Mercedes-Benz car portfolio is to be electri-
fied by 2022. This means that various electrified alternatives
will be offered in each segment – from compact cars to large
SUVs. By 2025, we expect all-electric vehicles to account for
up to 25%. To this end, we plan to launch more than ten all-
electric automobiles. Mercedes-Benz Vans already offers the
eVito, the eSprinter and our battery-powered multipurpose
vehicle is to follow in 2020. And Mercedes-Benz Vans has also
announced an electric version of the successor model to the
Citan. By 2022, Daimler Trucks will make electric vehicles ready
for series production in all major regions and segments, with
a focus on battery-powered trucks. The range will be supple-
mented in the second half of this decade by fuel-cell and
hydrogen-based systems for trucks. Daimler Buses already
presented the all-electric eCitaro in mid-2018. Buses equipped
with fuel-cell systems are to supplement the product range.
In the field of automated driving, we launched a long-term devel-
opment cooperation with BMW in the year under review. We
intend to jointly develop the next generation of technology for
driver assistance systems and automated driving on highways,
as well as automated parking functions. As of 2024, such sys-
tems are to be available for private customers in passenger
cars. Daimler Trucks will initially focus on Hub2Hub operations
in SAE Level 4 automated driving mode on American highways.
The potential elimination of the driver and the associated cost
savings could result in a viable business model. All expertise
and activities for trucks with automated driving functions have
been brought together at the Daimler Trucks Autonomous Tech-
nology Group. Torc Robotics, in which we acquired a majority
interest in 2019, is part of the Autonomous Technology Group.
In order to further improve our competitiveness and combine
our strengths, we have entered into pioneering partnerships
for mobility services, for the further development of the smart
brand’s model portfolio, and for the establishment of a wide-
ranging charging infrastructure for electric vehicles.
Numerous positive aspects of the Group’s current situation are
of benefit to us with regard to the current transformation
process. On the other hand, we have a generally unsatisfactory
development of key financial performance indicators.
The operating profit (EBIT) of the Daimler Group of €4.3 billion
was significantly lower than in the previous year (€11.1 billion).
There were particularly significant decreases at the Mercedes-
Benz Cars and Mercedes-Benz Vans divisions. In the automo-
tive business as a whole, our return on sales of 1.5% was signifi-
cantly below our target, and the free cash flow of the industrial
business of €1.4 billion was also significantly lower than in the
B | COMBINED MANAGEMENT REPORT | EVENTS AFTER THE REPORTING PERIOD 107
previous year. Various special factors contributed to this devel-
opment, such as expenses relating to regulatory proceedings
for diesel vehicles. But even if we exclude these special items
and also take into account the ongoing high level of expendi-
ture for new products and technologies, we cannot be satisfied
with our earnings in 2019.
Events after the
Reporting Period
Personnel measures in production-related and
administrative areas in the years 2020 to 2022
In January 2020, Daimler agreed with the General Works Council
on a general company agreement that, among other things,
regulates voluntary agreements on termination of employment
primarily for employees in indirect areas (i.e. in administration
and production-related areas). Discussions with employees on
voluntary agreements on termination of employment will begin
in the second quarter of 2020.
Establishment of joint venture smart Automobile Co., Ltd.
Mercedes-Benz AG and Zhejiang Geely Holding Group estab-
lished the joint venture smart Automobile Co., Ltd. in December
2019. The two companies are expected to contribute equal
shares of RMB 2.7 billion each to the equity of the joint venture
in the first half of 2020. The equity interest of Mercedes-Benz AG
will mainly consist of the contribution of the smart brand, which
will have a positive impact on earnings before taxes of approxi-
mately €0.1 billion to €0.2 billion at the future Mercedes-Benz
Cars & Vans segment.
Sale of 30% of the shares in HERE
In December 2019, There Holding B.V. (THBV) and HERE Inter-
national B.V. (HERE) and other companies signed an agreement
on the basis of which 30% of the shares in HERE are to be
sold to a joint venture between Mitsubishi Corporation and
Nippon Telegraph and Telephone Corporation. The transaction
is expected to be completed in the first half of 2020 after
receiving the approval of the relevant authorities. The comple-
tion is expected to lead to a gain of €0.1 billion.
This is true also because we plan to invest approximately €14
billion in property, plant and equipment and nearly €19 billion
in research and development projects in 2020 and 2021. We
are thus maintaining the high level of expenditure necessary to
secure our future – despite the fact that we are applying funds
much more efficiently, focusing even more on the most impor-
tant projects and sharing costs in collaborative projects.
High expenses for the transition to a CO2-neutral future will
continue to reduce our earnings in the coming years. It is
therefore important that we now take the measures that will
enable us to generate adequate returns and cash flows again
in the medium term, even under less favorable conditions.
For that reason, we are initiating comprehensive measures to
increase profitability at all our divisions and at Daimler AG.
They include personnel measures, material-cost savings, prio-
ritization of investments, portfolio and model adjustments,
the implementation of platform strategies and the thorough
digitization of processes at Daimler Mobility.
In November 2019, we presented our sustainable business
strategy with its focuses of MOVE, PERFORM and TRANS-
FORM, whose implementation will open up the way to a suc-
cessful future. E pages 52 ff
We aim to offer sustainable solutions for the personal mobility
and the goods transport of the future. We want to inspire
emotionally and convince rationally. With our Mercedes-Benz
automobiles, we take this path with sustainable, modern luxury.
And with innovative and highly efficient commercial vehicles,
we intend to make our customers successful in the transport
and haulage business. Achieving our return targets and a solid
cash flow are currently our top priorities. Because an appropri-
ate rate of return is also the precondition for meeting the justi-
fied demands of our investors, our employees, our suppliers,
and society as a whole.
In order to achieve our goals, we are systematically implement-
ing our sustainable business strategy. Our starting position
on the road to a profitable and at the same time CO2-neutral
future is significantly better than current earnings figures
suggest. There is still a lot to do, but we laid down the decisive
markers in 2019. In doing so, we took into account that the
transformation of the automotive industry not only involves
risks, but also offers considerable opportunities, which we
intend to utilize systematically. For example, the VISION EQS
concept car, which we presented in September 2019, sets
the direction: With such vehicles, we can completely redefine
the automotive luxury segment. But CO2-neutral and auto-
mated driving opens up new market potential also for commer-
cial vehicles, as the success of our eCitaro electric city bus
shows.
All of this gives us great confidence for the coming years and
the challenges that lie ahead.
108 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
Remuneration Report
Principles of Board of Management
remuneration
Goals
The remuneration system for the Board of Management mem-
bers aims to promote the Company’s business strategy and its
sustainable long-term development. When determining the
total remuneration of the individual Board of Management mem-
bers, Daimler takes the condition of the Company into account
as well as the members’ areas of activity and responsibility. This
is done in line with legal requirements and with a clear focus on
the competition. A balanced combination of non-performance-
related (fixed) and performance-related (variable) components
of remuneration that also takes into account suitably ambitious
performance parameters and performance indicators provides
the Board of Management with an incentive to implement the
corporate strategy and ensure the Group’s sustained success.
In this way, Daimler reconciles the interests of all stakeholders,
in particular those of the shareholders as the owners of the
Company and those of the employees.
Practical implementation
For each upcoming financial year, the Presidential Committee
at first prepares a review by the Supervisory Board of the system
and level of remuneration on the basis of a comparison with
competitors. The main focus is on checking for appropriateness,
based on a horizontal and a vertical comparison.
In the horizontal comparison, the following aspects are given
particular attention in relation to a group of comparable compa-
nies in Germany:
– the effects of the individual fixed and variable components,
that is, the methods behind them and their performance
parameters;
– the relative weighting of the components, that is, the relation-
ship between the fixed base salary and the short, medium
and long-term variable components;
– and the amount of the target remuneration consisting of a
fixed base remuneration, an annual bonus as a short and
medium-term variable component, and a long-term variable
remuneration, also with consideration of entitlement to a
retirement pension and fringe benefits.
The vertical comparison focuses on the ratio of Board of Man-
agement remuneration to the remuneration of the senior
executives and the entire workforce of Daimler AG in Germany,
also in terms of development over time. The Supervisory Board
has defined the group of senior executives for this purpose. It
consists of the Executive Vice Presidents and the management
level 1 of Daimler AG in Germany.
In the event of significant changes in the relationship between
the remuneration of the Board of Management and the hori-
zontal and vertical comparison groups the Supervisory Board
establishes the causes and in the absence of objective rea-
sons for the deviations adjusts the remuneration of the Board
of Management as necessary.
In carrying out this review of the appropriateness of the remu-
neration system and the remuneration, the Presidential Com-
mittee and the Supervisory Board consult independent external
advisors. This was also done in late 2019. The result confirmed
that the remuneration system for 2019 complied with the require-
ments of applicable law.
If the review results in a need for changes to the remuneration
system for the Board of Management, the Presidential Com-
mittee submits the relevant proposals to the entire Supervisory
Board for its approval.
On the basis of the approved remuneration system, the Super-
visory Board decides at the beginning of the year on the base
and target remuneration for the individual members of the Board
of Management as well as on total remuneration limits. It also
decides on the relevant performance parameters and the respec-
tive targets that are to be used in the bonus calculations (the
short and medium-term variable remuneration components) for
the upcoming financial year. Furthermore, sustainability-based
non-financial targets are drawn up for the Board of Management
as a whole, as are transformation targets oriented toward the
implementation of future-focused measures for the Group’s
technological and sustainable realignment. Since the 2019
financial year, the annual bonus for the Board of Management
and for managers has been calculated according to uniform
goals/criteria and a uniform system.
For the long-term variable component of remuneration, which
is referred to as the Performance Phantom Share Plan (PPSP),
the Supervisory Board sets an amount to be granted for the
upcoming financial year in the form of an absolute amount
in euros and sets the respective performance targets. The uni-
form approach for the targets/criteria and the PPSP system
has been in force for the Board of Management and for manag-
ers since it was introduced in 2005.
After the end of each financial year, the amount of the annual
bonus is determined by measuring the achievement of the
financial, non-financial and transformation targets by the Board
of Management as a whole. The Presidential Committee then
calculates the annual bonus and submits its proposal to the
Supervisory Board for its approval.
The amount to be paid out for the long-term variable remunera-
tion component (PPSP) is determined at the end of the four-
year plan period and approved for payment after the Presidential
Committee and the Supervisory Board have been informed.
The remuneration system was approved by the Annual Share-
holders’ Meeting in 2019 with an approval ratio of 97.87%.
The system of Board of Management remuneration in 2019
The fixed base salary and the annual bonus each comprise
approximately 30% of the target remuneration, while the vari-
able component of remuneration with a long-term incentive
effect (PPSP) makes up approximately 40% of the target remu-
neration. B.44
As before, only 50% of the annual bonus is paid out in the
March of the following financial year. The other 50% is paid out
a year later (deferral) with the application of a bonus-malus
rule, depending on the development of the Daimler share price
compared with an automotive index (STOXX Europe Auto
Index) E page 48 ff, which Daimler AG uses as a benchmark
for the relative share-price development. Both the delayed
payout of the portion of the annual bonus (with the use of the
bonus-malus rule) and the variable component of remunera-
tion from the PPSP with its link to additional, ambitious compar-
ative parameters and to the share price reflect the recommen-
dations of the German Corporate Governance Code as amended
on February 7, 2017 and give due consideration to both posi-
tive and negative business developments.
The maximum amounts of remuneration of Board of Manage-
ment members are limited, both overall and with regard to the
variable components.
As in the prior year, the maximum amounts of remuneration
(cash payments) of the members of the Board of Management
were set for financial year 2019 at 1.9 times the target remu-
neration for its members. It was 1.5 times the target remunera-
tion for its Chairman, who was in office until the end of the
Annual Meeting 2019, and is 1.7 times the target remuneration
for the new Board of Management Chairman. The target remu-
neration consists of the base salary, the target annual bonus and
the grant value of the PPSP, excluding fringe benefits and
retirement benefit commitments. With the inclusion of fringe
benefits and retirement benefit commitments from the
respective financial year, the maximum limit of total remunera-
tion increases by these amounts. The possible cap on the
amount exceeding the maximum limit takes place with the pay-
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 109
B.44
Remuneration structure
Target remuneration consists of non-performance-related
and performance-related components:
base salary
(non-performance-related) approx. 30%
short- and medium-term
performance-related
components
approx. 30%
long-term performance-related
components
approx. 40%
B.45
Maximum limit of total remuneration1 2019
(cash payments)
Chairman of the Board of Manage-
ment
Other members of the Board of
Management
1.7 times the target
remuneration1
1.9 times the target
remuneration1
Base salary in 2019
+ target bonus = 100% of the 2019 base salary
+ PPSP value when granted for 2019
Target remuneration1 2019
Base salary in 2019
+ annual bonus for 2019
(50% paid out in 2020 + 50% in 2021)
+ PPSP payment for 2019 (in 2023)
incl. dividend equivalent payments
Total remuneration1 in 2019
The possible cap on the amount exceeding the maximum limit
takes place with the payment of the PPSP for 2019 in 2023.
1 Excluding fringe benefits and retirement benefit commitments in
all cases.
B.46
Base salary – fixed E page 109
base salary – fixed – oriented towards the area of responsibility
base salary
(non-performance-related) approx. 30%
paid out in twelve monthly
installments
ment of the PPSP issued in the relevant financial year, i.e. for
the year 2019, with payment of the PPSP 2019 in 2023. B.45
The individual components of the remuneration system are as
follows:
The base salary is fixed remuneration relating to the entire
year, oriented toward the area of responsibility of each Board
of Management member and paid out in twelve monthly
installments. B.46
110 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
B.47
Annual bonus – short- and medium-term
performance-related remuneration E page 110
short- and medium-term
performance-related
components
approx. 30%
annual bonus 2019 = target bonus × overall target achievement
target bonus
= 100% of
base salary
2019
target achievement EBIT
+/- target achievement for the
non-financial targets
+/- target achievement for the
transformation targets
overall target achievement
time of payment of annual bonus 2019
50% of annual bonus = in March of the year after the reporting year (2020)
50% of annual bonus (deferral) = in March of the second year after the
reporting year (2021)
amount paid out deferral = 50% of annual bonus × “relative share performance”1
1 Depending on the development of the Daimler share price compared with the
STOXX Europe Auto Index.
The annual bonus is a short and medium-term variable remu-
neration, the level of which during the reporting period is pri-
marily linked to the operating profit of the Daimler Group (EBIT)
in the form of a comparison of actual and target values. For
the past financial year, the Supervisory Board has derived the
target value for the annual bonus from the growth targets
and the especially ambitious level of the medium-term return
that is based on the competition’s performance. B.47
The annual bonus is also impacted by the transformation targets
set by the Supervisory Board as well as by the sustainability-
oriented non-financial targets for the Board of Management as
a whole. These factors can raise or lower the annual bonus by
up to +/-25% and +/-10%, respectively.
Primary reference parameter:
– comparison of actual EBIT in 2019 with EBIT targeted for
2019.
Amount with 100% target achievement (target annual
bonus):
In 2019, this is equivalent to the respective base salary.
B.48
Overview of the determination of the annual bonus from January 1, 2019
Financial targets
Strategic targets for the
operational result
— EBIT targeted/actual
comparison
Non-financial targets
— Employee targets
— Customer targets
— Diversity targets
— Integrity targets
— 50% payout after one year
— 50% deferral coupled with
share price perfor-
mance compared to
competitors
Transformation targets
— CASE ecosystem
— Digitalization/
connectivity
— Electric driving/
integrated services
— Autonomous driving
— Strategic/organizational/
structural contribution of
the Board of Management
0% – 200%
-10% – +10%
-25% – +25%
Maximally 235% (cap)
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 111
B.49
Financial target
Achievement of EBIT target results in 150% and is determined by
ROS
target
×
Revenue
base 2018
×
Accumulated growth
factor revenue
200 %
Target achievement target – actual
In billions of euros
100 %
0 %
Actual target achievement
4.3 = 0%
6.7
13.5
15.8
0% for
50% EBIT target
150% for
EBIT target
EBIT
After the conclusion of financial year 2019, a comparison of the
actual and target values was conducted for the transformation
targets of each division. The Supervisory Board derived the
Board of Management’s shared degree of target achievement
from the divisions’ degrees of target achievement as well as
the strategic, organizational and structural contribution of the
Board of Management as a whole, taking into account the
economic environment and the competitive situation and posi-
tioning of the Group. For the financial year 2019 this leads to
the addition of 22% to the degree to which the financial target
has been achieved.
Range of possible target achievement:
Financial target
The range of possible target achievement is between 0% and
200%. The lower limit of this range is 50% of the EBIT target
value; the upper limit is approximately 117% of the EBIT target
value. If the actually achieved EBIT value is at or under the
lower limit of the range, the target achievement degree is always
0%. The total absence of a bonus is therefore possible. If
the EBIT target is achieved, the degree of target achievement
amounts to 150%.
If the actually achieved EBIT value is at or above the upper limit
of the range, the degree of target achievement is always the
maximum 200%. The range of target achievement develops
linearly within the range. B.49
Transformation targets
The transformation targets represent both quantitative and
qualitative aspects. They can add or deduct up to 25 percentage
points to/from the degree to which the financial target has
been achieved.
In order to take into account the implementation of the future-
oriented measures for the technological and sustainable realign-
ment of the Group, the divisions defined key performance
indicators and target values at the beginning of financial year
2019 for the future-oriented CASE fields – Connected, Auto-
nomous, Shared & Services, Electric.
This criteria-based consideration of the future-oriented CASE
fields was based on assessments of the success of product-
related, technical and economic activities/progress. Further-
more, the Company assessed the progress of sustainability/
Environment Social Governance (ESG) aspects and the success
of strategic M&A activities. The defined key performance
indicators are used for measuring the degree to which the trans-
formation targets have been achieved. They also support the
corresponding activities, corrections or implementation steps
of the Group’s sustainability strategy (for example, investment
volume, growth of revenue from digital services, activation and
connectivity rates of digital services, proportion of alternative
drive systems, emission targets, development discipline with
regard to the development progress of products and digital
services, number of online contracts, proportion of digital self-
services, revenue from mobility services).
112 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
B.50
Integrity
Degree of target
achievement
Addition or
deduction
Integrity
indicator
+
Approval rate
of any question
2.5%
2.0%
1.0%
-2.5%
> 80%
71-80%
61-70%
≤ 60%
> 74%
65-74%
60-64%
≤ 59 %
Excellent
Good
Average
Low
B.51
Quality
Degree of target
achievement
Addition or
deduction
Quality KPIs
of all divisions
Excellent
Good
Average
Low
2.5%
2.0%
1.0%
-2.5%
The addition or deduction is dependent
on the respective target value, which is
defined for each specific division and
product.
B.52
Employee engagement
Degree of target
achievement
Addition or
deduction
Employee
engagement
+
Participation
rate
2.5%
2.0%
1.0%
-2.5%
> 35%
31-35%
25-30%
≤ 25%
> 70%
66-70%
61-65%
≤ 60%
Excellent
Good
Average
Low
B.53
Diversity
Degree of target
achievement
Addition or
deduction
Excellent
Good
Average
Low
2.5%
2.0%
1.0%
-2.5%
Gender Diversity
Aspirational Guidelines
Target overachieved ≥ 10%
Target overachieved < 10%
Target achieved
Target not achieved
Non-financial targets
The non-financial targets, which are oriented toward sustainabil-
ity and cultural aspects and have been uniform at all man-
agement levels since financial year 2019, are divided into four
categories. Each category is weighted equally and receives
an addition or a deduction of up to 2.5 percentage points to or
from the degree of achievement of the financial target. After
the end of the financial year, the degree of target achievement
is calculated by comparing the target value and the actual
value. On this basis, an addition to or a deduction from the
degree of financial target achievement of up to a total amount
of 10 percentage points is possible. The total of the addition
or deduction resulting from the non-financial targets is rounded
to two significant figures. For the financial year 2019 this results
in an addition of +3% (rounded).
Specifically:
Achievement of the Group-level targets regarding the further
development and permanent establishment of integrity was
measured on the basis of certain standardized questions in
a global employee survey. This measurement was based
on the achieved approval rate of any question and the average
approval rate achieved across all questions (integrity indica-
tor). This served as the basis for determining that +2.0% of the
target was achieved at the Group level. B.50
Quality and/or customer satisfaction targets (quality KPIs of
all divisions) were defined by the individual divisions for the
financial year. With regard to vehicles, a comparison of the tar-
get number and the actual number of claims during a pre-
defined period of time (MIS xx) was carried out. With regard to
services, this comparison was carried out by means of a cus-
tomer satisfaction index. The degree of target achievement at
the Group level (-2.5%) was derived as a weighted average of
the individual divisional degrees of target achievement. B.51
The degree of the employees’ commitment to the Group
(employee engagement) was calculated on the basis of their
answers to certain standardized questions in our global
employee survey. These answers, together with the partici-
pation rate achieved in the employee survey, were used to derive
a +1.0% degree of target achievement at the Group level for
the maintenance and enhancement of a high level of satisfaction
and motivation among the employees. B.52
A target for the proportion of women in executive positions was
defined at the Group level for a period of several years on
the basis of Daimler’s in-house guidelines for the proportion of
women in management positions (Gender Diversity Aspira-
tional Guidelines), which go beyond the legally obligatory targets.
A +2.0% degree of target achievement was determined for
this in a comparison of actual and target values that was con-
ducted at the end of the financial year. B.53
B.54
Performance Phantom Share Plan (PPSP) –
long-term performance-related remuneration E page 113
B.55
PPSP 2019
dependent upon
Development of
the performance factor
long-term performance-related
remuneration
approx. 40%
amount when granted in euros E page 113
price of Daimler shares when issued
= preliminary number
of phantom shares
(virtual shares)
three-year dividend entitlement
after expiry of third plan year
preliminary number of phantom shares × performance factor
= final number of phantom shares, dividend entitlement in fourth year
after expiry of fourth plan year
final number of phantom shares × Daimler share price at end of plan
= amount paid out
Time of payment of Performance Phantom Share Plan 2019
in February of the year 2023
Compliance
Agreements have been reached with all the members of the
Board of Management allowing for the partial reduction or
complete elimination of the annual bonus for any member who
violates the duties of Section 93 of the German Stock Cor-
poration Act (AktG) or in particular the principles laid down in
the Company’s Integrity Code. If it is not possible to reduce
a future bonus payment or a payment that has yet to be made,
the Board of Management member in question will be required
to pay back the amount of the bonus reduction. The Supervisory
Board has the final decision on all such bonus reductions.
Limit for the annual bonus
The total amount to be paid out from the annual bonus is
limited to 2.35 times the base salary of the respective financial
year.
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 113
– 50% relates to the “return on sales”
achieved in a three-year comparison
with the defined group of competitors
E page 114
Bandwidth of possible target achieve-
ment:
0% – 200%1
– 50% relates to “relative share perfor-
mance,” i.e. the performance of Daim-
ler’s share in a three-year comparison
with the performance of the defined
group of competitors (index).
Bandwidth of possible target achieve-
ment:
0% – 200%
Development of the
Daimler share price
Price when issued and price at the end of
the plan period Bandwidth of possible price
development:
maximum of 2.5 times the issue price
Maximum performance development (total cap):
2.5 times the amount granted (including dividend equivalent pay-
ments throughout the plan period)
Stock ownership guidelines
Share purchase obligation of up to 25% of the gross remuneration
until the defined number of shares (between 20,000 and 75,000) has
been purchased (shares to be held until the end of the term of ser-
vice)
1 Maximum of 195% if, in the event of target achievement of 195% –
200%, the strategic return target has not been reached.
The Performance Phantom Share Plan (PPSP) is a variable
element of remuneration with long-term incentive effects.
At the beginning of the plan, the Supervisory Board specifies
a grant value (absolute amount in euros) in the context of
setting the individual annual target remuneration. This amount
is divided by the relevant average price of Daimler shares
calculated over a predefined long period of time, which results
in the preliminary number of phantom shares allocated.
Also at the beginning of the plan, performance targets are set
for a period of three years (performance period). Depending
on the achievement of these performance targets with a pos-
sible range of 0% to 200%, after three years the phantom
shares allocated at the beginning of the plan are converted
into the final number of phantom shares allocated.After
another plan year has elapsed (retention period), the amount to
be paid out is calculated from this final number of phantom
shares and the applicable share price at that time. The share
price relevant for the payout under this plan is also relevant
for allocating the preliminary number of phantom shares for the
plan newly issued in the respective year. B.54 B.55
114 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
Performance parameters for Plan 2019:
– 50% relates to the Group’s return on sales in a three-year
comparison with a group of competitors comprising listed
vehicle manufacturers with an automotive component of
more than 70% by revenue and an investment-grade credit
rating (BMW, Ford, GM, Honda, Hyundai, Isuzu, Kia, Mazda,
Nissan, Paccar, Subaru, Suzuki, Toyota, Volvo and Volkswa-
gen). For the measurement of success, the competitors’
average return on sales is calculated over a period of three
years. Target achievement occurs to the extent to which
Daimler’s return on sales deviates by a maximum of +/-2
percentage points from 105% of the calculated average
of the competitors.
– Target achievement of 100% only occurs when the average
return on sales of the Daimler Group reaches 105% of the
revenue-weighted average return on sales of the group of
competitors. Maximum target achievement of 200%
occurs if Daimler’s return on sales exceeds 105% of the
revenue-weighted average of the competitors by 2
percentage points or more. An additional limitation was
implemented starting with PPSP 2015: If a target achieve-
ment of between 195% and 200% occurs, the maximum
target achievement calculated from the performance
parameter of return on sales compared to the group of
competitors will only be deemed to be 200% if the actual
return on sales for Daimler’s automotive business
reaches at least the strategic target for return on sales
in the third year of the performance period. Otherwise,
target achievement will be limited to 195%.
– Target achievement of 0% occurs if Daimler’s return on sales
is 2 percentage points or more lower. In the deviation
range of +/- 2 percentage points, target achievement var-
ies in proportion to the deviation.
– 50% relates to “relative share performance,” i.e. the perfor-
mance of Daimler’s share in a three-year comparison with
the performance of the defined group of competitors (index).
If the performance of Daimler’s share (in percent) is the
same as that of the index (in percent), target achievement is
deemed to be 100%. If the performance of Daimler’s share
price (in percent) is 50 percentage points or more below
(above) the performance of the index, target achievement
is deemed to be 0% (200%). In the deviation range of +/- 50
percentage points, target achievement varies in proportion
to the deviation.
Range of possible target achievement:
0 to 200%, that is, the plan has an upper limit. It may also
be zero.
Value upon allocation:
Determined annually by the Supervisory Board; for 2019,
approximately 1.4 times the base salary.
Value of the phantom shares on payout:
During the four-year period between the allocation of the pre-
liminary phantom shares and the payout of the plan proceeds,
the phantom shares earn a dividend equivalent in the amount
of the actual dividend paid on ordinary Daimler shares.
The value of the phantom shares to be paid out after the con-
clusion of the plan period depends on target achievement mea-
sured according to the criteria described above and on the
share price relevant for the payout. This share price is limited
to 2.5 times the share price at the beginning of the plan. In
addition, the amount to be paid out is limited to 2.5 times the
absolute euro amount specified at the beginning of the plan,
which is relevant for the preliminary number of phantom shares
allocated. This maximum amount also includes the dividend
equivalent paid out during the four-year plan period.
The terms governing the PPSP include a provision that allows
for the partial reduction or complete elimination of the annual
bonus for any member of the Board of Management who
clearly violates the principles laid down in the Company’s
Integrity Code or any other professional obligations, prior
to the payout of the plan proceeds. The Supervisory Board
has the final decision on all such bonus reductions.
Policies for share ownership
As a supplement to these three components of remuneration,
“Stock Ownership Policies” exist for the Board of Manage-
ment. These guidelines require the members of the Board of
Management to purchase Daimler shares over several years
and to hold those shares until the end of their Board of Man-
agement membership. The number of shares to be held is
set between 20,000 and 75,000. In fulfillment of the policies,
up to 25% of the gross remuneration out of each Performance
Phantom Share Plan is generally to be used to acquire ordinary
shares in the Company, but the required shares can also be
acquired in other ways.
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 115
B.56
Overview of the determination of the annual bonus from January 1, 2020
Financial targets
Strategic objective for both
financial targets
— EBIT targeted/actual com-
parison (50% weighting)
— Free cash flow of the
industrial business tar-
geted/actual comparison
(50% weighting)
Non-financial targets
— Employee targets
— Customer targets
— Diversity targets
— Integrity targets
Transformation targets
— Sustainability
— Digitalization/
connectivity/
integrated services
— Electric driving/
autonomous driving
— 50% payout after one year
— 50% deferral coupled with
share price perfor-
mance compared to
competitors
0% – 200%
-10% – +10%
0% – 25%
Maximally 200% (cap)
Further refinement of the remuneration system
with effect from January 1, 2020
Change to the annual bonus as a short-term and medium-
term component of the remuneration
Effective in financial year 2019, the annual bonus was revised
in view of the fundamental technological changes and the
associated changes in the competitive environment in our
industry, as well as changing customer behavior, the need
for significant investments in new technologies, and the expec-
tations of our shareholders. The main focus was on the imple-
mentation of the new corporate strategy and on safeguarding
the Group’s future by expanding our business model as an
automaker and a provider of mobility services.
sess the Board of Management remuneration system. In
its meeting in December 2019, the Supervisory Board decided
to further refine the Board of Management remuneration
system as of January 1, 2020. This decision was made on the
basis of the latest conditions, Daimler’s in-house corporate
strategy, and the expectations of our shareholders. The changes
only affect the organization of the annual bonus and are
explained below.
Because the Supervisory Board and the Board of Management
continue to consider it important to have a uniform incentive
system, the Board of Management has also decided to make a
corresponding adjustment to the annual bonus for all the other
management levels.
At the beginning of 2020, the Act on the Implementation of the
Second Shareholders’ Rights Directive (Gesetz zur Umsetzung
der zweiten Aktionärsrechterichtlinie/ARUG II) went into effect.
Subject to the implementation periods specified therein, it will
extensively change the requirements regarding Board of Man-
agement remuneration. The new German Corporate Governance
Code (DCGK), which is expected to come into effect in the
first quarter of 2020, will also contain new recommendations
regarding the remuneration of members of the Board of Man-
agement. The Supervisory Board took this opportunity to reas-
Additional financial target
In times of comprehensive transformation, it is especially
important to align the incentives in the remuneration system
with a responsible prioritization of the allocation of capital.
As a result, the free cash flow of the industrial business will be
included as an additional financial target and have equal
weight to the Daimler Group’s operating result (EBIT). In addition
to EBIT, the free cash flow of the industrial business is one
of the most important financial performance indicators for the
Daimler Group’s operational financial performance.
116 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
B.57
Financial targets:
EBIT and free cash flow of the industrial business (FCF IB)
Achievement of EBIT respectively FCF IB target results in 150% target achievement
200 %
150 %
100 %
50 %
0 %
Target achievement target – actual
0% for
25% target
150% for
target
200% for
125% target
EBIT /
FCF IB
The free cash flow of the industrial business, which comprises
the cash flows at the automotive business divisions and the
cash flows from taxes and other reconciliation items that can-
not be allocated to the divisions, is of particular importance
for the financial strength of the Daimler Group.
The target value of EBIT for each financial year continues to be
derived on the basis of the desired medium-term return, which
is set by the Supervisory Board and is ambitious and oriented
toward the competitive environment, and derived from the
growth targets. The starting point of the calculation is now the
revenue of the previous financial year. The target value for
the free cash flow of the industrial business in the respective
financial year is based on the defined target EBIT of the seg-
ments of the automobile business (which, in turn, is derived from
the strategic growth and return on sales targets) as well as
on a strategic target for the cash conversion rate. The cash con-
version rate is the proportion of the period’s result that is
scheduled to flow into the Group’s liquidity after the payments
for the necessary investments in research, development,
tangible fixed assets, and working capital are taken into account
as part of the strategic growth target.
As part of the comparison of target and actual values, the
actually achieved value used in determining the free cash flow
target achievement is adjusted for certain factors that were
already taken into account in the target achievement of the
annual bonus in 2019 or earlier.
The range of possible target achievement for the two financial
targets (EBIT and free cash flow of the industrial business)
is between 0% and 200%. The lower limit of this range is 25% of
the target value; the upper limit is 125% of the target value.
If the actually achieved value is at or under the lower limit of
the range, the target achievement degree is always 0%. The
total absence of a bonus is therefore possible. If the actually
achieved value is at or above the upper limit of the range,
the target achievement degree is 200%, which is the maximum
it can reach. The degree of target achievement develops lin-
early within the range. B.57
The total amount to be paid out from the annual bonus is lim-
ited to 2 times the base salary of the respective financial year.
Non-financial targets
The non-financial targets are uniform at all management levels
and continue to be divided into four equally weighted catego-
ries. Each category receives an addition or a deduction of up to
2.5 percentage points to or from the degree of achievement
of the financial target.
After the end of the financial year, the degree of achievement
of the non-financial targets is calculated by comparing the tar-
get values and the actual values. An addition to or deduction
from the degree of target achievement of the financial targets
of up to a total of 10 percentage points is possible. The rele-
vant target tiers for financial year 2020 can be found in tables
B.58, B.59, B.60 and B.61.
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 117
B.58
Integrity
Degree of target
achievement
Addition or
deduction
Integrity
indicator
+
Approval rate
of any question
2.5%
2.0%
1.0%
-2.5%
> 80%
71-80%
61-70%
≤ 60%
> 74%
65-74%
60-64%
≤ 59%
Excellent
Good
Average
Low
B.59
Quality
Degree of target
achievement
Addition or
deduction
Quality KPIs
of all divisions
Excellent
Good
Average
Low
2.5%
2.0%
1.0%
-2.5%
The addition or deduction is depen-
dent on the respective target value,
which is defined for each specific divi-
sion and product.
B.60
Employee engagement
Degree of target
achievement
Addition or
deduction
Employee
engagement
+
Participation
rate
2.5%
2.0%
1.0%
-2.5%
> 35%
31-35%
25-30%
≤ 25%
> 70%
66-70%
61-65%
≤ 60%
Excellent
Good
Average
Low
B.61
Diversity
Degree of target
achievement
Addition or
deduction
Excellent
Good
Average
Low
2.5%
2.0%
1.0%
-2.5%
Gender Diversity
Aspirational Guidelines
Target overachieved ≥ 10%
Target overachieved < 10%
Target achieved
Target not achieved
Transformation targets
Effective as of financial year 2019, transformation targets
replaced the previous shared performance value for the Board
of Management as a whole, which was derived from the
Board of Management members’ individual target agreements
and degrees of target achievement. Especially during the
transformation phase, these transformation targets refer to
quantitative as well as qualitative aspects and are assessed
and evaluated accordingly by the Supervisory Board. Sustain-
ability/Environment Social Governance (ESG) aspects will
play an even more explicit role for the transformation targets
in the future, because sustainability is an integral part of
our corporate strategy and thus an important factor in our
business activities.
Against this backdrop, other performance continues to be taken
into account in the transformation targets within the context
of the implementation of our sustainability strategy (for exam-
ple, growth of revenue from digital services, activation and
connectivity rates of digital services, proportion of alternative
drive systems, emission targets, development discipline,
development progress of products and digital services, number
of online contracts, proportion of digital self-services, revenue
from mobility services). In order to further reduce the method-
ological complexity of the Board of Management remuneration
system, the target tier of the transformation targets was aligned
so that it can no longer result in a deduction from the degree
of target achievement for the financial targets in the future.
Reduction of the maximum target achievement in the
annual bonus (cap)
The maximum target achievement in the annual bonus (cap) will
be reduced from 235% to 200% of the target bonus. In this
way we are maintaining the current opportunity-risk profile of
the annual bonus while at the same time taking the adjust-
ment of the target tier of the transformation targets into account.
The higher relative weighting of the non-financial targets and
transformation targets in the total target achievement further
underlines their significance.
No change in the other components of the remuneration
system
The remainder of the remuneration system, in particular the
composition of the remuneration of the Board of Management
from the non-performance-related base salary, the annual
bonus as a short-term and medium-term variable component
with deferral and the long-term variable component PPSP,
also remains unchanged, as does the relationship between the
individual components of the remuneration. The current
design of the PPSP, with the four-year duration of the plan, the
measurement of the success targets compared to a defined
and regularly monitored group of competitors that face the same
strategic challenges, and the linkage with the absolute devel-
opment of the share price, is already oriented toward the long-
term success of the company.
118 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
B.62
Annual bonus
(short- and medium-term variable remuneration of the
Board of Management members active at year-end)
50%(cid:31)
medium-term
(deferral)
50% (cid:31)
short-term
235
200
175
150
125
100
75
50
25
0
Maximum 235% of the base salary
+10% of the base salary
+25% of the base salary
200% of the (cid:31)
base salary
50% medium-term
(deferral)
50% short-term
ACTUAL
25% of the base salary
+3% of the base salary
+22% of the base salary
0% of the base salary
Non-financial success parameters(cid:31)
+/- 10%
Transformation targets (cid:31)
+/- 25%
Financial success
parameters(cid:31)0% – 200%
B.63
PPSP 2015 (paid in 2019)
(long-term variable remuneration B.67)
Maximum
theoretically 500%
of the grant value
With more than 250% target
achievement, the total cap¹ applies.
Maximum
250%
Maximum
200%
ACTUAL
100%
ACTUAL
102%
ACTUAL
67%
ACTUAL
68%
500
450
400
350
300
250
200
150
100
50
0
Grant value(cid:31)(from
which is derived
the preliminary
number of phantom
shares with the
share price(cid:31)at
beginning of plan
€74.14)
Performance factor
0% - 200%(cid:31)(from
which is derived
the final number of
phantom shares
with the share price
at beginning of plan)
Development of
Daimler share price
from beginning
until end of plan,
maximum 2.5 times
the issue price(cid:31)
(share price in €)
Overall target
achievement
final number of(cid:31)
phantom shares (cid:31)
times share price (cid:31)
at end of plan(cid:31)
€49.62)(cid:31)
1 Amount paid out including dividend-equivalent
payments of PPSP 2015.
Board of Management remuneration in financial
year 2019
Board of Management remuneration in 2019 pursuant to
Section 314 Subsection 1 No. 6 of the German Commercial
Code (HGB)
The total remuneration granted by Group companies (excluding
retirement benefit commitments) to the members of the Board
of Management of Daimler AG is calculated as the total of the
amounts of
– the base salary in 2019,
– the half of the annual bonus for 2019 payable in 2020 and
measured as of the end of the reporting period,
– the half of the medium-term share-based component of the
annual bonus for 2019 payable in 2021 with its value at
the end of the reporting period (entitlement depending on the
development of Daimler’s share price compared with the
STOXX Europe Auto Index),
– the value of the long-term share-based remuneration (PPSP)
at the time when granted in 2019, and
– the taxable non-cash benefits in 2019.
For both of the share-based components – the second 50% of
the annual bonus and the PPSP with a long-term orientation –
the amounts actually paid out can deviate significantly from
the values described depending on the development of the
Daimler share price and on the achievement of the relevant
target parameters. Upward deviation is possible only as far
as the maximum limits described above. Both components can
also be zero.
The possible upper limits with regard to the annual bonus and
the PPSP are shown in tables B.62 and B.63.
The total remuneration of the Board of Management for the finan-
cial year 2019 amounts to €24.2 million (2018: €24.7 million).
Of that total, €8.9 million was fixed, that is, non-performance-
related remuneration (2018: €9.5 million), €2.0 million (2018:
€5.0 million) was short-term and medium-term variable perfor-
mance-related remuneration (annual bonus with deferral),
and €13.3 million was variable performance-related remunera-
tion granted in the financial year 2019 with a long-term incentive
effect (2018: €10.2 million). B.64
The granting of non-cash benefits in kind, primarily expenses
for security precautions and the provision of company cars,
resulted in taxable benefits for the members of the Board of
Management in 2019 as shown in table B.65.
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 119
B.64
Board of Management remuneration in 2019
In thousands of euros
Ola Källenius1
Martin Daum
Renata Jungo Brüngger
Wilfried Porth
Markus Schäfer2
Britta Seeger
Hubertus Troska
Harald Wilhelm3
Bodo Uebber4
Dr. Dieter Zetsche4
Total
Base salary
Short and medium-term variable
remuneration (annual bonus)
Long-term variable
remuneration (PPSP)
Total
Short-term
Medium-term
Number Value when granted
(2019: at share price €50.00)
(2018: at share price €70.13)
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
1,340
832
832
832
832
832
832
832
508
–
832
832
832
832
638
–
379
967
804
2,048
7,829
8,007
168
260
104
260
104
260
104
260
64
–
104
260
104
260
80
–
47
302
101
640
168
260
104
260
104
260
104
260
64
–
104
260
104
260
80
–
47
302
101
640
36,982
14,896
22,169
14,896
22,169
14,896
23,177
15,573
17,735
–
22,169
14,896
22,169
14,896
16,627
–
26,502
17,807
56,429
37,915
1,849
1,045
1,108
1,045
1,108
1,045
1,159
1,092
887
–
1,108
1,045
1,108
1,045
831
–
1,325
1,249
2,822
2,659
3,525
2,397
2,148
2,397
2,148
2,397
2,199
2,444
1,523
–
2,148
2,397
2,148
2,397
1,629
–
1,798
2,820
3,828
5,987
980
2,502
980
2,502
266,128
145,775
13,305
10,225
23,094
23,236
1 Board of Management remuneration paid as a member until May 21, 2019; as the Chairman from May 22, 2019.
2 Board of Management remuneration paid from May 22, 2019.
3 Board of Management remuneration paid from April 1, 2019.
4 Board of Management remuneration paid until May 22, 2019.
B.65
Taxable non-cash benefits and other fringe benefits
2019
2018
In thousands of euros
Ola Källenius1
Martin Daum
Renata Jungo Brüngger
Wilfried Porth
Markus Schäfer2
Britta Seeger
Hubertus Troska3
Harald Wilhelm4
Bodo Uebber5
Dr. Dieter Zetsche5
90
120
95
87
57
94
394
62
44
65
161
121
93
88
–
164
494
–
164
195
Total
1,108
1,480
1 Board of Management remuneration paid as a member until May 21,
2019; as the Chairman from May 22, 2019 (2018: including an
anniversary bonus of €69,456.50).
2 Board of Management remuneration paid from May 22, 2019.
3 For the fulfillment of disclosure obligations pursuant to Section 285
No. 9a of the German Commercial Code (HGB), this amount is
reduced by €149,366 for the financial year 2019 (2018: €182,254).
The corresponding fringe benefits were granted and borne by a
subsidiary and are thus not included in the remuneration to be dis-
closed in the annual financial statements of the parent company,
Daimler AG.
4 Board of Management remuneration paid from April 1, 2019.
5 Board of Management remuneration paid until May 22, 2019.
120 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
Details of Board of Management remuneration in 2019
pursuant to the requirements of the German Corporate
Governance Code
The following tables show for each individual member of the
Board of Management on the one hand the benefits granted for
the financial year and on the other hand the payments made
in or for the reporting year and the retirement pension expense
in or for the year under review in accordance with the recom-
mendations of Clause 4.2.5 paragraph 3 of the German Corpo-
rate Governance Code as amended on February 7, 2017.
The total of “benefits granted” for financial year 2018 is calcu-
lated from
– the base salary in 2018,
– the taxable non-cash benefits and other fringe benefits in
2018,
– the half of the annual bonus paid in 2019 for 2018 at the
value for target achievement of 100%,
– the half of the medium-term annual bonus payable in 2020
for 2018 at the value for target achievement of 100% (defer-
ral),
– the value of the long-term share-based remuneration (PPSP)
at the time when granted in 2018 (payable in 2022), and
– the retirement pension expense in 2018 (service costs in
The total of “benefits granted” for financial year 2019 is calcu-
lated from
– the base salary in 2019,
– the taxable non-cash benefits and other fringe benefits in
2019,
– the half of the annual bonus payable in 2020 for 2019 at the
value for target achievement of 100%,
– the half of the medium-term annual bonus payable in 2021
for 2019 at the value for target achievement of 100% (defer-
ral),
– the value of the long-term share-based remuneration (PPSP)
at the time when granted in 2019 (payable in 2023), and
– the retirement pension expense in 2019 (service costs in
2019).
The total of “payments made” for financial year 2018 is calcu-
lated from
– the base salary in 2018,
– the taxable non-cash benefits and other fringe benefits in
2018,
– the half of the annual bonus paid in 2019 for 2018 at the
value as of the end of the reporting period in financial year
2018,
– the half of the medium-term annual bonus paid in 2018 for
2018).
2016 (deferral),
– the value of the long-term share-based remuneration (PPSP
2014) paid in 2018,
– the dividend equivalent of the current PPSP (2015, 2016,
2017 and 2018) paid in 2018, and
– the retirement pension expense in 2018 (service costs in
2018).
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 121
The caps possible to ensure the total maximum amount shown
in the table of benefits granted for financial year 2018 are
implemented with the payout of PPSP 2018, which constitutes
the last payment to be made of the components of remu-
neration granted in financial year 2018. For financial year 2018,
therefore, the possible cap would take place in 2022, the year
that PPSP 2018 is paid out.
The total of “payments made” for financial year 2019 is calcu-
lated from
– the base salary in 2019,
– the taxable non-cash benefits and other fringe benefits in
2019,
– the half of the annual bonus payable in 2020 for 2019 at the
value as of the end of the reporting period,
– the half of the medium-term annual bonus paid in 2019 for
2017 (deferral),
– the value of the long-term share-based remuneration (PPSP
2015) paid in 2019,
– the dividend equivalent of the current PPSP (2016, 2017,
2018 and 2019) paid in 2019, and
– the retirement pension expense in 2019 (service costs in
2019).
The caps possible to ensure the total maximum amount shown
in the table of benefits granted for reporting year 2019 are
implemented with the payout of PPSP 2019, which constitutes
the last payment to be made of the components of remu-
neration granted in financial year 2019. For financial year 2019,
therefore, the possible cap would take place in 2023, the year
that PPSP 2019 is paid out.
122 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
B.66
Benefits granted
In thousands of euros
Base salary
Taxable non-cash benefits
and other fringe benefits
Total
Annual variable remuneration
(50% of annual bonus, short-term)
Deferral (50% of annual bonus,
medium-term)
Long-term variable remuneration
(plan period of 4 years)
Total
Retirement pension expense (service costs)
Total remuneration
Total limit1 for components of remuneration
granted in the reporting year excluding:
– Taxable non-cash benefits and other fringe benefits
– Retirement pension expense (service costs)
Ola Källenius2
Chairman of the Board of Management,
Chairman of the Board of Management of Mercedes-Benz AG
Martin Daum
Chairman of the Board of Management of
Daimler Truck AG
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31 Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
2018
2019
min.
max.
2018
2019
min.
max.
832
1,340
1,340
1,340
832
832
832
832
161
993
90
90
90
1,430
1,430
1,430
121
953
120
952
120
952
416
670
416
670
1,045
1,877
257
1,849
3,189
261
0
0
0
0
261
1,575
1,575
4,588
7,738
261
416
416
416
416
1,045
1,877
244
1,108
1,940
250
0
0
0
0
250
120
952
978
978
2,750
4,706
250
3,127
4,880
1,691
9,429
3,074
3,142
1,202
5,908
5,252
7,878
5,252
5,252
1 Total limit 1.7 times for Mr. Källenius as of May 22, 2019 (1.5 times for Dr. Zetsche)/1.9 times target remuneration
(base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).
2 Board of Management remuneration paid as a member until May 21, 2019; as the Chairman from May 22, 2019.
Benefits granted
In thousands of euros
Base salary
Taxable non-cash benefits
and other fringe benefits
Total
Annual variable remuneration
(50% of annual bonus, short-term)
Deferral (50% of annual bonus,
medium-term)
Long-term variable remuneration
(plan period of 4 years)
Total
Retirement pension expense (service costs)
Total remuneration
Total limit1 for components of remuneration
granted in the reporting year excluding:
– Taxable non-cash benefits and other fringe benefits
– Retirement pension expense (service costs)
Renata Jungo Brüngger
Integrity & Legal Affairs
Wilfried Porth
HR and Labor Relations Director &
Mercedes-Benz Vans
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31 Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
2018
2019
min.
max.
2018
2019
min.
max.
832
832
832
832
832
832
832
832
93
925
95
927
95
927
416
416
416
416
1,045
1,877
251
1,108
1,940
254
0
0
0
0
254
95
927
978
978
2,750
4,706
254
88
920
87
919
87
919
416
416
416
416
1,092
1,924
292
1,159
1,991
0
0
0
0
0
0
87
919
978
978
2,875
4,831
0
3,053
3,121
1,181
5,887
3,136
2,910
919
5,750
5,252
5,252
5,347
5,347
1 Total limit 1.7 times for Mr. Källenius as of May 22, 2019 (1.5 times for Dr. Zetsche)/1.9 times target remuneration
(base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 123
Benefits granted
In thousands of euros
Base salary
Taxable non-cash benefits
and other fringe benefits
Total
Annual variable remuneration
(50% of annual bonus, short-term)
Deferral (50% of annual bonus,
medium-term)
Long-term variable remuneration
(plan period of 4 years)
Total
Retirement pension expense (service costs)
Total remuneration
Total limit1 for components of remuneration
granted in the reporting year excluding:
– Taxable non-cash benefits and other fringe benefits
– Retirement pension expense (service costs)
Markus Schäfer
Group Research &
Mercedes-Benz Cars Development
Britta Seeger
Mercedes-Benz Cars Marketing & Sales
Jan. 1 – Dec. 31
May 22 – Dec. 31 Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
2018
2019
min.
max.
2018
2019
min.
max.
–
–
–
–
–
–
–
–
–
–
508
508
508
832
832
832
832
57
565
254
254
887
1,395
155
57
565
0
0
0
0
155
57
565
597
597
2,200
3,394
155
164
996
94
926
94
926
416
416
416
416
1,045
1,877
248
1,108
1,940
254
0
0
0
0
254
94
926
978
978
2,750
4,706
254
2,115
720
4,114
3,121
3,120
1,180
5,886
3,602
5,252
5,252
1 Total limit 1.7 times for Mr. Källenius as of May 22, 2019 (1.5 times for Dr. Zetsche)/1.9 times target remuneration
(base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).
Benefits granted
In thousands of euros
Base salary
Taxable non-cash benefits
and other fringe benefits
Total
Annual variable remuneration
(50% of annual bonus, short-term)
Deferral (50% of annual bonus,
medium-term)
Long-term variable remuneration
(plan period of 4 years)
Total
Retirement pension expense (service costs)
Total remuneration
Total limit1 for components of remuneration
granted in the reporting year excluding:
– Taxable non-cash benefits and other fringe benefits
– Retirement pension expense (service costs)
Hubertus Troska
Greater China
Harald Wilhelm
Finance & Controlling,
Daimler Mobility
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31 Jan. 1 – Dec. 31
April 1 – Dec. 31
2018
2019
min.
max.
2018
2019
min.
max.
832
832
832
832
494
394
394
394
1,326
1,226
1,226
1,226
416
416
416
416
1,045
1,877
244
1,108
1,940
250
0
0
0
0
250
978
978
2,750
4,706
250
3,447
3,416
1,476
6,182
–
–
–
–
–
–
–
–
–
638
638
638
62
700
319
319
831
1,469
218
62
700
0
0
0
0
218
62
700
750
750
2,063
3,563
218
2,387
918
4,481
5,252
5,252
3,990
1 Total limit 1.7 times for Mr. Källenius as of May 22, 2019 (1.5 times for Dr. Zetsche)/1.9 times target remuneration
(base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).
124 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
Benefits granted
In thousands of euros
Base salary
Taxable non-cash benefits
and other fringe benefits
Total
Annual variable remuneration
(50% of annual bonus, short-term)
Deferral (50% of annual bonus,
medium-term)
Long-term variable remuneration
(plan period of 4 years)
Total
Retirement pension expense (service costs)
Total remuneration
Total limit1 for components of remuneration
granted in the reporting year excluding:
– Taxable non-cash benefits and other fringe benefits
– Retirement pension expense (service costs)
Bodo Uebber
Finance & Controlling,
Daimler Financial Services
Dr. Dieter Zetsche
Chairman of the Board of Management,
Head of Mercedes-Benz Cars
Jan. 1 – Dec. 31
Jan. 1 – May 22 Jan. 1 – Dec. 31
Jan. 1 – May 22
2018
2019
min.
max.
2018
2019
min.
max.
966
379
379
379
2,048
804
804
804
164
1,130
44
423
44
423
483
190
483
190
1,249
2,215
886
1,325
1,705
362
0
0
0
0
362
44
423
447
447
3,288
4,182
362
195
2,243
65
869
65
869
1,024
402
1,024
402
2,659
4,707
0
2,822
3,626
0
0
0
0
0
0
65
869
945
945
7,000
8,890
0
4,231
2,490
785
4,967
6,950
4,495
869
9,759
6,171
3,940
10,344
6,612
1 Total limit 1.7 times for Mr. Källenius as of May 22, 2019 (1.5 times for Dr. Zetsche)/1.9 times target remuneration
(base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).
B.67
Payments made
In thousands of euros
Base salary
Taxable non-cash benefits and other fringe benefits
Total
Annual variable remuneration
(50% of annual bonus, short-term)
Deferral (50% of annual bonus, medium-term)
Long-term variable remuneration
Payment of PPSP 2014
Payment of PPSP 2015
Dividend equivalent PPSP 2015
Dividend equivalent PPSP 2016
Dividend equivalent PPSP 2017
Dividend equivalent PPSP 2018
Dividend equivalent PPSP 2019
Total
Retirement pension expense (service costs)
Total remuneration3
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 125
Ola Källenius1
Chairman of the Board of Management,
Chairman of the Board of Management of Mercedes-Benz AG
Martin Daum2
Chairman of the Board of Management
of Daimler Truck AG
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
2018
2019
2018
2019
832
161
993
260
525
402
–
55
60
56
54
–
1,412
257
2,662
1,340
90
1,430
168
728
–
751
–
40
50
48
120
1,905
261
3,596
832
121
953
260
–
510
–
20
22
56
54
–
922
244
2,119
832
120
952
104
607
–
277
–
16
50
48
72
1,174
250
2,376
2,162
1 Payments as a Board of Management member made up to May 21, 2019; as the Chairman from May 22, 2019.
2 Payments from the long-term variable remuneration also include amounts granted before the Board of Management membership.
3 Amount actually paid during the financial year: (The difference pertains
to the annual variable remuneration paid at the beginning of the follow-
ing year compared to the non-cash benefits in kind that were not paid
out and the retirement pension expense).
2,784
2,161
3,337
126 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
Payments made
In thousands of euros
Base salary
Taxable non-cash benefits and other fringe benefits
Total
Annual variable remuneration
(50% of annual bonus, short-term)
Deferral (50% of annual bonus, medium-term)
Long-term variable remuneration
Payment of PPSP 2014
Payment of PPSP 2015
Dividend equivalent PPSP 2015
Dividend equivalent PPSP 2016
Dividend equivalent PPSP 2017
Dividend equivalent PPSP 2018
Dividend equivalent PPSP 2019
Total
Retirement pension expense (service costs)
Total remuneration2
Renata Jungo Brüngger1
Integrity & Legal Affairs
Wilfried Porth
HR and Labor Relations Director &
Mercedes-Benz Vans
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
2018
2019
2018
2019
832
93
925
260
525
208
–
9
60
56
54
–
1,172
251
2,348
832
95
927
104
728
–
120
–
40
50
48
72
1,162
254
2,343
832
88
920
260
525
1,448
–
58
62
59
57
–
2,469
292
3,681
832
87
919
104
728
–
785
–
42
52
51
75
1,837
-
2,756
1 Payments from the long-term variable remuneration also include amounts granted before the Board of Management membership.
2 Amount actually paid out during the financial year: (The difference
pertains to the annual variable remuneration paid at the beginning of the
following year compared to the non-cash benefits in kind that were not
paid out and the retirement pension expense).
2,544
2,150
3,841
2,825
Payments made
In thousands of euros
Base salary
Taxable non-cash benefits and other fringe benefits
Total
Annual variable remuneration
(50% of annual bonus, short-term)
Deferral (50% of annual bonus, medium-term)
Long-term variable remuneration
Payment of PPSP 2014
Payment of PPSP 2015
Dividend equivalent PPSP 2015
Dividend equivalent PPSP 2016
Dividend equivalent PPSP 2017
Dividend equivalent PPSP 2018
Dividend equivalent PPSP 2019
Total
Retirement pension expense (service costs)
Total remuneration2
Markus Schäfer1
Group Research &
Mercedes-Benz Cars Development
Britta Seeger1
Mercedes-Benz Cars Marketing &
Sales
Jan. 1 – Dec. 31 May 22 – Dec. 31
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
2018
2019
2018
2019
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
508
57
565
64
–
–
–
–
13
17
19
58
171
155
891
832
164
996
260
–
56
–
3
6
56
54
–
435
248
1,679
832
94
926
104
728
–
37
–
4
50
48
72
1,043
254
2,223
1 Payments from the long-term variable remuneration also include amounts granted before the Board of Management membership.
2 Amount actually paid out during the financial year: (The difference
pertains to the annual variable remuneration paid at the beginning of the
following year compared to the non-cash benefits in kind that were not
paid out and the retirement pension expense).
–
615
1,807
2,031
Payments made
In thousands of euros
Base salary
Taxable non-cash benefits and other fringe benefits
Total
Annual variable remuneration
(50% of annual bonus, short-term)
Deferral (50% of annual bonus, medium-term)
Long-term variable remuneration
Payment of PPSP 2014
Payment of PPSP 2015
Dividend equivalent PPSP 2015
Dividend equivalent PPSP 2016
Dividend equivalent PPSP 2017
Dividend equivalent PPSP 2018
Dividend equivalent PPSP 2019
Total
Retirement pension expense (service costs)
Total remuneration1
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 127
Hubertus Troska
Greater China
Harald Wilhelm
Finance & Controlling,
Daimler Mobility
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31
Jan. 1 – Dec. 31 April 1 – Dec. 31
2018
2019
2018
2019
832
494
1,326
260
525
1,385
–
55
60
56
54
–
2,395
244
3,965
832
394
1,226
104
728
–
751
–
40
50
48
72
1,793
250
3,269
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
638
62
700
80
–
–
–
–
–
–
–
54
134
218
1,052
692
1 Amount actually paid out during the financial year: (The difference
pertains to the annual variable remuneration paid at the beginning of the
following year compared to the non-cash benefits in kind that were not
paid out and the retirement pension expense).
3,767
2,781
Payments made
In thousands of euros
Base salary
Taxable non-cash benefits and other fringe benefits
Total
Annual variable remuneration
(50% of annual bonus, short-term)
Deferral (50% of annual bonus, medium-term)
Long-term variable remuneration
Payment of PPSP 2014
Payment of PPSP 2015
Dividend equivalent PPSP 2015
Dividend equivalent PPSP 2016
Dividend equivalent PPSP 2017
Dividend equivalent PPSP 2018
Dividend equivalent PPSP 2019
Total
Retirement pension expense (service costs)
Total remuneration1
Bodo Uebber
Finance & Controlling,
Daimler Financial Services
Dr. Dieter Zetsche
Chairman of the Board of Management,
Head of Mercedes-Benz Cars
Jan. 1 – Dec. 31
Jan. 1 – May 22
Jan. 1 – Dec. 31
Jan. 1 – May 22
2018
2019
2018
2019
967
164
1,131
302
624
1,656
–
66
71
67
65
–
2,851
886
4,868
379
44
423
47
848
898
–
–
–
–
–
1,793
362
2,578
2,048
195
2,243
640
1,349
3,463
–
138
149
144
138
–
6,021
–
8,264
804
65
869
101
1,780
1,877
–
–
–
–
–
3,758
–
4,627
1 Amount actually paid out during the financial year: (The difference
pertains to the annual variable remuneration paid at the beginning of the
following year compared to the non-cash benefits in kind that were not
paid out and the retirement pension expense).
4,448
2,679
9,407
5,635
128 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
Commitments upon termination of service
Retirement provision
In 2012, Daimler introduced a new company retirement benefit
plan for new entrants and new appointments for employees
paid according to collective bargaining wage tariffs as well as
for executives: the “Daimler Pensions Plan.” This retirement
benefit system features the payment of annual contributions by
Daimler and is oriented toward the capital market. Daimler
makes a commitment to guarantee the total of contributions
paid, which are invested in the capital market according to
a precautionary investment concept.
The Supervisory Board of Daimler AG has approved the appli-
cation of this system for all members of the Board of Man-
agement newly appointed since 2012. The amount of the annual
contributions results from a fixed percentage of the base salary
and the total annual bonus for the respective financial year
calculated as of the balance sheet date. This percentage is 15%.
This calculation takes into consideration the maximum level
of retirement provision for each Board of Management member –
also according to the period of membership – and the result-
ing annual and long-term expense for the Company. The contri-
butions to the retirement provision are granted until the age
of 62. The benefit from the pension plan is payable to surviving
Board of Management members at the earliest at the age of
62, irrespective of their age upon retirement. If a member of the
Board of Management retires due to disability, the benefit is
paid as a disability pension, even before the age of 62.
The Pension Capital system was used from the beginning of
2006 until the end of 2011. The pension agreements of active
Board of Management members that were valid until that
time were modified accordingly. All Board of Management
members newly appointed during that period were subject
exclusively to the Pension Capital system.
Under this system, each Board of Management member is cred-
ited with a capital component each year. This capital compo-
nent comprises an amount equal to 15% of the sum of the Board
of Management member’s fixed base salary and the total
annual bonus for the respective financial year on the balance
sheet date, multiplied by an age factor equivalent to a rate
of return of 6% until 2015 and 5% as of 2016 (Wilfried Porth: 5%
for all years). These contributions to pension plans are
granted only until the age of 60. The benefit from the pension
plan is payable in the committed amount (sum of the capital
components credited including interest) to surviving Board of
Management members at the earliest at the age of 60,
irrespective of their age upon retirement. If a member of the
Board of Management retires due to disability, the benefit
is paid as a disability pension, even before the age of 60.
Payments under the Pension Capital system and the Daimler
Pensions Plan can be made in three ways:
– as a single amount;
– in twelve annual installments, whereby interest accrues on
each partial amount from the time payments commence
until the payout is complete (Pension Capital 6% or 5%;
Daimler Pensions Plan in accordance with applicable law);
– as an annuity with annual increases (Pension Capital 3.5%
or in accordance with applicable law; Daimler Pensions Plan
in accordance with applicable law).
The contracts specify that if a Board of Management member
passes away before retiring for reason of age, the spouse/
registered civil partner or dependent children is/are entitled to
the full committed amount in the case of the Pension Capital
system, and to the credit amount reached plus an imputed
amount until the age of 62 in the case of the Daimler Pensions
Plan. If a Board of Management member passes away after
retiring for reason of age, in the case of payment of twelve
annual installments the heirs are entitled to the remaining
present value. In the case of a pension with benefits for sur-
viving dependents, the spouse/registered partner or depen-
dent children is/are entitled to 60% of the discounted terminal
value (Pension Capital), or the spouse/registered civil partner
is entitled to 60% of the actual pension (Daimler Pensions Plan).
Until the end of 2005, the pension agreements of Board of Man-
agement members included a commitment to an annual
retirement pension, calculated as a proportion of the former
base salary and depending on the number of years of service;
an analogous implementation of this commitment for the corre-
sponding hierarchical level applied to Wilfried Porth for the
period prior to his serving as a member of the Board of Man-
agement. Such pension claims remained in effect after the
conversion to the Pension Capital system but were frozen at
the level reached at the beginning of 2006.
Payments of these pension claims start upon request when the
term of service ends at or after the age of 60, or are paid as
disability pensions if the term of service ends before the age of
60 due to disability. The respective agreements provide for
3.5% annual increases starting when benefits are received (with
the exception that Wilfried Porth’s benefits are adjusted in
accordance with applicable law). The agreements include a
provision by which the spouse/registered civil partner of a
deceased Board of Management member is entitled to 60% of
that member’s pension.
That amount can increase by up to 30 percentage points
depending on the number of dependent children.
Departing Board of Management members are also provided
with a company car, in some cases for a defined period.
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 129
In the event of an early termination of the service contract,
both the short-term and the delayed medium-term component
(deferral) of the annual bonus, and the proceeds from the long-
term PPSP, are paid out not when the contract is terminated but
instead at the points in time agreed upon in the service con-
tract or in the terms and conditions of the PPSP plan.
As part of the mutually agreed early termination of the Board
of Management activities of Dr. Dieter Zetsche and Bodo Uebber
at the conclusion of the Daimler AG Annual Shareholders’
Meeting on May 22, 2019, it was agreed that the Company’s
service contract benefits would continue to be provided
until the respective service contracts expired on December 31,
2019. For the period from May 23 to December 31, 2019
Dr. Zetsche thus received a base salary of €1,244,291 and short-
term variable remuneration of €311,073 (measured as of
the end of the reporting period, to be paid in 2020) as well as
medium-term variable remuneration of €311,073 (measured
as of the end of the reporting period, to be paid in 2021 subject
to the bonus/malus rule) and fringe benefits of €142,244.
The claims from long-term variable remuneration (PPSP) and
the company pension scheme are paid out in accordance
with the respective plan conditions.
Service costs for pension obligations to Board of Management
members in accordance with IFRS amounted to €2.0 million
in financial year 2019 (2018: €2.4 million). The present value of
the total defined benefit obligation according to IFRS amounted
to €32.9 million as of December 31, 2019 (December 31, 2018:
€86.0 million). Taking age and period of service into account,
the individual entitlements, service costs and present values
are shown in the table. B.68
Early termination of service
The durations of the contracts of service of the members of
the Board of Management correspond to their terms of
appointment. E page 32 f
In the case of unilateral early termination without an important
reason, Board of Management service contracts include com-
mitments to payment of the base salary and provision of a com-
pany car until the end of the original service period at a maxi-
mum. Such persons are only entitled to payment of the annual
bonus pro rata for the period until the end of the contract of
service or of the Board of Management membership takes effect.
Entitlement to payment of the performance-related compo-
nents of remuneration with a long-term incentive effect (PPSP)
that has already been allocated is defined by the conditions of
the respective plans. To the extent that the payments described
above are subject to the provisions of the severance cap of
the German Corporate Governance Code as amended on Feb-
ruary 7, 2017, their total including fringe benefits is limited
to double the annual remuneration and may not exceed the total
remuneration for the remaining period of the service contract.
B.68
Individual entitlements, service costs and present values for members of the Board of Management
Annual pension (as regulated until
2005) as of age 60
Service cost (for pension,
pension capital and
Daimler Pensions Plan)
Present value1 of
obligations (for pension,
pension capital and
Daimler Pensions Plan)
In thousands of euros
Ola Källenius
Martin Daum
Renata Jungo Brüngger
Wilfried Porth
Markus Schäfer2
Britta Seeger
Hubertus Troska
Harald Wilhelm3
Bodo Uebber4
Dr. Dieter Zetsche
Total
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
–
–
–
–
–
–
156
156
–
–
–
–
–
–
–
–
–
275
–
1,050
156
1,481
261
257
250
244
254
251
–
292
155
–
254
248
250
244
218
–
362
886
–
–
2,004
2,422
4,062
2,971
3,738
3,261
1,655
1,290
12,130
11,270
3,114
–
1,995
1,467
6,028
5,285
134
–
18,387
–
42,023
32,856
85,954
1 The amounts of the present values are primarily due to the low level of the relevant discount rate.
2 Mr. Schäfer pro rata from May 22, 2019.
3 Mr. Wilhelm pro rata from April 1, 2019.
4 Mr Uebber pro rata until May 22, 2019.
130 B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT
For the period from May 23 to December 31, 2019, Mr. Uebber
received a base salary of €587,166, short-term variable remu-
neration of €146,792 (measured as of the end of the reporting
period, to be paid in 2020), medium-term variable remuneration
of €146,792 (measured as of the end of the reporting period,
to be paid in 2021 subject to the bonus/malus rule) and fringe
benefits of €63,818. The service cost for the pension obliga-
tions to Mr. Uebber amounted to €567,696 (€490,313 pursuant
to Section 285 No. 9a HGB) for the period from May 23 to
December 31,2019. The claims from long-term variable remu-
neration (PPSP) and the company pension scheme are also
paid out in accordance with the respective plan conditions in
this case.
Committee are paid an additional €72,000, the members of
the Presidential Committee are paid an additional €57,600 and
the members of the other committees of the Supervisory
Board (such as the Legal Affairs Committee formed in 2019)
are paid an additional €28,800; an exception is the Chairman
of the Audit Committee, who is paid an additional €144,000.
Additional payments are made for activities in a maximum
of three committees; any persons who are members of more
than three such committees receive additional payments for
the three most highly paid functions. Members of a Supervisory
Board committee are only entitled to remuneration for such
membership in a financial year if the committee has actually
convened to fulfill its duties in this period.
Sideline activities of Board of Management members
The members of the Board of Management should accept man-
agement board or supervisory board positions and/or any
other administrative or honorary functions outside the Group
only to a limited extent. Furthermore, they require the consent
of the Supervisory Board before commencing any sideline
activities. This ensures that neither the time required nor the
remuneration paid for such activities leads to any conflict
with the members’ duties to the Group. Insofar as such sideline
activities are memberships of statutory supervisory boards or
comparable boards of business enterprises, they are disclosed
in the notes to the annual financial statements of Daimler AG,
which are published on our website. In general, Board of Man-
agement members have no right to separate remuneration
for board positions held at other companies of the Group.
Loans to members of the Board of Management
In 2019, no advances or loans were made or abated to mem-
bers of the Board of Management of Daimler AG.
Payments made to former members of the Board of Man-
agement of Daimler AG and their survivors
Payments made in 2019 to former members of the Board of
Management of Daimler AG and their survivors amounted to
€19.5 million (2018: €16.2 million). Pension provisions accord-
ing to IFRS for former members of the Board of Management
and their survivors amounted to €355.8 million as of December
31, 2019 (2018: €270.2 million).
The members of the Supervisory Board and its committees
receive a meeting fee of €1,100 for each Supervisory Board
meeting and committee meeting that they attend. The meeting
fee is paid only once if several meetings of the Supervisory
Board and/or its committees are held on the same calendar day.
In connection with the remuneration adjustment in 2017, all
members of the Supervisory Board have made a self-commit-
ment to purchase Company shares in the amount of 20% of
their gross annual salary (excluding committee remuneration
and the meeting fee) every year and to hold these shares
until the end of one year after they have left the Company’s
Supervisory Board (voluntary obligation in accordance with
the “comply or explain” principle).
This does not apply to Supervisory Board members whose
Supervisory Board remuneration is subject in a mandatory or
voluntary manner to the guidelines of the German Trade Union
Confederation on the transfer of supervisory board remunera-
tion to the Hans Böckler Foundation, or to the same extent is
subject to a transfer to the employer or claim to payment due
to a service or employment contract. In the event that a lower
amount of the Supervisory Board remuneration is transferred
or credited, the voluntary commitment applies to 20% of the
amount not transferred or credited. With this voluntary com-
mitment, the members of the Supervisory Board are express-
ing their focus on and commitment to the long-term, sustain-
able success of the Company.
Remuneration of the Supervisory Board
Supervisory Board remuneration in 2019
The remuneration of the Supervisory Board is determined by the
Annual Shareholders’ Meeting of Daimler AG and is governed
by the Company’s Articles of Incorporation. The new regulations
for Supervisory Board remuneration approved by the Annual
Shareholders’ Meeting in March 2017 and effective for the
financial year beginning on January 1, 2017 specify that the
members of the Supervisory Board receive, in addition to
the refund of their expenses and the cost of any value-added
tax incurred by them in performance of their office, fixed remu-
neration of €144,000 after the conclusion of the financial year.
The Chairman of the Supervisory Board receives an additional
€288,000 and the Deputy Chairman of the Supervisory Board
receives an additional €144,000. The members of the Audit
In financial year 2019, no remuneration was paid for services
provided personally beyond the aforementioned board and
committee activities, in particular for advisory or agency ser-
vices, except for the remuneration paid to the members of
the Supervisory Board representing the employees in accor-
dance with their contracts of employment.
The individual remuneration of the members of the Supervi-
sory Board is shown in the following table. B.69
The total remuneration of all the activities of the members of
the Supervisory Board of Daimler AG in the year 2019 was thus
€4.6 million (2018: €4.2 million).
Loans to members of the Supervisory Board
No advances or loans were made or abated to members of the
Supervisory Board of Daimler AG in 2019.
B | COMBINED MANAGEMENT REPORT | REMUNERATION REPORT 131
B.69
Supervisory Board remuneration
Name
In euros
Function(s) remunerated
Dr. Manfred Bischoff1
Chairman of the Supervisory Board, the Presidential Committee and the Nomination
Committee as well as member of the Legal Affairs Committee
Michael Brecht1, 2
Dr. Paul Achleitner
Bader M. Al Saad1
Sari Baldauf1
Michael Bettag2
Dr. Clemens Börsig1
Deputy Chairman of the Supervisory Board, the Presidential Committee, the Audit
Committee and the Legal Affairs Committee
Member of the Supervisory Board and the Nomination Committee
Member of the Supervisory Board
Member of the Supervisory Board and the Nomination Committee
Member of the Supervisory Board
Member of the Supervisory Board and Chairman of the Audit Committee and the
Legal Affairs Committee
Member of the Supervisory Board and the Legal Affairs Committee
Member of the Supervisory Board and the Presidential Committee
Member of the Supervisory Board and the Audit Committee
Member of the Supervisory Board and the Audit Committee
Member of the Supervisory Board
Member of the Supervisory Board
Raymond Curry3
Michael Häberle1, 2
Dr. Jürgen Hambrecht1
Petraea Heynike1
Joe Kaeser1
Ergun Lümali1, 2
Dr. Bernd Pischetsrieder1 Member of the Supervisory Board
Elke Tönjes-Werner2
Sibylle Wankel1, 2
Dr. Frank Weber1
Marie Wieck1
Dr. Sabine Zimmer2
Roman Zitzelsberger1, 2
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board
Member of the Supervisory Board and the Legal Affairs Committee
Member of the Supervisory Board and the Legal Affairs Committee
Total in 2019
thereof remuneration
from subsidiaries
602,542
499,129
180,500
164,833
194,733
152,800
331,436
150,600
185,443
237,353
167,239
240,339
279,532
175,559
152,800
185,443
168,339
184,343
152,800
236,253
51,638
47,925
–
13,133
13,133
–
13,133
–
15,539
20,353
15,539
14,439
50,332
22,759
–
15,539
15,539
15,539
–
19,253
Member of the Supervisory Board and the Presidential Committee
1 Including remuneration as a member of the Supervisory Board of Daimler Truck AG and/or Mercedes-Benz AG.
2 The employee representatives have stated that their board remuneration is to be transferred to the Hans-Böckler Foundation,
in accordance with the guidelines of the German Trade Union Federation.
3 Mr. Curry has directed that he receive no remuneration whatsoever and that his corresponding board remuneration is to be
paid to the Hans-Böckler Foundation.
132 B | COMBINED MANAGEMENT REPORT | TAKEOVER-RELEVANT INFORMATION AND EXPLANATION
Takeover-Relevant Information and Explanation
(Report pursuant to Section 315a Subsection 1 and Section 289a Subsection 1 of the German Commercial Code (HGB))
Composition of share capital
The share capital of Daimler AG amounted to approximately
€3,070 million at December 31, 2019. It is divided into
1,069,837,447 registered shares, each of which accounts for
approximately €2.87 of equity capital. Pursuant to Section
67 Subsection 2 of the German Stock Corporation Act (AktG)
in the version of December 31, 2019, only those persons reg-
istered as shareholders in the register of shareholders are con-
sidered to be shareholders of the Company. With the exception
of treasury shares, from which the Company does not have any
rights, all shares confer equal rights to their holders. Each share
confers the right to one vote and, with the possible exception
of any new shares that are not yet entitled to a dividend, to
an equal share of the profits in accordance with the dividend
payout approved by the Annual Shareholders’ Meeting. The
rights and obligations arising from the shares are derived from
the provisions of applicable law, in particular Sections 12, 53a
ff, 118 ff and 186 of the German Stock Corporation Act. There
were no treasury shares at December 31, 2019.
Restrictions on voting rights and on the transfer of shares
The Company does not have any rights from treasury shares.
In the cases described in Section 136 of the German Stock
Corporation Act (AktG), the voting rights of treasury shares are
nullified by law.
Shares acquired by employees within the context of the employee
share program may not be disposed of until the end of the fol-
lowing year. Eligible participants in the Performance Phantom
Share Plans (PPSPs) of Executive Level 1 and eligible members
of the Board of Management are obliged by the Plans’ terms and
conditions and by the Stock Ownership Guidelines to acquire
Daimler shares with a part of their Plan income or out of their
own funds up to a defined target volume and to hold them for
the duration of their employment at the Daimler Group. For the
other persons eligible for PPSPs, this obligation no longer
applies since payment of PPSP 2013 in February/March 2017.
Provisions of applicable law and of the Articles of Incorpo-
ration concerning the appointment and dismissal of
members of the Board of Management and amendments
to the Articles of Incorporation
Members of the Board of Management are appointed and dis-
missed on the basis of Sections 84 and 85 of the German
Stock Corporation Act (AktG) and Section 31 of the German
Codetermination Act (MitbestG). In accordance with Section
84 of the German Stock Corporation Act, the members of the
Board of Management are appointed by the Supervisory Board
for a maximum period of office of five years. However, the rules
of procedure of the Supervisory Board of Daimler AG stipulate
that the initial appointment of members of the Board of Manage-
ment should generally be limited to three years. Reappoint-
ment or the extension of a period of office is permissible, in
each case for a maximum of five years.
Pursuant to Section 31 Subsection 2 of the German Codetermi-
nation Act (MitbestG), the Supervisory Board appoints the
members of the Board of Management with a majority compris-
ing at least two thirds of its members’ votes. If no such majority
is obtained, the Mediation Committee of the Supervisory Board
has to make a suggestion for the appointment within one
month of the vote by the Supervisory Board in which the
required majority was not reached. The Supervisory Board then
appoints the members of the Board of Management with a
majority of its members’ votes. If no such majority is obtained,
voting is repeated and the Chairperson of the Supervisory
Board then has two votes. The same procedure applies for dis-
missals of members of the Board of Management.
In accordance with Article 5 of the Articles of Incorporation, the
Board of Management has at least two members. The number
of members is decided by the Supervisory Board. Pursuant to
Section 84 Subsection 2 of the German Stock Corporation
Act (AktG), the Supervisory Board can appoint a member of the
Board of Management as its Chairperson. If a required mem-
ber of the Board of Management is lacking, an affected party can
apply in urgent cases for that member to be appointed by the
court pursuant to Section 85 Subsection 1 of the German Stock
Corporation Act (AktG). Pursuant to Section 84 Subsection
3 of the German Stock Corporation Act (AktG), the Supervisory
Board can revoke the appointment of a member of the Board
of Management and of the Chairperson of the Board of Manage-
ment if there is an important reason to do so. Pursuant to
Section 179 of the German Stock Corporation Act (AktG), the
Articles of Incorporation can only be amended by a resolution
of an Annual Shareholders’ Meeting. Unless otherwise required
by applicable law, resolutions of the Annual Shareholders’
Meeting – with the exception of elections – are passed pursuant
to Section 133 of the German Stock Corpo ration Act (AktG)
and Article 16 Subsection 1 of the Articles of Incorporation with
a simple majority of the votes cast and if required with a
simple majority of the share capital represented. Pursuant to
Section 179 Subsection 2 of the German Stock Corporation
Act (AktG), any amendment to the purpose of the Company
requires a 75% majority of the share capital represented at
the Shareholders’ Meeting; no use is made in the Articles of
Incorporation of the possibility to stipulate a larger majority
of the share capital.
B | COMBINED MANAGEMENT REPORT | TAKEOVER-RELEVANT INFORMATION AND EXPLANATION 133
In accordance with Article 7 Subsection 2 of the Articles of
Incorporation, amendments to the Articles of Incorporation
that only affect the wording can be decided upon by the Super-
visory Board. Pursuant to Section 181 Subsection 3 of the
German Stock Corporation Act (AktG), amendments to the Arti-
cles of Incorporation take effect upon being entered in the
Commercial Register.
Authorization of the Board of Management to issue or buy
back shares
By resolution of the Annual Shareholders’ Meeting of April 1,
2015, the Company was authorized to acquire its own shares
during the period until March 31, 2020 for all legal purposes in
a volume of up to 10% of the share capital at the time of the
resolution of the Annual Shareholders’ Meeting. The shares can
be used, under the exclusion of shareholders’ subscription
rights, for, among other things, corporate mergers and acquisi-
tions or can be sold for cash to third parties at a price that is
not significantly below the market price at the time of the sale.
The shares can also be used to service debt on con vertible
bonds and/or bonds with warrants, or can be issued to employ-
ees of the Company and employees and members of executive
bodies of affiliated companies pursuant to Section 15 ff of the
German Stock Corporation Act (AktG). The Company’s own
shares can also be canceled.
In addition, the Board of Management is authorized under other
defined circumstances and with the consent of the Supervisory
Board to exclude shareholders’ subscription rights for shares
they acquire. The Company’s own shares in a volume of up to
5% of the share capital existing at the time of the resolution of
the Annual Shareholders’ Meeting can also be acquired with
the application of derivative financial instruments (put or call
options, forwards or a combination of these financial instru-
ments), whereby the terms of the derivatives may not exceed
18 months and must be terminated on March 31, 2020, at
the latest.
No use was made of this authorization to acquire the Compa-
ny’s own shares during the reporting period.
By resolution of the Annual Shareholders’ Meeting of April 5
2018, the Board of Management was authorized with the consent
of the Supervisory Board to increase the share capital of
Daimler AG in the period until April 4, 2023, wholly or in partial
amounts, on one or several occasions, by up to €1 billion by
issuing new registered shares of no par value in exchange for
cash or non-cash contributions, and with the consent of the
Supervisory Board under certain conditions and within defined
limits to exclude shareholders’ subscription rights (Approved
Capital 2018). Subscription rights can, under these defined
conditions, be excluded in the event of a capital increase
through non-cash contributions for the purpose of an acqui-
sition, and in the case of a capital increase through cash
contributions, if the issue price of new shares is not significantly
below the market price at the time of issue.
No use has yet been made of Approved Capital 2018.
of ten years, and to grant the owners/lenders of those bonds
conversion or option rights to new, registered shares of no
par value in Daimler AG with a corresponding amount of the
share capital of up to €500 million, in accordance with the
terms and conditions of those convertible bonds or bonds with
warrants. The bonds may be issued in exchange for consider-
ation in cash, but also for consideration in kind, in particular
for interests in other companies. The respective terms and
conditions may also provide for mandatory conversion or an
obligation to exercise the option rights. The bonds can be
issued once or several times, wholly or in installments, or simul-
taneously in various tranches. They can also be issued by
companies affiliated with Daimler AG pursuant to Section 15 ff
of the German Stock Corporation Act (AktG).
Inter alia, the Board of Management was also authorized under
certain circumstances, within certain limits and with the con-
sent of the Supervisory Board, to exclude shareholders’ sub-
scription rights to the bonds. Subscription rights can, under
these defined conditions, be excluded when bonds are issued
in exchange for non-cash contributions, particularly within
the framework of a merger or acquisition, and when bonds are
issued in exchange for cash contributions, if the issue price
is not significantly below the theoretical market price of the
bonds at the time of the issue.
In order to service the debt of the convertible bonds and/or
bonds with warrants issued as a result of the authorization, the
Annual Shareholders’ Meeting of April 1, 2015 also approved
a conditional increase in the share capital of up to €500 million
(Conditional Capital 2015).
No use has yet been made of this authorization to issue con-
vertible bonds and/or bonds with warrants.
Material agreements taking effect in the event of a
change of control
Daimler AG has concluded various material agreements, as
listed below, that include clauses regulating the possible event
of a change of control, as can occur as a result of a takeover
bid:
– A non-utilized syndicated credit line for a total amount of €11
billion, which the lenders are entitled to terminate if (i)
Daimler AG becomes a subsidiary of another company, or (ii)
Daimler AG becomes controlled either individually or jointly
by one or more persons acting together. For the purposes of
the syndicated credit line, subsidiary in relation to a com-
pany means another company (i) that is controlled directly or
indirectly by the first-mentioned company, (ii) of which
more than 50% of the subscribed capital (or other equity) is
held directly or indirectly by the first-mentioned company,
or (iii) which is a subsidiary of another subsidiary of the first-
mentioned company. Control for the purposes of the syndi-
cated credit line means (i) the right to determine the affairs
of a company, (ii) the right to control the composition of
the managing board or similar bodies, or (iii) the right to con-
trol the composition of the supervisory board (if elected
by the shareholders).
By resolution of the Annual Shareholders’ Meeting held on April 1,
2015, the Board of Management, with the consent of the Super-
visory Board, is authorized to issue during the period until March
31, 2020 convertible bonds and/or bonds with warrants or a
combination of those instruments (commercial paper) in a total
nominal amount of up to €10 billion with a maximum term
– Credit agreements of Mercedes-Benz AG and Daimler Truck AG
with lenders for an amount totaling €1.2 billion, for the repay-
ment of which Daimler AG is jointly and severally liable, which
provide for a right of termination for the lenders in the event
that natural or legal persons or a group of at least two persons
acting jointly acquire control of Daimler AG. For the pur-
134 B | COMBINED MANAGEMENT REPORT | TAKEOVER-RELEVANT INFORMATION AND EXPLANATION
poses of the credit agreements, a group acting jointly exists
when a group acts jointly on the basis of formal or informal
agreements or other arrangements. Control for the purposes
of the credit agreements means (i) holding or controlling
more than 50% of the voting rights in Daimler AG, (ii) the right
to determine or appoint the majority of the members of
a decision-making body of Daimler AG (e.g. the management,
board of management, advisory board, supervisory board),
(iii) the right to receive more than 50% of the distributable divi-
dends of Daimler AG, or (iv) exercise of an otherwise com-
parable controlling influence on Daimler AG. Control can be
exercised directly or indirectly through share ownership,
contractual arrangement, fiduciary status, economic circum-
stances or otherwise, and through either a single person
or a group acting together.
– A master cooperation agreement on wide-ranging strategic
cooperation with Renault S.A., Renault-Nissan B.V. and
Nissan Motor Co., Ltd. as well as with Mitsubishi Motors Cor-
poration. In the case of a change of control of one of the
parties to the agreement, each of the other parties has the
right to terminate the agreement. A change of control as
defined by the master cooperation agreement occurs if a
third party or several third parties acting jointly acquire,
legally or economically, directly or indirectly, at least 50% of
the voting rights in the company in question or are autho-
rized to appoint a majority of the members of its managing
board. Under the master cooperation agreement, several
cooperation agreements were concluded between Daimler AG
on the one side and Renault and/or Nissan on the other,
which provide for the right of termination for a party to the
agreement in the case of a change of control of another
party. These agreements primarily concern a new architecture
for small cars, the shared use and development of fuel-effi-
cient diesel and gasoline engines and transmissions, the deve-
lopment and supply of a small urban delivery van, the deve-
lopment, production and supply of pickups, the use of an
existing architecture for compact cars, and the joint pro-
duction of Infiniti/Nissan and Mercedes-Benz compact vehi-
cles by a 50-50 joint venture in Mexico. A change of control
is deemed to occur at a threshold of 50% of the voting rights
of the company in question or upon authorization to appoint
a majority of the members of its managing board. In the case
of termination of cooperation in the area of the development
of small cars due to a change of control in the early phase of
the cooperation, the party affected by the change of control
would be obliged to bear its share of the costs of the develop-
ment of shared components even if the development were
terminated for that party; the aforementioned cooperation
agreements (with the exception of the Master Cooperation
Agreement) have been transferred from Daimler AG to
Mercedes-Benz AG.
– An agreement with BAIC Motor Co., Ltd. related to a jointly
held company for the production and distribution of cars of
the Mercedes-Benz brand in China, by which BAIC Motor Co.,
Ltd. is given the right to terminate the agreement or exercise
a put or call option in the case that a third party acquires
one third or more of the voting rights in Daimler AG.
– An agreement related to the establishment of a joint venture
with Beiqi Foton Motor Co., Ltd. for the purpose of produc-
ing and distributing heavy-duty and medium-duty trucks of
the Auman brand. This agreement gives Beiqi Foton Motor
Co., Ltd. the right of termination in the case that one of its
competitors acquires more than 25% of the equity or assets
of Daimler AG or becomes able to influence the decisions of
its Board of Management. This agreement has been trans-
ferred from Daimler AG to Daimler Truck AG in the context of
the separation of the Trucks & Buses division.
– An agreement between Daimler AG, BMW AG and Audi AG
related to the acquisition of the companies of the HERE
Group and the associated establishment of There Holding
B.V. In the event of a change of control of one of the parties
to the agreement, the agreement obligates the party in
question to offer its shares in There Holding B.V. to the other
parties to the agreement (shareholders). A change of control
of Daimler AG occurs if one person gains control over
Daimler AG, whereby control is defined as (i) having control
of more than 50% of the voting rights, (ii) being able to
control more than 50% of the voting rights eligible to vote at
the shareholders’ meetings on all or nearly all matters, or
(iii) the right to determine the majority of the members of the
Board of Management or of the Supervisory Board. A change
of control also occurs if competitors of the HERE Group or
certain possible com petitors of the HERE Group in the
technology industry acquire a shareholding of at least 25% of
Daimler AG. If none of the other parties acquire these
shares, the agreement gives them the right to dissolve There
Holding B.V.
– An agreement between Daimler AG and BMW AG, which con-
tains basic provisions for six joint ventures between
Daimler Mobility Services GmbH and group companies of
BMW AG in the field of mobility services (car sharing, ride
hailing, parking, charging, multimodal and a joint venture
holding the common brand). A change of control is defined
as the acquisition by a third party of more than 50% of the
voting rights or shares, or the conclusion of a control
agreement over Daimler AG by a third party. As a result of a
change of control, the other party may initiate a shoot-out
process, which is more precisely defined in the agreement.
– An agreement between Daimler AG and BMW AG on the
development of technologies for automated driving (Highway-
Pilot) of the second generation (as of 2024). In the event of
a change of control, either party can terminate this contract
in written form at any time without further notice and with
immediate effect. Change of control is defined as the indirect
or direct acquisition by a third party of at least 30% of the
voting rights in one of the parties. This agreement has been
transferred by Daimler AG to Mercedes-Benz AG in the con-
text of the separation of the Cars & Vans division.
– An agreement between Daimler AG and Zhejiang Geely Hold-
ing Group Co., Ltd. for the development, production, sales
and aftersales of smart-brand cars of the next generation. In
the event of a change of control, the party for which no
change of control has occurred can terminate this agreement
after a maximum of three months of fruitless negotiations
in written form and with immediate effect. Furthermore, the
party for which no change of control has occurred has the
possibility to exercise a call option or a put option vis-à-vis
the other party. Change of control is defined as the indirect
or direct acquisition by a third party of (i) more than 50% of
the voting rights in one of the parties, (ii) the right to appoint
a majority of the directors of a board or similar body of one of
the parties, or (iii) the right, either contractual or otherwise,
to manage one of the parties. This agreement has been trans-
ferred by Daimler AG to Mercedes-Benz AG in the context
of the separation of the Cars & Vans division.
B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 135
Risk and Opportunity Report
The Daimler Group is exposed to a large number of risks that
are directly linked with the business activities of Daimler AG
and its subsidiaries or which result from external influences. A
risk is understood as the danger that events, developments
or actions will prevent the Group or one of its segments from
achieving its targets. This includes financial and non-financial
risks. At the same time, it is important to identify opportunities
in order to safeguard and enhance the competitiveness of the
Daimler Group. An opportunity is understood as the possibility
due to events, developments or actions to safeguard or to
surpass the planned targets of the Group or of a segment.
In order to identify business risks and opportunities at an early
stage and to assess and manage them consequently, effec-
tive management and control systems, which are clustered into
a risk and opportunity management system, are applied. Risks
and opportunities are not offset.
B.70
Assessment of probability of occurrence/possible impact
Level
Low
Medium
High
Probability of occurrence
0% < Probability of occurrence
33% < Probability of occurrence
66% < Probability of occurrence
≤ 33%
≤ 66%
< 100%
Level
Low
Possible impact
€0 <
Medium
€500 million ≤
High
Impact
Impact
Impact
< €500 million
< €1 billion
≥ €1 billion
Risk and opportunity management system
The risk management system is intended to systematically
and continually identify, assess, control, monitor and report
risks threatening Daimler’s existence and other material risks,
in order to support the achievement of corporate targets and
to enhance risk awareness at the Group. The risk management
system is integrated into the value-based management and
planning system of the Daimler Group and is an integral part of
the overall planning, management and reporting process in
the companies, segments and corporate functions.
The opportunity management system at the Daimler Group
is based on the risk management system. The objective of
opportunity management is to recognize the possible opportu-
nities arising in business activities as a result of positive
developments at an early stage, and to use them in the best
possible way for the Group by taking appropriate measures.
By taking advantage of opportunities, planned targets should
be met or exceeded. Opportunity management considers
relevant and realizable opportunities that have not yet been
included in any planning.
In the context of the operational planning, risks and opportuni-
ties are identified and assessed with the use of appropriate
categories for a two-year planning period. Furthermore, the
discussions for the derivation of mid-term and strategic tar-
gets in the context of strategic planning also include the consid-
eration of risks and opportunities relating to a longer period.
Group Risk Management regularly reports on the identified risks
and opportunities to the Board of Management and the Super-
visory Board. Besides the reporting at specific times, risk and
opportunity management is established as a continuous task
within the Group. In addition to reporting at specific intervals,
risk and opportunity management in established at the Group
as a continuous process. There is an internal reporting obligation
within the Group for material risks arising unexpectedly.
The reporting of risks and opportunities in the Management
Report generally relates to a period of one year. Risk assessment
takes place on the basis of probability of occurrence and
possible impact according to the levels “Low,” “Medium” and
“High.” These levels also apply to the possible impact of
opportunities. An analysis of the probability of occurrence is
not considered here. When assessing the impact of a risk
or opportunity, its effect on EBIT is generally considered.
136 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT
At Group level, risks and opportunities below €500 million are
classified as “Low”, between €500 million and €1 billion as
“Medium” and above €1 billion as “High”. For the quantification
of each risk and opportunity category in the Management
Report, the individual risks and opportunities are summarized
for each category. The assessment of the dimensions, proba-
bility of occurrence and possible impact, is based on the levels
shown in table B.70 and is conducted before measures are
planned. In addition to the quantifiable risks and opportunities,
risk management also considers qualitative risks and oppor-
tunities. Qualitative risks include issues that can have a negative
impact on the public’s perception and thus on the reputation
of the Daimler Group. They primarily comprise those risks con-
nected with aspects presented in the Non-Financial Report.
Risks in connection with compliance violations are also consid-
ered in the context of risk management. In the context of
describing the risk and opportunity categories, significant
changes in comparison to the prior year are explained.
Risk management is based on the principle of completeness.
This means that at the level of the individual entities, all
identified risks enter the risk management process. The inter-
nal control system (ICS) is responsible for the monitoring of
general uncertainties without any clear indication of a possible
effect on earnings.
The scope of consolidation for risk and opportunity management
corresponds to the scope of the consolidated financial state-
ments and goes beyond that if necessary. The risks and oppor-
tunities of the segments and operating units, important
asso ciated companies, joint ventures, joint operations and the
corporate departments are included.
Furthermore, the employees responsible for risk management
include have the task of defining measures and if necessary,
initiating such measures to avoid, reduce or protect the Group
against risks. Within the context of opportunity management,
measures are to be taken with which opportunities can be
seized, improved and (fully or partially) realized. The cost-effec-
tiveness of a measure is assessed before its implementation.
The feasible impact and probability of occurrence of all risks
and opportunities of the individual entities and the related
measures that have been initiated are continually monitored.
The management activities take place at the level of the
segments based on individual risks and opportunities. As the
parent company of the Daimler Group, Daimler AG monitors
implementation by the segments as part of its duty to manage
the Group.
The internal control system with regard to the accounting
process has the objective of ensuring the correctness and
effectiveness of accounting and financial reporting. It is designed
in line with the internationally recognized framework for inter-
nal control systems of the Committee of Sponsoring Organiza-
tions of the Treadway Commission (COSO Internal Control –
Integrated Framework), is continually developed further, and
is an integral part of the accounting and financial reporting
processes in the relevant companies, organizational entities
and corporate functions. The system includes principles
and procedures as well as preventive and detective controls.
Among other things, it is regularly checked, if
– the Group’s uniform financial reporting, valuation and
accounting guidelines are continually updated and regularly
taught and adhered to;
– transactions within the Group are accounted for and prop-
erly eliminated;
– issues relevant for financial reporting and disclosure from
agreements entered into are recognized and appropriately
presented;
– processes are established to guarantee the completeness of
financial reporting;
– processes are established for the segregation of duties and
for the “four-eyes principle” in the context of preparing
financial statements, and authorization and access rules
exist for relevant IT accounting systems.
The effectiveness of the internal control system is systematically
assessed with regard to the corporate accounting process.
The first step consists of risk analysis and a definition of control
with the objective of identifying significant risks relating to
the processes of corporate accounting and financial reporting
in the main companies, organizational entities and corporate
functions. The controls required are then defined and docu-
mented in accordance with Group-wide guidelines. Random
samples are regularly tested to assess the effectiveness of the
controls. Those tests constitute the basis for self-assessment
of the appropriate magnitude and effectiveness of the controls.
The results of this self-assessment are documented and
reported in a Group-wide IT system; identified control weak-
nesses are eliminated. At the end of the annual cycle, the
selected companies, organizational entities and corporate
functions confirm the effectiveness of the internal control
system with regard to the corporate accounting process. The
Board of Management and the Audit Committee of the Super-
visory Board are regularly informed about the main control weak-
nesses and the effectiveness of the control mechanisms
installed. However, the internal control and risk management
system for the accounting process cannot ensure with absolute
certainty that materially false statements in accounting are
avoided.
The organizational embedding and monitoring of risk and
opportunity management takes place through the risk man-
agement organization established at the Group. In this context,
the companies, organizational entities and corporate functions
report on concrete risks and opportunities to the next-higher
entity at regular intervals. Through the segments, this informa-
tion is passed on to Group Risk Management, which processes
it and provides it to the Board of Management and the Super-
visory Board as well as to the Group Risk Management Commit-
tee (GRMC). The GRMC is responsible for the continual improve-
ment of the risk management system and for assessing its
efficiency and effectiveness. It is composed of representa-
tives of Accounting & Financial Reporting, the Legal Depart-
ment, Compliance and Technical Compliance, and the mem-
bers responsible for finance of the Boards of Management
of Mercedes-Benz AG, Daimler Truck AG and Daimler Mobility
AG; it is chaired by the Board of Management members of
Daimler AG responsible Finance & Controlling/Daimler Mobil-
ity and for Integrity and Legal Affairs. The Internal Auditing
department contributes material findings on the internal con-
trol and risk management system.
B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 137
Responsibility for operational risk management and for the
risk management processes lies with the segments, corporate
functions, organizational entities and companies.
Reports regarding the current risk situation and the effective-
ness, functionality and appropriateness of the internal control
and risk management system are regularly presented to the
Board of Management and to the Audit Committee of the Super-
visory Board of Daimler AG, as well as to the Boards of Man-
agement of Mercedes-Benz AG, Daimler Truck AG and Daimler
Mobility AG. Furthermore, the risks and opportunities of busi-
ness operations are regularly discussed by the responsible per-
sons in the Board of Management of the relevant company.
The Audit Committee of the Supervisory Board of Daimler AG
and the committees of the Supervisory Boards of Mercedes-
Benz AG, Daimler Truck AG and Daimler Mobility AG are respon-
sible for monitoring the internal control and risk man-
agement system. The internal auditing department monitors
whether the statutory conditions and the Group’s internal
guidelines concerning the internal control and risk management
system of the Group are adhered to. If required, measures
are initiated in cooperation with the respective management.
External auditors audit the system for the early identification
of risks which is integrated in the risk management system for
its general suitability to identify risks threatening the existence
of the Group; in addition, they report to the Supervisory Board
on any significant weaknesses that have been recognized in
the internal control and risk management system.
Risks and opportunities
The following section describes risks and opportunities that
can have a significant influence on the profitability, cash flows
and financial position of the Daimler Group. In general, the
reporting of risks and opportunities takes place in relation to the
individual segments. If no segment is explicitly mentioned, the
risks and opportunities described relate to all the segments.
Reporting on the risks and opportunities takes place in line
with the new corporate structure. As of January 1, 2020, the busi-
ness operations of the Group are managed in the segments
Mercedes-Benz Cars, Mercedes-Benz Vans, Daimler Trucks &
Buses and Daimler Mobility. These segments reflect the future
internal reporting and organizational structure. The Mercedes-
Benz Cars and Mercedes-Benz Vans segments are aggregated
in the Mercedes-Benz Cars & Vans reportable segment in line
with the type of products and services offered, their brands,
sales channels and customer profiles.
In addition to the risks and opportunities described below, risks
and opportunities that are not yet known or classified as not
material can influence profitability, cash flows and financial
position.
Industry and business risks and opportunities
The following section describes the industry and business
risks and opportunities of the Daimler Group. A quantification
of these risks and opportunities is shown in table B.71.
Economic risks and opportunities
Economic risks and opportunities constitute the framework for
the risks and opportunities listed in the following categories
and are integrated as premises into the quantification of these
risks and opportunities. Overall economic conditions have a
significant influence on vehicle sales markets and thus on the
Group’s success.
Like the majority of economic research institutes, Daimler
expects the growth of the world economy to continue in 2020
at about the rate of the previous year. At the beginning of
2020, the relationship of risks and opportunities also seems
similar to that in 2019. Economic developments in 2019 are
described in detail in the “Economic Conditions and Business
Development” section of this Management Report; growth
assumptions and forecasts for general developments in 2020
are explained in the “Outlook” section on E pages 65 ff
and 150 ff.
Although the renewed escalation of the trade conflict between
the United States and China has become less likely with the
conclusion of the “Phase One” partial trade deal, it continues to
be a significant risk for the further development of the world
economy. Furthermore, the threat by the United States to impose
additional tariffs on imported vehicles and parts, including
from the European Union, still exists. These two factors could
significantly affect the development of unit sales and earnings,
especially at Mercedes-Benz Cars & Vans. In addition, there is
a danger that countries will implement increasingly protec-
tionist measures such as specific market-access barriers or
industry-political concepts. This would have significant
impacts on the global value chains at Mercedes-Benz Cars
& Vans and Daimler Trucks and Buses, leading to higher
costs and adversely affecting business developments and
sales possibilities. On the other hand, unforeseen trade
facilitations could provide positive impulses and lead to more
trade and higher growth. In that case, the Daimler Group
could also benefit.
Even without a further escalation of the various trade conflicts,
the ongoing uncertainty could ensure that the global investment
cycle weakens even more than previously assumed. A further
slowdown in investment activity – particularly in North Amer-
ica and Europe – would adversely affect the unit sales of
heavy-duty commercial vehicles in particular and would there-
fore have a particularly negative impact on the unit sales and
profitability of Daimler Trucks & Buses.
If the recession, which has so far been limited to the industrial
sector, spreads more to the service sector and spreads even
more than before to the United States, in addition to the euro
zone and China, this would have noticeable effects on employ-
ment and wages in those regions. This would have a significant
impact on consumer confidence and consumption, one of the
most important drivers of the current economic expansion. The
resulting lower growth or even decline in overall economic
consumption would have a correspondingly negative impact on
the sales prospects of Mercedes-Benz Cars & Vans in parti-
cular. Opportunities would arise, however, if the cyclical down-
turn in the industry ended earlier than expected.
138 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT
The European market will continue to be of great importance
for all segments of the Daimler Group in the future, so changes
in investment and consumer behavior will affect the develop-
ment of unit sales in all segments. The risk of a disorderly with-
drawal of the United Kingdom from the European Union
due to the Brexit of January 31, 2020 and the related exit agree-
ment no longer exists. However, uncertainty is now likely to
shift to the negotiations on a future agreement between the UK
and the EU, which according to the transitional agreement
would have to be concluded by the end of 2020 in order to pre-
vent customs duties as of January 2021. These negotiations
are likely to be very difficult and connected with a high degree
of political uncertainty. In extreme cases, renewed distortions
in the European financial markets and corresponding decreases
in economic growth are to be expected. This would signifi-
cantly impact growth above all in the United Kingdom, with an
adverse effect on the development of the Group’s unit sales
across all segments. In the euro zone, the risk of political con-
flicts also remains increased. Phases of political uncertainty
could have a negative impact on consumption and investment
decisions by households and companies. On the other hand,
if there is concerted fiscal stimulus in the euro zone or if the
ECB’s expansionary measures have a greater impact than
currently assumed, this could lead to a stronger recovery in
growth, with positive effects on companies and households.
In the United States, political uncertainty in the run-up to the
presidential elections and ongoing trade tensions could lead to
a more pronounced reduction in corporate investment than
previously assumed. This would have a particularly negative
effect on the unit sales of the Daimler Trucks & Buses seg-
ment. If, as already mentioned, the overall economic growth
slowdown were to be more pronounced than previously
expected, consumption by private households would also suf-
fer significantly due to negative employment and income
effects. This in turn could have a negative impact on the unit
sales of Mercedes-Benz Cars & Vans. On the opportunities
side, economic and fiscal policy in the run-up to the presidential
election could turn out to be more expansive than previously
assumed. In addition, the US central bank could further reduce
key interest rates, contrary to current expectations. If invest-
ment activity should subsequently become significantly more
dynamic, resulting in stronger growth combined with positive
employment and income effects, demand could benefit in all
automotive segments. As Mercedes-Benz Cars & Vans,
Daimler Trucks & Buses and Daimler Mobility generate substan-
tial proportions of their revenues in the United States, these
developments would have considerable consequences for the
Group’s success. Furthermore, stronger economic growth in
the United States would also have spillover effects on the rest
of the world.
B.71
Industry and business risks and opportunities
In general, public and private debt remains high in many econ-
omies. In the event of a more pronounced economic downturn,
this could limit the scope for governments to take fiscal coun-
termeasures or lead to increased defaults by companies and
households. This would lead to increased instability in the finan-
cial markets and also adversely affect overall economic demand,
with negative effects on the unit sales of the Daimler Group’s
segments.
From an economic perspective, the high indebtedness of Chi-
nese companies, especially state-owned enterprises, also
represents a considerable risk. If the government’s efforts to
restrict credit growth in combination with the negative impact
of US tariffs on imports from China lead to a more significant
growth slowdown than currently expected, this could result in
an excessive increase in credit defaults, which would then lead
to turbulences in the banking sector and the financial markets.
In particular at the Mercedes-Benz Cars & Vans segment, for
which China is now one of the biggest sales markets, the afore-
mentioned risks could result in significant negative effects on
unit sales. On the other hand, growth in 2020 triggered by
further stimulus measures by the Chinese government could turn
out to be stronger than expected. The resulting stronger growth
in overall economic consumption would offer additional oppor-
tunities, especially for Mercedes-Benz Cars & Vans.
The outbreak of the coronavirus may result in macroeco-
nomic risks that could lead to significant reductions in eco-
nomic growth in China, other Asian economies and also
worldwide. Risks for the Daimler Group may not only affect
the development of unit sales, but may also lead to significant
adverse effects on production, the procurement market and
the supply chain.
Another risk is that the pressure on the emerging markets
could intensify further if underlying sentiment in the financial
markets deteriorates significantly. In such a case, even more
capital would flow out of the emerging markets. Growth in the
emerging markets would then be significantly weaker and
put pressure on global growth. Furthermore, changes in central-
bank policy in the developed and emerging markets to support
economic development (such as currency devaluation) entail a
high risk. Although the risk of a debt crisis in the emerging
markets – triggered by US interest-rate rises and the resulting
higher interest burden due to the predominance of US dollar
debt – has recently been reduced by the US Federal Reserve’s
shift to a looser monetary policy, it has not been fully resolved.
Possible crises in individual countries would have a noticeable
impact on sales prospects in those markets and possible also
on conditions for the Group’s local operations.
Risk category
General market risks
Risks relating to the legal
and political framework
Procurement market risks
Probability of occurrence
Impact
Opportunity category
Low
Medium
Medium
High
High
High
General market opportunities
Opportunities relating to the legal
and political framework
Procurement market opportunities
Impact
Medium
Medium
Medium
B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 139
Although oil prices fell significantly last year, if political crises –
especially in the Middle East – and ensuing temporary supply
bottlenecks lead to a significant rise in oil prices that OPEC
countries are unable to offset in the short term, inflation
could rise significantly and adversely affect global growth. More-
over, an escalation of geopolitical conflicts in other regions
of the world could also significantly slow down global economic
growth.
General market risks and opportunities
The risks and opportunities for the economic development of
automotive markets are strongly affected by the cyclical situa-
tion of the global economy as described above. The assessment
of market risks and opportunities is linked to assumptions
and forecasts about the overall development of markets in the
regions in which the Daimler Group is active. The possibility
of markets developing better or worse than assumed in the plan-
ning, or of changing market conditions, generally exists for all
segments of the Daimler Group.
Potential effects of the risks on the development of unit
sales are included in risk scenarios. Increasing customer
demand for model series with lower profit margins can have
a negative impact on the earnings of the segments concerned.
Causes of declining vehicle sales may result in particular from
the partially unstable economic environment and in the context
of political or economic uncertainties. A rising oil price and
volatile exchange rates can also lead to market uncertainty and
thus to falling demand. Differences between the segments
exist due to the partly varying regional focus of their activities.
The development of markets, unit sales and inventories is
continually analyzed and monitored by the segments; if neces-
sary, specific marketing and sales programs are implemented.
Volatilities with regard to market developments can also lead to
the overall market or regional conditions for the automotive
industry developing better than assumed in the internal fore-
casts and premises, and business opportunities in the market.
Opportunities may also arise from an improvement in the com-
petitive situation or a positive development of demand for
the segments, utilization of which is supported by sales and
marketing campaigns.
Due to the partly difficult financial situation of some dealerships
and vehicle importers, support actions might become nec-
essary to ensure the performance of the business partners. The
financial situation of strategically relevant dealerships and
vehicle importers is continuously monitored; if necessary, alter-
native sales channels are created. Further risks result from
the dependency on certain dealerships, so in certain circum-
stances, relationships with new business partners may have
to be developed. The loss of important dealerships and vehicle
importers can lead to customer demand not being fully served
and lower unit sales. Risks of this kind exist for dealerships and
vehicle importers of Mercedes-Benz Cars & Vans and Daimler
Trucks & Buses.
The launch of new products by competitors, more aggressive
pricing policies and poorer price enforcement in the aftersales
business can lead to increasing competitive and price pres-
sure in the automotive segments. Continuous monitoring of
competitors is carried out in order to recognize these risks
at an early stage. Depending on the situation, product-specific
and possibly regionally different measures are taken to sup-
port weaker markets. Daimler also applies various programs to
boost sales, which include financial incentives for customers.
In connection with the sale of vehicles, Daimler offers its cus-
tomers a wide range of financing and leasing options. The
resulting risks for the Daimler Mobility segment are mainly due
to borrowers’ worsening creditworthiness, so receivables
might not be recoverable in whole or in part because of cus-
tomers’ insolvency (default or credit risk). Daimler counter-
acts credit risks by means of creditworthiness checks on the
basis of standardized scoring and rating methods, the collat-
eralization of receivables, as well as an effective risk manage-
ment with a firm focus on monitoring both internal and macro-
economic leading indicators.
In connection with leasing agreements, risks and opportunities
arise if the market value of a leased vehicle at the end of the
agreement term differs from the residual value originally calcu-
lated and forecasted at the time the agreement was con-
cluded and used as a basis for the leasing installments. A resid-
ual-value risk arises if the expected market value of a vehicle
at the end of the contract term is lower than the residual value
calculated and forecasted when the contract was concluded.
Particularly at Mercedes-Benz Cars & Vans and Daimler Mobility,
risks therefore result from the development of the used car
markets and thus from the residual values of the vehicles pro-
duced. Above all, the existing uncertainties in connection
with diesel vehicles can have a negative impact on residual val-
ues. As part of the established residual-value management
process, certain assumptions are made at local and corporate
levels regarding the expected level of prices, based upon
which the cars to be returned in the leasing business are evalu-
ated. If changing market developments lead to a negative
deviation from assumptions, there is a risk of lower residual
values of used cars. This can adversely affect the proceeds
from the sale of used cars. Appropriate measures are defined
to counteract these risks. Depending on the region and the
current market situation, the measures taken generally include
continuous market monitoring as well as, if required, price-
setting strategies or sales promotion measures designed to
regulate vehicle inventories. The quality of market forecasts
is verified by periodic comparisons of internal and external
sources, and, if required, the determination of residual
values is adjusted and further developed with regard to methods,
processes and systems. On the other hand, opportunities can
arise from a positive development of residual values caused by
a favorable market environment for used vehicles as well as
lower price reductions granted on new vehicles.
140 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT
In addition, a residual-value risk from non-Daimler vehicles
exists for the Daimler Mobility companies that operate com-
mercial fleet management and leasing management, because
most of those vehicles are not covered by manufacturers’
residual-value guarantees. The negative development of sale
prices for used cars on stock can adversely affect earnings.
Residual-value risk is taken into account through a high level of
diversification with regard to brands, regions, customers and
lease periods. Used vehicle prices are continually monitored
both locally and centrally, so that the residual-value risk from
a drop in market prices can be forecasted in good time and suit-
able countermeasures may be initiated.
Mercedes-Benz Cars & Vans faces risks with respect to regu-
lations on mandatory targets for the average fleet fuel con-
sumption and CO2 emissions of new vehicles. Especially in the
markets of China, Europe and the United States Daimler gives
these targets due consideration in its product planning. The
increasingly ambitious targets require significant proportions
of actual unit sales of plug-in hybrids or cars with other types
of electric drive. The ambitious statutory requirements will
be difficult to fulfill in some countries. The market success of
these drive systems is greatly influenced not only by customer
acceptance but also by regional market conditions, like for exam-
ple the battery-charging infrastructure and state support.
Across all segments, the assessment of general market risks is
unchanged compared to the previous year. However, due to
increasing political and economic uncertainty, the impact of mar-
ket opportunities has increased from “Low” to “Medium”
due to a potential increase in demand in the automotive seg-
ments. The risks and opportunities shown in the previous
year under “Risks and opportunities relating to the leasing and
sales-financing business” have been integrated into the sec-
tion “General market risks and opportunities” for the current
financial year.
Risks and opportunities related to the legal and political
framework
The automotive industry is subject to extensive governmental
regulation worldwide. Risks and opportunities from the legal
and political framework have a considerable impact on Daimler’s
future business success. Regulations concerning vehicles’
emissions, fuel consumption, safety and certification, as well
as tariff aspects, play a particularly important role. Complying
with these varied and often diverging regulations all over the
world requires strenuous efforts on the part of the automotive
industry. In the future, Daimler expects to spend an even larger
proportion of its research and development budget to ensure
compliance with these regulations. The possible impact and prob-
ability of occurrence of risks from the legal and political frame-
work is unchanged compared to the previous year. However, the
assessment of the possible impact of the opportunities has
increased from “Low” to “Medium”.
Many countries and regions have already implemented stricter
regulations to reduce vehicles’ emissions and fuel con-
sumption or are currently preparing such laws. For example,
they relate to the environmental impact of vehicles, including
emission levels, fuel economy and noise, as well as pollutants
from the emissions caused by production facilities. Noncom-
pliance with regulations applicable in the various regions might
result in significant penalties and reputational harm. In case
of violations of regulations concerning vehicles’ environmental
compatibility, it might even mean that vehicles could not or
could no longer be registered in the relevant markets. In addi-
tion, the risk exists that vehicles already in the markets will
have to be rectified. The cost of compliance with these regula-
tions is significant, especially for conventional engines, and
Daimler expects a further increase in costs in this context.
As the negative headlines on diesel engines and the implemen-
tation of driving bans on diesel vehicles unsettle customers, this
can result in lasting shifts in the drive-system portfolio (fewer
diesel and more gasoline engines). This would require additional
cost-intensive development and production measures in order
to meet the CO2 fleet limits applicable as of 2020.
The EU Commission is still revising, and amending or supple-
menting, the framework conditions for the WLTP measurement
method, which has been applicable since September 2018.
This may result in increased and additional WLTP testing and
documentation costs.
Due to a procedural error in the legislation, the Court of the
European Union has at first instance annulled parts of the Real
Driving Emissions (RDE) legislation and has given the legisla-
tors 12 months from the date of the decision on the appeal to
amend the contested parts of the regulation. If the appeal
against the ruling is unsuccessful, the new regulation could pose
significant risks to the eligibility of vehicles for registration,
also of the Daimler Group. In the worst case, the new vehicles
concerned, also of the Daimler Group, would no longer be
allowed to be registered and operated throughout the EU. In
parallel with these proceedings, a solution acceptable to all
sides is being sought in the political process (trilogue).
Strict regulations for the reduction of vehicles’ emissions and
fuel consumption also create potential risks for Daimler
Trucks & Buses, because it will be difficult to fulfill the statu-
tory requirements in some countries. Above all this applies
to the markets of Japan, the United States, China and Europe.
The European Commission has developed a method for deter-
mining the CO2 emissions of heavy commercial vehicles, named
VECTO, the application of which has been mandatory for the
most important vehicle categories since January 1, 2019. The
prescribed level of CO2 reduction in Europe of 15% by 2025
and 30% by 2030, in each case compared to the new-vehicle
fleet in the period of July 2019 to June 2020, cannot be achieved
with conventional technology alone. Daimler Trucks & Buses
will therefore have to apply the latest technologies in order to
fulfill these requirements. Achieving the 2025 target will
require significant shares of battery-electric trucks or other
electrified drive systems in the actual market, which may
only be achievable at higher costs.
B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 141
The position of the Daimler Group in key foreign markets could
also be affected by an increase in or changes in free-trade
agreements. If free-trade agreements are concluded without
the participation of countries in which Daimler has production
facilities, this could result in a competitive disadvantage for
Daimler compared with competitors that produce in those
countries that participate in the free-trade agreements. In addi-
tion, if the content of the free-trade agreements currently
used by Daimler is made significantly stricter, this could also
significantly impair the position of the Daimler Group, as the
Group could no longer benefit from those free-trade agree-
ments. At the same time, however, the conclusion of new free-
trade agreements could also result in opportunities for the
Daimler Group vis-à-vis its competitors, if the competitors do
not produce in the countries concerned, but Daimler does.
The danger exists that individual countries will attempt to
defend and improve their competitiveness in the world’s markets
by resorting to interventionist and protectionist measures.
Furthermore, interruptions in the supply chain due to potential
trade conflicts cannot be ruled out. Industrial policy mea-
sures are intended to attract investment into a country and
increase local value added along the entire value chain. This
can lead to increased costs if production facilities have to be
established or expanded or local purchasing has to be
increased. In addition, attempts are being made to limit growth
in imports through barriers to market access such as by
making certification processes more difficult, delaying certifica-
tion and imposing other complicated customs procedures.
These measures generally exacerbate uncertainties in the plan-
ning process; they can also lead to lower unit sales if importing
is made more difficult.
Procurement market risks and opportunities
Procurement market risks arise for the automotive divisions
in particular from fluctuations in prices of raw materials and
energy. There are also risks of financial bottlenecks of suppli-
ers, and of capacity bottlenecks caused by supplier delivery fail-
ures or by insufficient utilization of production capacities at
suppliers. Potential claims from suppliers due to the premature
termination of development and production agreements by
the Daimler Group may also lead to decreased earnings. This
risk situation has not changed in terms of probability of occur-
rence and possible impact compared to the previous year. The
impact of the opportunities is also unchanged.
The automotive segments of the Daimler Group require certain
raw materials for the manufacture of vehicle components and
vehicles, which are purchased on the world market. The level of
costs depends on the price development of raw materials.
Due to largely unchanged macroeconomic conditions, price fluc-
tuations are expected with uncertain and inconsistent trends
also for the year 2020. For example, raw-material markets can
be impacted by political crises and uncertainties – combined
with possible supply bottlenecks – as well volatile demand for
specific raw materials. Potential tariff increases for certain
raw materials as a result of increasing protectionist tendencies
worldwide can have a negative impact on price developments.
In general, the ability to pass on the higher costs of commodities
and other materials in form of higher prices for manufactured
vehicles is limited because of strong competitive pressure in the
international automotive markets. Rising raw-material prices
may therefore have a negative impact on the margins on the
vehicles sold and thus lead to lower earnings in the respective
segment.
In addition to the described emission and fuel-consumption
regulations, traffic-policy restrictions for the reduction
of traffic jams, noise and emissions are becoming increasingly
important in cities and urban areas worldwide. This develop-
ment can have a dampening effect on the development of unit
sales, especially in growth markets. Pressure to reduce per-
sonal transport is increasingly being applied in European cities
through discussions of bans on vehicles entering or driving in
inner cities, especially those with diesel engines. These devel-
opments may dampen the development of unit sales, espe-
cially in the growth markets. In European cities, discussions
about driving bans are increasingly intensifying the pressure
to reduce individual transport, especially for vehicles with diesel
engines. This may in turn lead to more demand for vehicles
with alternative drive systems.
The financial situation of some suppliers remains tense due to
the gloomy market environment. The resulting possible pro-
duction losses at suppliers may cause an interruption in the
supply chain of the Daimler Group’s automotive segments
and prevent vehicles from being completed and delivered to
customers on time. In order to counteract such interruptions
in the supply chain, support measures may be necessary to
ensure production and sales by suppliers. Supplier risk man-
agement aims to identify potential financial bottlenecks for
suppliers at an early stage and to initiate suitable counter-
measures. Specifically, depending on the warning signals
recorded and the internal classification, regular reporting dates
are agreed upon for suppliers at which key performance indi-
cators are reported to Daimler and any support measures can
be determined if necessary.
Daimler continuously monitors the development of statutory and
political conditions and attempts to anticipate foreseeable
requirements and long-term targets at an early stage in the pro-
cess of product development. The great challenge of the com-
ing years will be to offer an appropriate range of drive systems
and the right product portfolio in each market.
Due to the planned electrification of new model series and a
shift in customer demand from diesel to gasoline engines,
Mercedes-Benz Cars & Vans in particular is faced with the risk
that Daimler will require changed volumes of components
from suppliers. This could result in over- or under-utilization
of production capacities for certain suppliers. If suppliers
cannot cover their fixed costs, there is the risk that they may
demand compensation payments. Necessary capacity expan-
sion at suppliers’ plants could also require cost-effective par-
ticipation.
142 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT
In principle, there is a danger that reduced plant availability or
the failure of production equipment or production plants
may cause internal bottlenecks that would consequently gener-
ate costs. These risks mainly exist for Mercedes-Benz Cars
& Vans. The production equipment is continuously maintained
and modernized. As a precaution, spare parts are held avail-
able or, if required, redundant machines are purchased for the
production plants that might be at risk.
Capacity restrictions in the production of batteries, interrup-
tions in the supply chain and possible interruptions in supply
by energy providers can lead to bottlenecks, especially at
Mercedes-Benz Cars & Vans. Restrictions on certain equipment
components in new vehicle models and the lack of availability
of vehicle parts at the right time also mean that vehicles cannot
be handed over to customers as planned. In order to avoid
such bottleneck situations, importance is placed upon being
able to compensate for capacity constraints through forward
planning. In addition, supply chains and the availability and qual-
ity of products are continuously monitored within the context
of managing the entire value chain. Supplier management is
undertaken for the prevention of risks with the aim of ensuring
the quantity and quality of the components required to
manufacture the vehicles. The lack of availability and quality
problems with certain vehicle parts can lead to production
downtimes and cause costs.
Warranty and goodwill cases could arise in the Daimler
Group if the quality of the products does not meet the require-
ments, regulations are not fully complied with, or support
cannot be provided in the required form in connection with prod-
uct problems and product care. Quality problems both with
components in vehicles from external suppliers and in connec-
tion with technical innovations in vehicles may require adjust-
ments that can lead to considerable expenses. Possible claims
in connection with such risks are examined and, if necessary,
the appropriate measures are initiated for the affected products.
If the high technical quality standards of purchased compo-
nents are not fulfilled, this can lead to Daimler asserting claims
against the respective supplier.
The probability of occurrence and possible impact of production
and technology risks are unchanged compared to the previous
year across all segments.
Company-specific risks and opportunities
The following section describes the company-specific risks
and opportunities of the Daimler Group. A quantification of
these risks and opportunities is shown in table B.72.
Production and technology risks and opportunities
Key success factors for achieving the desired level of prices for
the products of the Daimler Group – and hence for the achieve-
ment of corporate targets – are brand image, design and quality,
and thus the acceptance of products by customers, as well
as technical features based on innovative research and develop-
ment. Technical solutions, for example support accident-free
driving or further improve the products’ fuel consumption and
emissions, such as hybrid or electric vehicles, are of key
importance for safe and sustainable mobility. Innovations and
technology opportunities for the progressive and future-
oriented design of the product range are integrated in the
strategic product planning of the automotive segments.
As a result of increasing technical complexity, the continually
rising extent of requirements in terms of emissions, fuel con-
sumption and safety, as well as meeting and steadily raising
the Daimler Group’s quality standards, production and tech-
nology risks exist for product launches and manufacturing in
the automotive segments.
In the context of product launches, the required parts and
equipment components have to be available. To avoid restrictions
in this context, the related processes are continuously evalu-
ated and improved. In order to secure and enhance the long-term
future viability of production facilities, modernization, expan-
sion, construction and restructuring measures are carried out
as required. The execution of modernization activities and
the launch of new products are generally connected with high
investments. For example, delays in the ramp-up phase of an
innovation or during a product’s lifecycle can lead to inefficien-
cies in the production process and as a consequence to a
temporary reduction in production volumes. Late design changes
in the development process, for example in connection with
new regulatory requirements, as well as quality or availability
problems of supplied vehicle components can have a negative
impact on production ramp-ups. Furthermore, the planned
increase in battery production due to the increasing electrifica-
tion of the vehicle fleet means that initial problems during
the production of the various battery types and possible tech-
nical limitations on battery lifecycles cannot be ruled out.
Affected are those automotive segments which are currently
launching a new product or have planned a related production
ramp-up. In this context, it is also necessary to consider depen-
dencies on contractual and cooperation partners, as well
as possible changes in regional conditions, which have to be
included in the local decision-making process.
B.72
Company-specific risks and opportunities
Risk category
Probability of occurrence
Impact
Opportunity category
Production and technology risks
Information technology risks
Personnel risks
Low
Low
Medium
Risks related to equity investments and
cooperations
Low
High
High
Production and technology opportunities
Information technology opportunities
Medium
Personnel opportunities
Medium
Opportunities related to equity investments and
cooperations
Low
Impact
Low
–
–
B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 143
Information technology risks and opportunities
The systematically pursued digitization strategy enables
Daimler to utilize new opportunities to increase customer ben-
efit and the value of the company. Nonetheless, the high
penetration of information technology (IT) in all segments also
brings risks for their business and production processes, as
well as for their services and products.
The ever-growing threat from cybercrime and the spread of
aggressive malicious code brings risks that can affect the
availability, integrity and confidentiality of information and IT-
supported operating resources. Despite extensive precau-
tions, in the worst-case scenario, this can lead to a temporary
interruption of IT-supported business processes with severe
negative effects on the Group’s earnings. In addition, the loss
or misuse of sensitive data may under certain circumstances
lead to a loss of reputation. In particular, stricter regulatory
requirements such as the EU Data Protection Directive may,
among other things, give rise to claims by third parties and result
in costly regulatory requirements and penalties with an impact
on earnings.
It is essential for the globally active Daimler Group and its wide-
ranging business and production processes that information
is available and can be exchanged in an up-to-date, complete
and correct form. The framework for IT security is based on
international standards such as ISO/IEC 2700x and the NIST
Cybersecurity Framework, and its protective measures also
apply industry standards and best practice. Appropriately secure
IT systems and a reliable IT infrastructure must be used to
protect information. Cyber threats must be identified over the
entire lifecycle of applications and IT systems, and dealt with
in line with their seriousness. Particular attention is paid to risks
that could result in the interruption of business processes
due to the failure of IT systems or which could cause the loss
or corruption of data. The advancing digitization and connec-
tivity of production equipment is accompanied by coordinated
technical and organizational security measures.
Due to growing requirements concerning the confidentiality,
integrity and availability of data, Daimler has implemented vari-
ous preventive and corrective measures so that the related
risks are minimized and possible damage is limited. For exam-
ple, the Group reduces potential interruptions of operating
processes in data centers by means of mirrored data sets,
decentralized data storage, outsourced data backups and
IT systems designed for high availability. Emergency plans are
developed and employees are trained and regularly sensitized
in order to maintain operating capability. Specific threats are
analyzed and countermeasures are coordinated at a globally
active Cyber Intelligence & Response Center. The protection of
products and services at the risk of by hacking and cybercrime
is continually developed.
The possible impact and probability of occurrence of informa-
tion-technology risks are unchanged compared to the previous
year.
Personnel risks and opportunities
Competition for highly qualified staff and management is still
very intense in the industry and the regions in which Daimler
operates. The future success of the Daimler Group also depends
on the extent to which it succeeds over the long term in recruit-
ing, integrating and retaining specialist employees. The estab-
lished human resources instruments take such personnel risks
into consideration. One focus of human resources management
is the targeted personnel development and further training
of the workforce. Employees benefit for example from a range
of courses offered by the Daimler Corporate Academy and
from transparency in the context of performance management.
In order to remain successful as a company, management
culture and principles are being further developed in a Group-
wide project.
Due to demographic developments, the Group has to cope with
changes relating to an aging workforce and has to secure a
sufficient number of qualified young persons with the potential
to become the next generation of highly skilled specialists
and executives. This is addressed by measures taken in the
area of generation management that do justice to the scope
of the issue.
We counter economic, market and competitive fluctuations with
the established time and flexibility instruments to enable us
to react appropriately to the situation. In order to achieve the
long-term reduction in personnel costs necessary for the
transformation, Daimler’s management and the General Works
Council have concluded an agreement which includes a staff-
reduction program. As this is based on an agreement that is vol-
untary for both parties, there is a risk that its implementation
may not be able to take place to the full extent planned.
Personnel risks have increased from “Low” to “Medium” due to
the upcoming negotiations on collective bargaining conditions
in the metal and electrical industries in Germany and the asso-
ciated potential production losses. The probability of occur-
rence of personnel risks is currently assessed as unchanged
compared with the previous year.
Risks and opportunities related to equity investments and
cooperations
Cooperation with partners in associated companies and joint
ventures is of key importance to Daimler. Along with ensuring
better access to growth markets and new technologies, these
shareholdings help to utilize synergies and improve cost struc-
tures in order to successfully respond to the competitive situa-
tion in the automotive industry. Through investments in start-
ups, Daimler promotes innovative approaches in many areas of
the Group.
The Daimler Group generally participates in the risks and oppor-
tunities of associated companies and joint ventures in line
with its equity interest, and is also subject to share-price risks
and opportunities if such companies are listed on a stock
exchange.
The remeasurement of an associated company or joint venture
in relation to its carrying value can lead to risks and opportuni-
ties for the segment to which it is allocated. Furthermore, the
business activities of an associated company, joint venture
or joint operation, or the disposal or acquisition of an interest
in such an entity, can result in financial obligations or an addi-
tional financing requirement, but can also result in potential
opportunities, in connection with mobility services for exam-
ple. Such risks also exist with investments in startups and in the
context of the restructuring of companies in which a minority
interest is held. Risks from associated companies and joint ven-
tures exist at Mercedes-Benz Cars & Vans, Daimler Trucks
& Buses and Daimler Mobility, as well as at the associated com-
panies and joint ventures directly allocated to the Group.
144 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT
The associated companies and joint ventures are subject to a
monitoring process so that, if required, decisions can be made
on whether or not measures can be promptly taken to support
or ensure their profitability. The recoverable value of investments
is also regularly monitored.
process, Daimler regularly assesses these risks by considering
changes in key economic indicators and market information.
Pension plan assets to cover retirement and healthcare benefits
(market-sensitive investments including equities and interest-
bearing securities) are not included in the following analysis.
The overall assessment of risks and opportunities related to
equity investments and cooperations is unchanged compared
with the previous year.
Financial risks and opportunities
The following section deals with the financial risks and oppor-
tunities of the Daimler Group. Risks and opportunities can
have negative or positive effects on the profitability, cash flows
and financial position of the Daimler Group. The probability
of occurrence and possible impact of these risks and opportu-
nities is presented in table B.73. The probability of occur-
rence and impact of the financial risks and opportunities are
essentially unchanged from the previous year. Only the impact
of country risks has increased from “Low” to “Medium” and
the probability of occurrence of risks from changes in credit
ratings has increased from “Low” to “Medium”.
In principle, the Group’s operating and financial risk exposures
underlying its financial risks and opportunities can be divided
into symmetrical and asymmetrical risk and opportunity profiles.
With the symmetrical risk and opportunity profiles (e.g. cur-
rency exposures), risks and opportunities exist equally, while
with the asymmetrical risk and opportunity profiles (e.g. credit
and country exposures), the risks outweigh the opportunities.
Daimler is generally exposed to risks and opportunities from
changes in market prices such as currency exchange rates,
interest rates and commodity prices. Market price changes can
have a negative or positive influence on the Group’s profit-
ability, cash flows and financial position. Daimler systematically
manages and monitors market price risks and opportunities
primarily in the context of its operational business and financing
activities, and applies derivative financial instruments for
hedging purposes where needed, thus limiting both market price
risks and opportunities.
In addition, the Group is exposed to credit-, country- and liquid-
ity-related risks, risks of restricted access to capital markets,
risks of early credit repayment requirements and risks from
changes in credit ratings. As part of the risk management
Exchange rate risks and opportunities
The Daimler Group’s global orientation means that its business
operations and financial transactions are connected with risks
and opportunities related to fluctuations in currency exchange
rates. This applies in particular to fluctuations of the euro
against the US dollar, Chinese renminbi, British pound and other
currencies such as those of growth markets. An exchange
rate risk or opportunity arises in business operations primarily
when revenue is generated in a currency different from that
of the related costs (transaction risk). This applies in particular
to Mercedes-Benz Cars & Vans. A major portion of its revenue
is generated in foreign currencies while most of its production
costs are denominated in euros. Daimler Trucks & Buses is
also exposed to such transaction risks, but to a lesser degree
because of its worldwide production network. Regularly
updated currency risk exposures are successively hedged with
suitable financial instruments (predominantly currency for-
wards and options) in accordance with exchange rate expecta-
tions, which are continually reviewed, whereby both risks
and opportunities are limited. Any overcollateralization caused
by changes in exposure is generally reversed by suitable
measures without delay. Exchange rate risks and opportunities
also exist in connection with the translation into euros of the
net assets, revenues and expenses of the companies of the
Group outside the euro zone (translation risk); these risks are
not generally hedged.
Interest rate risks and opportunities
Changes in interest rates can create risks and opportunities for
business operations as well as for financial transactions.
Daimler employs a variety of interest-rate sensitive financial
instruments to manage the cash requirements of its business
operations on a day-to-day basis. Most of these financial instru-
ments are held in connection with the financial services busi-
ness of Daimler Mobility. Interest rate risks and opportunities
arise when fixed-interest periods are not congruent between
the asset and liability sides of the balance sheet. By means of
refinancing coordinated with the terms of the financing agree-
ments, the risk of maturity mismatch is minimized from both
an interest-rate and a liquidity perspective. Remaining inter-
est-rate risks are managed with the use of derivative financial
instruments. The funding activities of the industrial business
B.73
Financial risks and opportunities
Risk category
Exchange rate risks
Interest rate risks
Commodity price risks
Credit risks
Country risks
Risks of restricted
capital-market access
Risks of credit
repayment requirements
Low
Low
Low
Low
Low
Low
Low
Probability of occurrence
Impact
Opportunity category
High
Low
Low
Low
Exchange rate opportunities
Interest rate opportunities
Commodity price opportunities
Credit opportunities
Medium
Country opportunities
Opportunities of restricted
capital-market access
Opportunities of credit
repayment requirements
High
Low
Low
High
Impact
High
Low
Low
–
–
–
–
Risks from changes in credit ratings
Risks related to pension plans
Medium
Low
Opportunities from changes in credit ratings
Low
Opportunities relating to pension plans
High
B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 145
and the financial services business are coordinated at Group
level. Derivative interest rate instruments such as interest rate
swaps are used to achieve the desired interest rate maturities
and asset/liability structures (asset and liability management).
Commodity price risks and opportunities
Daimler is exposed to risks arising from changes in prices
of raw materials in connection with the purchase of production
materials. A small proportion of the raw-material price risks,
primarily from the planned purchase of certain metals, is reduced
through the use of derivative financial instruments.
Credit risks
Credit risk describes the risk of financial loss resulting from a
counterparty failing to meet its contractual payment obliga-
tions. Credit risk includes both the direct risk of default and
the risk of a deterioration in creditworthiness, as well as
concentration risks.
The Group is exposed to credit risks which result primarily from
its financial services activities and from the operations of its
vehicle business. The risks from leasing and sales financing are
dealt with in the “General market risks and opportunities”
section.
Credit risks also arise from the Group’s liquid assets. Should
defaults occur, this would adversely affect the Group’s financial
position, cash flows and profitability. The limit methodology
for liquid funds deposited with financial institutions has been
continuously further developed in recent years. In connection
with investment decisions, priority is placed on the borrowers’
very high creditworthiness and on balanced risk diversifica-
tion. Most liquid assets are held in investments with an exter-
nal rating of “A” or better.
Country risks
Country risk describes the risk of financial loss resulting from
changes in political, economic, legal or social conditions in the
respective country, for example due to sovereign measures
such as expropriation or a ban on currency transfers. Daimler
is exposed to country risks that primarily result from cross-
border financing or collateralization for Group companies or
customers, from investments in subsidiaries and joint ven-
tures, and from cross-border trade receivables. Country risks
also arise from cross-border cash deposits with financial
institutions. The Group addresses these risks by setting country
limits (e.g. for hard-currency portfolios of Daimler Mobility
companies) and through investment-protection insurance against
political risks in high-risk countries. Daimler also has an inter-
nal rating system that divides all countries in which it operates
into risk categories. The possible impact of country risks
has risen due to the increase in cross-border exposure and a
changed risk situation in various countries.
Risks of restricted access to capital markets
Liquidity risks arise when a company is unable to fully meet its
financial obligations. In the normal course of business, Daimler
uses bonds, commercial paper and securitized transactions, as
well as bank loans in various currencies, primarily with the
aim of refinancing its leasing and sales-financing business. An
increase in the cost of refinancing would have a negative
impact on the competitiveness and profitability of our financial
services business to the extent that the higher refinancing
costs cannot be passed on to customers; a limitation of the
financial services business would also have negative conse-
quences for the vehicle business. Access to capital markets
in individual countries may be limited by government regulations
or by a temporary lack of absorption capacity. In addition,
pending legal proceedings as well as Daimler’s own business
policy considerations and developments may temporarily
prevent the company from covering any liquidity requirements
by means of borrowing in the capital markets.
Risks of credit repayment requirements
Daimler may be required to make premature repayment of
special-purpose loans in the case of adverse results of ongoing
legal proceedings. It is to be expected that the resulting refi-
nancing requirement will have to be concluded at a higher cost.
Risks and opportunities from changes in credit ratings
Risks and opportunities exist in connection with potential
downgrades or upgrades to credit ratings by the rating agen-
cies, and thus to Daimler’s creditworthiness. Downgrades
could have a negative impact on the Group’s financing if such
a downgrade leads to an increase in the costs for external
financing or restricts the Group’s ability to obtain financing.
A credit rating downgrade could also discourage investors
from investing in Daimler AG.
Risks and opportunities relating to pension plans
Daimler has pension benefit obligations and, to a lesser degree,
obligations relating to healthcare benefits, which are largely
covered by plan assets. The balance of pension obligations less
plan assets constitutes the carrying amount or funded status
of those employee benefit plans. The measurement of pension
obligations and the calculation of net pension expense are
based on certain assumptions. Even small changes in those
assumptions such as a change in the discount rate have a
negative or positive effect on the funded status and Group
equity in the current financial year, and lead to changes in
the periodic net pension expense in the following financial year.
The fair value of plan assets is determined to a large degree
by developments in the capital markets. Unfavorable or favor-
able developments, especially relating to equity prices and
fixed-interest securities, reduce or increase the carrying value
of plan assets. A change in the composition of plan assets
can also have a positive or negative impact on the fair value of
plan assets. The broad diversification of investments, the
selection of asset managers on the basis of quantitative and
qualitative analyses, and the ongoing monitoring of returns
and risks contribute to a reduction in the investment risk. The
structure of pension obligations is taken into consideration
with the determination of the investment strategy for the plan
assets in order to reduce fluctuations of the funded status.
Further information on the pension plans and their risks is
provided in E Note 22 of the Notes to the Consolidated
Financial Statements.
Further information on financial risks, risk-limiting measures
and the management of these risks is provided in E Note 33
of the Notes to the Consolidated Financial Statements. Infor-
mation on the Group’s financial instruments is provided in
E Note 32 of the Notes to the Consolidated Financial State-
ments.
146 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT
Legal and tax risks
The Group continues to be exposed to legal and tax risks.
Provisions are recognized for those risks if and insofar as they
are likely to be utilized and the amounts of the obligations
can be reasonably estimated.
Legal risks
Regulatory Risks. The automotive industry is subject to exten-
sive governmental regulations worldwide. Laws in various
jurisdictions regulate occupant safety and the environmental
impact of vehicles, including emissions levels, fuel economy
and noise, as well as the emissions of the plants where vehicles
or parts thereof are produced. In case regulations applicable
in the different regions are not complied with, this could result
in significant penalties and reputational harm or the inability
to certify vehicles in the relevant markets. The cost of compli-
ance with these regulations is significant, and in this context,
Daimler expects a significant increase in such costs.
Risks from legal proceedings in general. Daimler AG and its
subsidiaries are confronted with various legal proceedings,
claims as well as government investigations and orders (legal
proceedings) on a large number of topics, including vehicle
safety, emissions, fuel economy, financial services, dealer, sup-
plier and other contractual relationships, intellectual property
rights, warranty claims, environmental matters, antitrust matters
(including actions for damages) as well as shareholder litiga-
tion. Product-related litigation involves claims alleging faults in
vehicles, some of which have been made as class actions.
If the outcome of such legal proceedings is detrimental to
Daimler, the Group may be required to pay substantial
compensatory and punitive damages or to undertake service
actions, recall campaigns, monetary penalties or other costly
actions. Some of these proceedings may have an impact on the
Group’s reputation.
Risks from legal proceedings in connection with diesel
exhaust gas emissions – governmental proceedings.
Daimler is continuously subject to governmental information
requests, inquiries, investigations, administrative orders and
proceedings relating to environmental, criminal, antitrust and
other laws and regulations in connection with diesel exhaust
emissions.
Several federal and state authorities and other institutions
worldwide have inquired about and/or are/have been conduct-
ing investigations and/or administrative proceedings, and/or
have issued administrative orders or, in the case of the Stuttgart
district attorney’s office, a fine notice. These particularly
relate to test results, the emission control systems used in
Mercedes-Benz diesel vehicles and/or Daimler’s interaction
with the relevant federal and state authorities as well as related
legal issues and implications, including, but not limited to,
under applicable environmental, criminal and antitrust laws.
These authorities and institutions include, amongst others,
the U.S. Department of Justice (“DOJ”), which has requested
that Daimler conduct an internal investigation, the U.S.
Environmental Protection Agency (“EPA”), the California Air
Resources Board (“CARB”) and other US state authorities,
the European Commission, the German Federal Cartel Office
(“Bundeskartellamt”) as well as national antitrust authorities
and other authorities of various foreign states as well as the
German Federal Ministry of Transport and Digital Infrastruc-
ture (“BMVI”) and the German Federal Motor Transport Author-
ity (“KBA”). In the course of its formal investigation into possible
collusion on clean emission technology, the European Com-
mission sent a statement of objections to Daimler and other
automobile manufacturers in April 2019. In this context,
Daimler filed an application for immunity from fines (leniency
application) with the European Commission some time ago.
The Stuttgart district attorney’s office is conducting criminal
investigation proceedings against Daimler employees on
the suspicion of fraud and criminal advertising, and, in May 2017,
searched the premises of Daimler at several locations in Ger-
many. In February 2019, the Stuttgart district attorney’s office
also initiated a formal investigation proceeding against
Daimler AG with respect to an administrative offense. In Sep-
tember 2019, the Stuttgart district attorney’s office issued
a fine notice against Daimler based on a negligent violation of
supervisory duties in the amount of €870 million which has
become legally binding, thereby concluding the administrative
offense proceedings against Daimler. Daimler continues to
fully cooperate with the authorities and institutions. Irrespective
of such cooperation and in light of the recent developments,
it is possible that further regulatory, criminal and administrative
investigative and enforcement actions and measures relating
to Daimler and/or its employees will be taken or administrative
orders will be issued. Such actions, measures and orders may
include subpoenas, that is, legal instructions issued under pen-
alty of law in the process of taking evidence, or other requests
for documentation, testimony or other information, or orders
to recall vehicles, further search warrants, a notice of violation
or an increased formalization of the governmental investigations,
coordination or proceedings, including the resolution of pro-
ceedings by way of a settlement. Additionally, further delays in
obtaining regulatory approvals necessary to introduce new or
recertify existing vehicle models could occur.
B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 147
In the years 2018 and 2019, the KBA issued various administra-
tive orders holding that certain calibrations of specified func-
tionalities in certain Mercedes-Benz diesel vehicles are to be
qualified as impermissible defeat devices and ordered subse-
quent auxiliary provisions for the respective EC type approvals
in this respect, including stops of the first registration and
mandatory recalls. Daimler filed timely objections against such
administrative orders in order to have the open legal issues
resolved, if necessary by a court of law. In the course of its
regular market supervision, the KBA is routinely conducting
further reviews of Mercedes-Benz vehicles and is asking ques-
tions about technical elements of the vehicles. In light of the
aforementioned administrative orders issued by the KBA, it is
likely that in the course of the ongoing and/or further investi-
gations KBA will issue additional administrative orders holding
that other Mercedes-Benz diesel vehicles are also equipped
with impermissible defeat devices. Daimler has (in view of KBA’s
interpretation of the law as a precaution) implemented a
temporary delivery and registration stop with respect to certain
models, also covering the used car, leasing and financing busi-
nesses, and is constantly reviewing whether it can lift this deliv-
ery and registration stop in whole or in part. The new calibra-
tions requested by KBA are being processed, and for a certain
proportion of the vehicles, the relevant software has already
been approved by KBA; the related recalls have insofar been
initiated. It cannot be ruled out that under certain circum-
stances, software updates may have to be reworked or further
delivery and registration stops may be ordered or resolved
by the Company as a precautionary measure, also with regard
to the used car, leasing and financing businesses. Daimler has
initiated further investigations and otherwise continues to fully
cooperate with the authorities and institutions.
In January 2019, another vehicle manufacturer reached civil
settlements with US federal and state authorities, as well
as with vehicle customers. Although the manufacturer did not
admit liability, the authorities maintain the position that the
manufacturer included undisclosed Auxiliary Emission Control
Devices (AECDs) in its diesel vehicles, apparently including
functionalities that are common in diesel vehicles, and that
certain of these AECDs are illegal defeat devices. As part
of these settlements, the manufacturer has agreed to, among
other things, pay civil penalties, undertake a recall of affected
vehicles, provide extended warranties, undertake a nationwide
mitigation project and make other payments. The manufac-
turer has furthermore agreed to provide payments to current
and former diesel vehicle owners as part of a class action
settlement.
In light of these matters and in light of the ongoing governmen-
tal information requests, inquiries, investigations, administrative
orders and proceedings, as well as our own internal investiga-
tions, it is possible that, besides KBA, one or more regulatory
and/or investigative authorities worldwide will reach the con-
clusion that other passenger cars and/or commercial vehicles
with the brand name Mercedes-Benz or other brand names
of the group are equipped with impermissible defeat devices
and/or that certain functionalities and/or calibrations were
not properly disclosed. Furthermore, the authorities have
increased scrutiny of Daimler’s processes regarding running-
change, field-fix and defect reporting as well as other compli-
ance issues. Except for, in particular, the Stuttgart district
attorney’s office’s administrative offense proceedings, the
other inquiries, investigations, legal actions and proceedings
as well as the replies to the governmental information requests,
the objection proceedings against KBA’s administrative
orders and our internal investigations are still ongoing and open;
hence, Daimler cannot predict the outcome at this time. Due
to the outcome of the administrative offense proceedings by the
Stuttgart district attorney’s office against Daimler and the
above as well as any potential other information requests, inqui-
ries, investigations, administrative orders and proceedings,
it is possible that Daimler will become subject to significant
additional monetary penalties, fines, disgorgements of profits,
remediation requirements, further vehicle recalls, further
registration and delivery stops, process and compliance improve-
ments, mitigation measures and the early termination of pro-
motional loans, and/or other sanctions, measures and actions
(such as the exclusion from public tenders), including further
investigations and/or administrative orders by these or other
authorities and additional proceedings. The occurrence of
the aforementioned events in whole or in part could cause sig-
nificant collateral damage including reputational harm. Fur-
ther, due to negative determinations or findings with respect to
technical or legal issues by one of the various governmental
agencies, other agencies – or also plaintiffs – could also adopt
such determinations or findings, even if such determinations
or findings are not within the scope of such authority’s respon-
sibility or jurisdiction. Thus, a negative determination or
finding in one proceeding, such as the fine notice issued by
the Stuttgart district attorney’s office, carries the risk of
being able to have an adverse effect on other proceedings, also
potentially leading to new or expanded investigations or
proceedings, including lawsuits.
In addition, Daimler’s ability to defend itself in proceedings
could be impaired by the fine notice issued by the Stuttgart
district attorney’s office as well as other unfavorable findings,
results or developments in any of the information requests,
inquiries, investigations, administrative orders, legal actions
and/or proceedings discussed above.
148 B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT
Risks from legal proceedings in connection with diesel
exhaust gas emissions – court proceedings. A consumer
class-action lawsuit is pending in the United States in which
it is alleged that Daimler AG and MBUSA conspired with Robert
Bosch LLC and Robert Bosch GmbH (collectively, “Bosch”)
to deceive US regulators and consumers. A separate lawsuit
was filed in January 2019 by the State of Arizona alleging that
Daimler AG and MBUSA deliberately deceived consumers in
connection with the advertising of Mercedes-Benz diesel
vehicles. Consumer class-action lawsuits containing similar
allegations were filed against Daimler AG and other compa-
nies of the Group in Canada in April 2016, and against
Daimler AG in Israel in February 2019. A similar class action was
filed in the United States in July 2017, but in December 2017,
the parties stipulated to dismiss that lawsuit without prejudice.
It may be filed again under specific conditions.
Furthermore, class actions have been filed in the United States
and Canada alleging anticompetitive behavior relating to vehicle
technology, costs, suppliers, markets, and other competitive
attributes, including diesel emissions control technology. A secu-
rities class action lawsuit is pending in the United States on
behalf of investors in Daimler AG American Depositary Receipts
which alleges that the defendants made materially false and
misleading statements about diesel emissions in Mercedes-Benz
vehicles. Daimler AG and the respective other affected com-
panies of the Group regard these lawsuits as being without merit
and will defend against the claims.
In Germany, a multitude of lawsuits by customers alleging claims
under warranty and/or tort laws as well as lawsuits by inves-
tors alleging the violation of disclosure requirements are pend-
ing. In this context, motions to initiate a model proceeding in
accordance with the Act on Model Proceedings in Capital Mar-
kets Disputes (KapMuG) have been filed by investors as well
as by Daimler AG. Currently, no model proceeding is pending.
Daimler AG also regards these lawsuits as being without merit
and will defend against the claims.
If court proceedings have an unfavorable outcome for Daimler,
this could result in significant damages and punitive damages
payments, remedial works or other cost-intensive measures.
Court proceedings can in part also have an adverse effect
on the reputation of the Group.
Risks from other legal proceedings. Following the settlement
decision by the European Commission adopted on July 19, 2016
concluding the trucks antitrust proceedings, Daimler AG and
Daimler Truck AG are facing customers’ claims for damages to
a considerable degree. Respective legal actions, class actions
and other forms of legal redress have been initiated in various
states in and outside of Europe and should further be expected.
Daimler takes appropriate legal remedies to defend itself.
As legal proceedings are fraught with a large degree of uncer-
tainty, it is possible that after their final resolution, some of
the provisions we have recognized for them could prove to be
insufficient. As a result, substantial additional expenditures
may arise. This also applies to legal proceedings for which the
Group has seen no requirement to recognize a provision.
It cannot be ruled out that the regulatory risks and risks from
legal proceedings discussed above individually or in the aggre-
gate may materially adversely impact our profitability and
financial position.
Although the final result of any such litigation may influence
the Group’s earnings and cash flows in any particular period,
Daimler believes that any resulting obligations are unlikely to
have a sustained effect on the Group’s financial position.
Further information on legal proceedings is provided in
E Note 30 of the Notes to the Consolidated Financial State-
ments.
Tax risks
Daimler AG and its subsidiaries operate in many countries world-
wide and are therefore subject to numerous different statu-
tory provisions and tax audits. Any changes in legislation and
jurisdiction, as well as different interpretations of the law by
the fiscal authorities – especially in the field of cross-border
transactions, may be subject to considerable uncertainty. It
is therefore possible that the provisions recognized will not be
sufficient, which could have negative effects on the Group’s
net profit and cash flows.
Any changes or interventions by the fiscal authorities are
continuously monitored by the tax department and measures
are taken if required.
Furthermore, Daimler’s ability to defend itself in the court pro-
ceedings could be impaired by unfavorable findings, results
or developments in any of the governmental or other court pro-
ceedings discussed above, in particular the fine notice issued
by the Stuttgart district attorney’s office.
In addition, if future taxable income is not earned or is too low,
there is a risk that the tax benefit from loss carryforwards and
tax-deductible temporary differences may not be recognized or
may no longer be recognized in full, which could have a nega-
tive impact on net profit.
B | COMBINED MANAGEMENT REPORT | RISK AND OPPORTUNITY REPORT 149
Overall assessment of the risk and opportunity
situation
The overall view of the Group’s risk and opportunity situation
is the sum of the described individual risks and opportunities of
all risk and opportunity categories.
In addition to the risk categories described above, unforeseeable
events can have a negative impact on the business operations
and thus on the Daimler Group’s profitability, cash flows, finan-
cial position and its reputation. In order to recognize risks
and opportunities at an early stage and to deal successfully with
the current risk and opportunity situation, the established
risk and opportunity management system is continuously mon-
itored and further developed.
The overall risk and opportunity situation of the Daimler Group
remains essentially unchanged. No risks are recognizable –
neither on the balance sheet date nor at the time of preparing
the consolidated financial statements – that either alone or
in combination with other risks could endanger the continued
existence of the Group.
Non-financial risks
As a company with worldwide activities, the Daimler Group is
at the focus of public interest. The relevant stakeholders’
perception is therefore of crucial importance and can affect
the reputation of the entire Daimler Group E page 196
Non-Financial Report. A key role in the public’s current percep-
tion is played by the company’s approach to environmental,
employee and social matters, fighting corruption and bribery,
and respecting human rights, and may lead to non-financial
risks.
Risks arise above all in connection with the public debate about
diesel vehicles and the related fundamental reconsideration
of methods for measuring emissions. Due to the replacement
of the NEDC (New European Driving Cycle) with the new mea-
suring method WLTP (Worldwide Harmonized Light Vehicles Test
Procedure), the fleet CO2 average has worsened. In the light
of today’s knowledge, this makes it more difficult to achieve the
CO2 targets as of 2020. Furthermore, there has been some
pressure in the past two years on diesel technology, which is
important for compliance with the challenging CO2 targets in
the EU, because of NOx levels exceeding the limits at some mea-
suring stations in cities. The current public focus on vehicle
emissions as well as possible certifications stops and recalls
jeopardize the reputation of the automotive industry and in
particular of the diesel engine, and could result in damage to
Daimler’s reputation. With the development of a new genera-
tion of diesel engines and their systematic market launch,
Daimler aims to achieve a reduction in NOx emissions in real
driving conditions (RDE). In general, legal risks – for example
in connection with antitrust investigations – as well as possible
legal and social violations by partners and suppliers can have
a negative impact on the reputation of the entire Daimler Group.
As one of the fundamental principles of business activity,
Daimler places particular priority – also in the selection of
partners and suppliers – on adherence to applicable laws
and ethical standards.
150 B | COMBINED MANAGEMENT REPORT | OUTLOOK
Outlook
The statements made in the Outlook chapter are based on the
operational planning of Daimler AG as approved by the Board
of Management and the Supervisory Board. That planning is
based on the premises we set regarding the economic situa-
tion and the development of automotive markets. It involves
assessments made by Daimler, which are based on analyses
by various renowned economic research institutes, interna-
tional organizations and industry associations, as well as on
the internal market analyses of our sales companies. The pros-
pects for our future business development as presented here
reflect the targets of our divisions as well as the opportunities
and risks presented by the anticipated market conditions and
the competitive situation during the planning period. Against
this backdrop, we adjust our expectations for business devel-
opment to reflect updated forecasts for the development of
the various automotive markets. The statements made below
are based on the facts known to us at the beginning of 2020.
Our assessments for the year 2020 are based on the assumption
of generally stable economic conditions and the expectation that
the upward development of the global economy will continue
at a moderate pace. We also assume that worldwide demand
for automobiles will be approximately of the magnitude of the
previous year. The development we have outlined is subject to
various opportunities and risks, which are explained in detail
in the Risk and Opportunity Report. E pages 135 ff.
The world economy
We assume that the moderate rate of growth of the global
economy will continue in 2020 and that there will be no signifi-
cant acceleration in the course of the year. The growth pros-
pects for the industrialized countries are rather weaker than in
the previous year, while the economies of the emerging markets
should grow at a similar or slightly higher rate overall.
The persistent weakness of leading indicators points to con-
tinued weak growth for the economy of the European Mone-
tary Union. In particular, we expect a perceptible slowdown of
investment activity due to the significantly less favorable busi-
ness climate and the weak development of incoming orders.
However, as long as the recessionary trend in the industry sec-
tor does not have a significantly stronger impact on the labor
market than it has done so far, private consumption should
continue to be a solid driver of growth this year. In addition,
although a further easing of monetary policy by the European
Central Bank seems unlikely from today’s perspective, it can-
not be ruled out in the event of a further economic slowdown.
Overall, these developments should lead to a growth rate in
the European Monetary Union of only about 1.0%. The outlook
for the German economy is also subdued. Here too, we expect
the continuation of a weak growth rate of between 0.5 and
1.0%. Because the concrete economic effects of the UK’s with-
drawal from the EU, which has now taken place, cannot yet be
foreseen in detail, the British economy must also be expected
to develop rather moderately in 2020. Nonetheless, most ana-
lysts do not anticipate an economic slump.
B | COMBINED MANAGEMENT REPORT | OUTLOOK 151
Growth of the US economy is likely to fall below the 2% mark
for the first time since 2016. A combination of weaker global
economic growth and continued uncertainty regarding the
various trade disputes is adversely affecting companies and
is likely to lead to a further slowdown in investment activity;
growth in private consumption is also expected to slow down
somewhat, but should remain solid thanks to moderate infla-
tion and low unemployment. In view of these developments,
the US Federal Reserve (Fed) is likely to adopt a wait-and-see
approach for the time being, but will take appropriate counter-
measures in the event of an economic slump or negative
employment effects.
Growth of the Japanese economy is expected to slow down
noticeably this year and to be only slightly above 0% due to the
effects of increased sales tax and the ongoing weakness of
exports.
We expect economic growth in China to continue to slow
down, as the effects of the trade conflict and the ongoing fight
against structural problems such as industrial overcapacity
and the very high levels of debt of state-owned enterprises will
have a dampening effect. Since the government’s stimulus
measures are likely to remain moderate in order to avoid exces-
sive debt and bubble effects, Chinese growth will probably be
below the 6% mark this year.
While the development of the Central and Eastern European
economies is expected to be similar to that of the previous
year, slight acceleration of growth is anticipated for the South
American economic area, mainly driven Brazil, the region’s
largest market. However, with growth in gross domestic prod-
uct expected to be lower than 2%, South America still remains
below its potential. Despite the still comparatively low level of
commodity prices, especially of oil, the countries of the Middle
East are expected to experience somewhat stronger growth of
about 2%, although with risks of a weaker development. Over-
all, the emerging markets should achieve economic growth in
the magnitude of 4% in 2020, thus developing along their long-
term trend.
Automotive markets
In 2020, worldwide demand for cars should stabilize and
remain close to the level of the previous year.
The European market is likely to be of the magnitude of 2019.
We expect demand to remain fairly stable also in Western
Europe. Demand in Germany, the region’s largest single market,
is likely to decrease slightly. Slight growth of the car market is
expected in Eastern Europe, following the relatively weak devel-
opment in the previous year.
Slight contraction is expected in the US market for cars and
light trucks. The anticipated market level remains solid, how-
ever. The Chinese car market should stabilize after the signifi-
cant decline in 2019 and roughly maintain the previous year’s
level.
In the EU30 region (European Union, United Kingdom, Switzer-
land and Norway) in 2020, we anticipate a market volume at the
prior-year level in the combined segment of mid-size and large
vans, as well as in the market for small vans. In the United
States, demand for large vans should be slightly stronger than
in the previous year. We expect the market for large vans in
Latin America to grow significantly in 2020, driven by demand
in Brazil. In China, we anticipate slight growth in the market for
mid-size vans.
For major truck sales markets, we expect generally rather
unfavorable conditions in 2020.
In the NAFTA region, we assume that the market for heavy-
duty trucks (class 8) will contract significantly compared with
the very high level of demand in 2019.
In a still weak overall economic environment in the EU30
region, we expect demand for heavy-duty trucks to decrease
significantly compared with the robust prior-year level. In
Brazil, sales of heavy trucks are only likely to remain close to
the level of 2019 after the lively recovery of recent years.
Overall, the world economy should grow in 2020 by approxi-
mately 2.5%, similar to the moderate rate of expansion in the
previous year.
In Japan, we anticipate a significant decrease in demand for
heavy-duty trucks.
We expect the market volume for buses in both the EU30
region and Brazil to be slightly below the level of 2019.
152 B | COMBINED MANAGEMENT REPORT | OUTLOOK
Unit sales
Unit sales at Mercedes-Benz Cars in 2020 are anticipated to
be slightly below the prior-year level. This reflects the complete
change in the business model at smart to focus on electric
models only and a preliminary estimate of possible effects from
the coronavirus outbreak both on the supply chain and the
automotive markets.
While we continue to renew our attractive and innovative model
portfolio at Mercedes-Benz, we plan to launch more than half
a dozen new and upgraded cars in 2020. Above all, the new GLA
should continue to have a positive impact on sales. We are
well positioned also in the strong upper mid-range segment in
2020, due in particular to the new GLE Coupe and the model
update of the E-Class family. Mercedes-AMG should be a guar-
antee for our success in the high-performance segment once
again in 2020. More and more customers are enthusiastic about
the attractive and broad range of vehicles offered by our sports-
car and high-performance brand, which we are continually
developing.
We are systematically expanding our global production net-
work for electric mobility. The product and technology brand
EQ, which stands for electric intelligence, offers vehicles with
all-electric drive. We intend to electrify the entire portfolio of
Mercedes-Benz Cars by 2022. By 2025, we assume that up to
25% will be purely electric cars. By 2030, plug-in hybrids and
all-electric models should account for more than 50%.
The smart brand will change over fully to electric drive in the
year 2020. The battery-electric smart models make entry into
electric mobility more attractive than ever before. They com-
bine the agility of the smart with locally emission-free driving –
an ideal combination for urban mobility. The focus on electric
models only will lead to lower unit sales of the smart brand.
Unit sales at Mercedes-Benz Vans in 2020 are anticipated to
be slightly below the prior-year level.
Following the strong demand of recent years, the normalization
of major truck markets will affect sales at Daimler Trucks
in 2020. The division expects a slight decrease in unit sales in
2020. This development will be primarily influenced by expec-
tations for the North American and European markets.
Daimler Buses assumes that it will be able to defend its market
leadership in its most important traditional core markets for
buses above 8 tons. We anticipate slight growth in total unit
sales in 2020.
Daimler Mobility expects a slight decrease in new business
and a contract volume at the prior-year level in 2020. We
aim to utilize new market potential through more flexible leas-
ing and rental products with the option of switching to new
vehicles at shorter intervals. And we intend to make use of
additional market opportunities by expanding our online sales
channels and with telematics-based products for insurance
and fleet management. We continue to see good growth oppor-
tunities also in the mobility segment.
On the basis of our assumptions concerning the development
of automotive markets and the divisions’ planning, we expect
the Daimler Group to achieve unit sales in 2020 slightly below
the level of the previous year.
Revenue and earnings
We assume that the Daimler Group will generate revenue in
2020 at the level of the previous year. Also Mercedes-Benz
Cars & Vans as well as Daimler Mobililty expect revenue at the
previous year level, while Daimler Trucks & Buses anticipates
a significant revenue decrease.
Despite the expectation of unit sales slightly below and revenue
at the prior-year level, we anticipate significant earnings
growth for the Daimler Group in 2020, after EBIT in 2019 was
adversely affected by a number of material adjustments.
This includes the Daimler Trucks & Buses and Daimler Mobility
divisions with decreases in EBIT. The first positive effects on
earnings should already occur in 2020 from the significant effi-
ciency measures that have already been taken at all divisions,
such as savings in personnel and material costs, portfolio and
model adjustments, the ongoing implementation of platform
strategies and the stricter allocation of capital. However, these
measures will only take full effect in subsequent years. On the
other hand, restructuring measures and the job cuts that have
been initiated will have a negative impact on earnings in 2020.
We are standardizing and modularizing our production processes
throughout the Group. In this context, we are making intelli-
gent use of vehicle platforms, allowing us to achieve further cost
advantages. In parallel, we are pushing forward with digital
connectivity in all divisions and at all stages of the value chain
– from development to production to sales and service. In this
way, we are opening up additional scope to become even faster,
more flexible and more efficient – to the benefit of our custom-
ers. However, earnings will be reduced by the continuation of
high expenditure: for innovative technologies (especially for
reducing fuel consumption and for electrification), for the digi-
tization of our products and processes, and for the expansion
and modernization of our worldwide production capacities.
On the basis of the market developments we anticipate, the
aforementioned factors and the planning of our divisions, we
assume that Group EBIT in 2020 will be significantly above
the level of 2019, which was affected by numerous material
adjustments.
For the transparent presentation of the ongoing business, as of
the year 2020, we will calculate and forecast adjusted return
on sales for Mercedes-Benz Cars & Vans and Daimler Trucks &
Buses and adjusted return on equity for Daimler Mobility. For
the two automotive divisions, we will also forecast an adjusted
cash conversion rate, which is derived from the adjusted cash
flow before interest and taxes (CFBIT) and adjusted EBIT. The
adjustments include individual items if they lead to material
effects in a reporting period. These individual items relate in
particular to legal proceedings and related measures, restruc-
turing measures and M&A transactions. Further information on
the management system is provided on E pages 63 f.
The individual divisions have the following expectations for
adjusted returns in 2020:
Mercedes-Benz Cars & Vans: adjusted return on sales
of 4 to 5%
Daimler Trucks & Buses: adjusted return on sales of 5%
Daimler Mobility: adjusted return on equity of 12%
At Mercedes-Benz Cars, positive effects will result from a more
favorable sales structure for our cars. There should be support-
ing effects for both cars and vans from measures for efficiency
improvements, especially significant material-cost savings and
improved personnel costs. There will be negative effects, how-
ever, from the continuation of very high expenditure for new
technologies and vehicles, especially the expenses incurred to
meet the CO2 targets.
Daimler Trucks & Buses should also benefit from efficiency-
improving measures, in particular reduced variable costs and
lower personnel costs. Opposing effects will result, however,
from the expected market contractions in the NAFTA and EU30
regions, as well as from the continuation of high expenditure
for new technologies and vehicles.
With regard to the adjusted return on equity expected for
Daimler Mobility, there will be positive effects from the fleet-
management business and the focus of our mobility services,
as well as negative effects from the normalization of credit-risk
costs and slightly lower interest income. In addition, a higher
equity ratio due to stricter regulatory requirements will have a
negative impact on the adjusted return on equity.
B | COMBINED MANAGEMENT REPORT | OUTLOOK 153
Free cash flow and liquidity
The free cash flow of the industrial business will continue to
be adversely affected by high advance expenditure for new
products and technologies, although this should have reached
its highest level in 2019. Nonetheless, we expect the free cash
flow of the industrial business to be significantly higher than in
the previous year. This does not take into account possible
expenses relating to legal and governmental proceedings.
We expect the adjusted cash conversion rate for the
Mercedes-Benz Cars & Vans division to be within a corridor of
0.7 to 0.9 in 2020. The adjusted cash conversion rate for
Daimler Trucks & Buses is likely to be between 0.8 and 1.0 in
2020.
For the year 2020, we aim to have liquidity available in a vol-
ume 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 refi-
nancing 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 2020. 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 our ongoing
strong creditworthiness and in a continuing environment of high
liquidity in the international capital markets, we anticipate sta-
ble refinancing conditions. Furthermore, our goal is to continue
to ensure a high degree of financial flexibility.
Dividend
At the Annual Shareholders’ Meeting on April 1, 2020, the
Board of Management and the Supervisory Board will propose
the payment of a dividend of €0.90 per share for the year 2019
(prior year: €3.25). This represents a total distribution of €1.0
billion (prior year: €3.5 billion).
In line with a sustainable dividend policy, Daimler sets the divi-
dend based on a distribution ratio of 40% of the net profit
attributable to Daimler shareholders. We also take into consid-
eration the free cash flow from the industrial business when
setting the dividend.
154 B | COMBINED MANAGEMENT REPORT | OUTLOOK
Investment
In order to achieve our ambitious growth targets, we will make
our product range even more attractive in the coming years
and focus it even more on our customers’ requirements. At the
same time, we want to be able to play a leading role in the far-
reaching technological transformation of the automotive indus-
try. This applies in particular to the increasing electrification
of our product portfolio and to the digital connectivity of our
products and processes along the entire value chain. Against
this backdrop, investment in property, plant and equipment is
mainly directed at preparations for the production of our new
models. Other main areas are the realignment of our produc-
tion facilities in Germany, local production in growth markets
and the establishment of a global production network for elec-
tric vehicles and batteries. Against the background of an even
more targeted allocation of capital and prioritization of proj-
ects, we plan to invest in property, plant and equipment in
2020 at a level similar to that of 2019.
At Mercedes-Benz Cars & Vans, we will invest in 2020, among
other things, in preparations to ramp up production of the vehi-
cles in our EQ family with electric drive and in the new genera-
tion of the C-Class and S-Class. In addition, we will continue to
invest in our production plants and for new engines and trans-
missions. As a result, investment in property, plant, and equip-
ment at Mercedes-Benz Cars & Vans is also expected to be at
the prior-year level.
Against the backdrop of the technological changes taking
place in the transport industry, a large part of the investment
by Daimler Trucks & Buses in 2020 will be for automated driv-
ing and electric mobility. In addition, the division will invest pri-
marily in new products for specific areas of application, such
as vocational trucks in the North American market, global com-
ponent projects and the optimization of the worldwide produc-
tion and sales network. Overall, we expect a slight increase in
investment in property, plant and equipment at Daimler Trucks
& Buses compared with 2019.
Research and development
With our research and development activities, our goal is to
further strengthen Daimler’s competitive position against the
backdrop of upcoming technological challenges. With new
and attractive products, we want to inspire our customers and
utilize the growth opportunities offered by worldwide automo-
tive markets. We are focusing on the strategic areas for the
future of connectivity, automated and autonomous driving, and
in particular the development of electric drive systems. After
the continuous increase in recent years, the volume of research
and development expenditure should have reached a plateau in
2019. Against the background of a focused and efficient appli-
cation of funds, research and development expenditure in 2020
should therefore be in the magnitude of the previous year.
At Mercedes-Benz Cars & Vans, a large proportion of the
research and development expenditure in 2020 will be for
developing the model range of the EQ product and technology
brand, especially in the related development of a new platform
for vehicles with all-electric drive and in the areas of digitiza-
tion and automated and autonomous driving, which, along with
electric mobility, are increasingly gaining importance. For cars,
expenditure will decrease compared with the previous year for
the successor model to the current S-Class and for the new
compact cars. The Mercedes-Benz Cars & Vans division there-
fore anticipates a slight decrease in research and development
expenditure compared with the prior-year volume.
The Daimler Trucks & Buses division plans on research and
development expenditure at the prior-year level. The focus will
be on the development of new technologies, among other
things, for the automation and connectivity of trucks and buses
and for a fleet that is CO2-neutral in driving operation (tank- to-
wheel) by means of electric drive (battery power and fuel
cells). In the long term, we anticipate considerable business
potential with highly automated trucks (SAE Level 4) in “Hub-
2Hub” applications on US highways between logistics centers.
Another important area is the development of successor gen-
erations for existing products, with a focus on the segment
of heavy-duty trucks, as well as on tailored products and tech-
nologies for major growth markets.
Overall statement on future development
The conditions for our business at the beginning of 2020 are
less favorable than in the previous year. Financial challenges
are greater than ever due to the necessary transformation for
a CO2-neutral future. This requires high levels of investment in
electric mobility and wide-ranging structural adjustments. We
are therefore systematically implementing our “Ambition 2039”
for CO2-neutral mobility. In this context, we will utilize the
potential offered by automated driving and digital services. The
achievement of an appropriate return and a solid cash flow
have absolute priority. This is the only way for us to play a lead-
ing role in the transformation for a CO2-neutral future. Com-
prehensive efficiency measures have therefore been defined at
all divisions and at Daimler AG. The allocation of financial
resources is managed transparently and stringently at the level
of the parent company. Together with partners, we plan to
B | COMBINED MANAGEMENT REPORT | OUTLOOK 155
Forward-looking statements
This document contains forward-looking statements that reflect our current
views about future events. The words “anticipate,” “assume,” “believe,” “esti-
mate,” “expect,” “intend,” “may,” “can,” “could,” “plan,” “project,” “should”
and similar expressions are used to identify forward-looking statements.
These statements are subject to many risks and uncertainties, including an
adverse development of global economic conditions, in particular a decline of
demand in our most important markets; a deterioration of our refinancing
possibilities on the credit and financial markets; events of force majeure
including natural disasters, pandemics, acts of terrorism, political unrest,
armed conflicts, industrial accidents and their effects on our sales, purchas-
ing, production or financial services activities; changes in currency exchange
rates and tariff regulations; a shift in consumer preferences towards smaller,
lower-margin vehicles; a possible lack of acceptance of our products or ser-
vices which limits our ability to achieve prices and adequately utilize our pro-
duction capacities; price increases for fuel or raw materials; disruption of
production due to shortages of materials, labor strikes or supplier insolven-
cies; a decline in resale prices of used vehicles; the effective implementation
of cost-reduction and efficiency-optimization measures; the business outlook
for companies in which we hold a significant equity interest; the successful
implementation of strategic cooperations and joint ventures; changes in
laws, regulations and government policies, particularly those relating to vehi-
cle emissions, fuel economy and safety; the resolution of pending govern-
ment investigations or of investigations requested by governments and the
conclusion of pending or threatened future legal proceedings; and other risks
and uncertainties, some of which we describe under the heading “Risk and
Opportunity Report” in this Annual Report. If any of these risks and uncer-
tainties materializes or if the assumptions underlying any of our forward-
looking statements prove to be incorrect, the actual results may be materi-
ally different from those we express or imply by such statements. We do not
intend or assume any obligation to update these forward-looking statements
since they are based solely on the circumstances at the date of publication.
References made in this management report
Insofar as the references made in this Management Report relate to parts of
the Annual Report that were not included in the external audit (components
outside the company and consolidated financial statements and the com-
bined Management Report), or to the Daimler website or other reports or
documents, these were not part of the external audit.
develop new technologies and share development costs. In this
way, we intend to continue our profitable growth in the
medium term and to strengthen our leading position worldwide
in all divisions.
As the inventor of the automobile, it is in our nature to con-
stantly reinvent mobility. We aim to offer sustainable solutions
for the mobility and goods transport of the future. We want to
inspire emotionally and convince rationally. With our Mercedes-
Benz automobiles, we are following this path with the goal of
combining sustainability and modern luxury. And in the trans-
portation and haulage business, we want to make our custom-
ers successful with innovative and highly efficient commercial
vehicles.
The customer is at the center of our considerations, whereby
the further development of our brand plays a decisive role. In
Interbrand’s current Best Global Brands 2019 ranking, the
Mercedes-Benz brand is the world’s most successful and valu-
able premium automotive brand. We want to make our brand
even more unique in the future and position it in an even more
customer-oriented manner. Especially in times of transforma-
tion, the emotional bond with our customers is more important
than ever. Also with our commercial vehicles, our efforts focus
on the customers and their benefits. We are developing tech-
nologies to further improve the total cost of transport and to
develop safe and efficient solutions for the transportation and
haulage tasks of the future.
The transformation is a long-term process of adjustment in
which we want to implement our structures and processes
together with our employees. With a workforce that is agile
and willing to learn, we will develop the necessary skills for the
new requirements. Our corporate culture creates the basis for
the outstanding innovative strength of our employees. We live
diversity. Integrity is our inner compass. It guides our actions
and the relationships with our business partners.
In view of the challenging environment and the expected changes
in mobility, we are consistently implementing our sustainable
business strategy and thus shaping the transformation of the
automotive industry from a leading position. Accordingly, our goal
is to continue to be a leading vehicle manufacturer and at the
same time to develop into one of the leading providers of con-
nected mobility. In this way, we again achieved a number of pio-
neering milestones in 2019. And against this backdrop, we look
forward with confidence to a challenging year 2020. While we
expect the Group’s unit sales to slightly decrease and Group reve-
nue to be in the magnitude of the previous year, we anticipate a
significant increase in Group EBIT compared with the figure for
2019, which was impacted by numerous material adjustments.
C
The
Divisions
Daimler’s divisions performed well in 2019 despite some difficult market condi-
tions. This was significantly supported by numerous new products and innovative
services. Mercedes-Benz Cars, Mercedes-Benz Vans and Daimler Buses all
surpassed their prior-year unit sales, and Daimler Mobility increased its contract
volume. In order to further improve our competitiveness, we entered into
future-oriented partnerships in key areas such as autonomous driving, mobility
services and the further development of the smart brand.
C | The Divisions
C | THE DIVISIONS | CONTENTS 157
Mercedes-Benz Cars
158 – 165
Daimler Buses
174 – 176
– Ongoing high levels of unit sales and revenue
– Ninth consecutive record year for Mercedes-Benz Cars
– Sustainability at Frankfurt Motor Show 2019
– More than a dozen new and upgraded vehicles
– EQ technology brand offers comprehensive ecosystem for
electric mobility
– Launch of first Mercedes-Benz EQ model
– Expanded range of plug-in hybrids
– VISION EQS: milestone on the way into the future
– Strengthened presence in China
– Joint venture with Geely for further development of smart
– Global production network further developed with smart
production
– Presentation of Best Customer Experience 4.0
– Sixth consecutive world championship double in Formula 1
– EBIT of €3.4 billion (2018: €7.2 billion)
Daimler Trucks
166 – 170
– Decrease in unit sales
– Heavy-duty trucks available in core markets with partially
automated driving functions (SAE Level 2)
– Start of tests of highly automated trucks (SAE Level 4)
– Supply agreement with CATL for global battery modules
– Launch in North America of telematics-based financing
option Dynamic Lease
– Slight growth in unit sales
– Market leadership defended in most important traditional
core markets above eight tons gross vehicle weight
– Positive development of complete-bus business in Europe
– Online shop started for bus spare parts
– Mercedes-Benz eCitaro wins Sustainable Bus Award 2020
– Range extension targeted with fuel cells
– EBIT slightly above prior-year level at €283 million
(2018: €265 million)
Daimler Mobility
177 – 179
– Renewed growth in contract volume
– Further increase in number of automotive insurance
policies brokered
– New name: Daimler Mobility AG
– Mobility “from years to minutes”
– Expansion of e-payment activities
– Launch of short-term insurance for more mobility
– New app for paperless conclusion of insurance contracts
– Launch of telematics-based financing option
– Expansion of product portfolio for telematics services
– Athlon adds e-bike option to leasing app
– Ongoing growth of mobility joint ventures
– Joint venture established for premium ride hailing in China
– EBIT significantly above prior-year level at €2.1 billion
– EBIT lower than in previous year at €2.5 billion
(2018: €1.4 billion)
(2018: €2.8 billion)
Mercedes-Benz Vans
171 – 173
– Unit sales at record level
– Growth driven by the Sprinter
– Market launch of the new V-Class
– Decision on Citan successor
– Focus on eDrive@Vans
– Start of series production of eSprinter
– World premiere of our first battery-electric multi-purpose
vehicle in the premium segment
- Digitization at full speed
– EBIT significantly below prior-year level at minus €3.1 billion
(2018: €0.3 billion)
s
t
n
e
t
n
o
C
i
d
e
n
b
m
o
C
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
s
n
o
i
s
i
v
i
D
e
h
T
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
t
r
o
p
e
R
l
i
a
c
n
a
n
F
-
n
o
N
i
d
e
t
a
d
i
l
o
s
n
o
C
s
t
n
e
m
e
t
a
t
S
l
i
a
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
r
u
F
158 C | THE DIVISIONS | MERCEDES-BENZ CARS
Mercedes-Benz Cars
Mercedes-Benz Cars performed well in the market during the year under review, despite difficult
conditions. Unit sales and revenue were above the high levels of the previous year, and Mercedes-
Benz continues to be the premium brand with the strongest unit sales in the automotive industry.
However, EBIT declined significantly in 2019. During the year under review, we systematically
forged ahead with our model offensive. In total, Mercedes-Benz launched more than a dozen new
or upgraded models in 2019, including the new B-Class, the A-Class sedan and the new GLB. We
also launched the EQC (combined electricity consumption: 20.8 – 19.7 kWh/100 km; combined CO2
emissions: 0 g/km)1, the first vehicle of our EQ electric-mobility brand. Mercedes-Benz’s stand at
the Frankfurt Motor Show (IAA) was dominated by the presentation of sustainable solutions for the
future of mobility. Our numerous world premieres at the event underscored our firm intention to
continue designing and offering intelligent mobility solutions in the future.
C.01
Mercedes-Benz Cars
€ amounts in millions
2019
2018
19/18
% change
Revenue
EBIT
Return on sales (in %)
Investment in property, plant
and equipment
Research and development
expenditure
thereof capitalized
Production
Unit sales
93,877
3,359
3.6
93,103
7,216
7.8
5,629
5,684
7,518
2,904
6,962
2,269
2,397,673
2,398,270
2,385,432
2,382,791
Employees (December 31)1
152,048
151,316
+1
-53
.
-1
+8
+28
-0
+0
+0
1 Adjustment of the number of employees in 2018 due to changes in
the Group’s internal allocation of employees.
C.02
Unit sales Mercedes-Benz Cars
in thousands
Mercedes-Benz
thereof A-/B-Class
C-Class
E-Class
S-Class
SUVs1
Sports cars
smart
Mercedes-Benz Cars
thereof Europe
thereof Germany
NAFTA
thereof United States
Asia
thereof China
1 Including the GLA and the GLB
2019
2018
19/18
% change
2,278
2,253
527
440
418
75
790
28
107
409
478
434
84
829
19
130
2,385
2,383
992
335
369
313
940
694
983
324
393
327
921
678
+1
+29
-8
-4
-10
-5
+48
-18
+0
+1
+3
-6
-4
+2
+2
Ongoing high levels of unit sales and revenue
The Mercedes-Benz Cars division sold a total of 2,385,400
vehicles in 2019 despite difficult overall conditions (2018:
2,382,800). The division thus surpassed the record level of
unit sales set in the previous year. At €93.9 billion, revenue
also exceeded the previous year’s high level (+1%). C.01
This development was in large part due to the extensive mar-
ket success of our new compact-class models and continued
strong demand for the E-Class and our SUVs. EBIT decreased
significantly to €3.4 billion in the year under review as the
result of various factors, which are described in detail in the
Profitability chapter. E page 71
Mercedes-Benz Cars sold a total of 992,200 vehicles in Europe
in 2019 (2018: 982,700). Sales growth in Germany (+4%) was
accompanied by decreases in Italy (-1%) and Spain (-5%). Unit
sales in the volume markets of the United Kingdom and France
remained at the levels of the previous year. The Mercedes-
Benz Cars division remained very successful in China during
the year under review, with unit sales there increasing by 2%
to 694,200 vehicles. We also set new records for unit sales
in other Asian markets, in South Korea for example (+18%). At
368,900 vehicles, unit sales in the NAFTA region were lower
than the high level of the previous year. Decreases were
recorded in the United States (-4%) and in Canada (-12%).
Ninth consecutive record year for Mercedes-Benz Cars
At 2,278,300 vehicles, unit sales by the Mercedes-Benz brand
surpassed the record level of the previous year by 1%. C.02
Mercedes-Benz is thus once again the premium brand with the
strongest unit sales in the automotive industry. Mercedes-Benz
is number one in the premium segment in Germany and sev-
eral other key European markets, as well as in South Korea,
India, Australia, Canada and Japan. Furthermore, we are the
number one in the premium segment also in China, with a new
sales record in that country.
1 Electricity consumption and range have been calculated on the basis of
Commission Regulation (EC) No. 692/2008. Electricity consumption and
range depend on vehicle configuration.
C | THE DIVISIONS | MERCEDES-BENZ CARS 159
C | THE DIVISIONS | MERCEDES-BENZ CARS 159
Mercedes-Benz EQC (combined electricity consumption: 20.8 – 19.7 kWh/100 km; combined CO2 emissions: 0 g/km)1:
The Mercedes-Benz among electric vehicles and a car that makes a convincing impression in terms of the sum of its attributes.
160 C | THE DIVISIONS | MERCEDES-BENZ CARS
In total, Mercedes-Benz launched more than a dozen new or
upgraded models in 2019. In particular our new compact mod-
els, including the new B-Class, the A-Class Sedan and the new
GLB, played a major role in our sales growth in the year under
review. However, our AMG models also generated significant
sales momentum. More and more customers are fascinated by
the broad and appealing range of automobiles offered by our
sports-car and high-performance brand, which we are continu-
ously refining.
The A-Class and B-Class models were particularly successful
in the year under review. Unit sales of these models, including
the CLA and CLA Shooting Brake, increased by 29% to a total
of 527,000 vehicles. Sales of C-Class vehicles decreased by 8%
to 439,600 sedans, wagons, coupes and convertibles. The
E-Class continued to perform very well on the market. At
418,100 vehicles, total unit sales of the E-Class did not achieve
the high level of the prior year. With sales of 71,300 units, the
S-Class sedan continues to be the world’s best-selling luxury
sedan. In total, we sold 75,400 vehicles in this market segment
in 2019 (2018: 83,800). The Mercedes-Maybach luxury brand
continued to be very successful. Our unit sales in the SUV seg-
ment were impacted by the model changes for the GLE and the
GLS. Demand for the new models was much higher than the
actual number of vehicles available. Unit sales, however,
achieved the very high level of 789,800 vehicles (2018:
829,200). In the summer of 2019, we also implemented a very
successful model upgrade for the GLC and GLC coupe, both of
which remain very popular. Sales of our sports cars rose by
48% to 28,400 units; this increase was largely due to the mar-
ket success of our Mercedes-AMG GT models.
The sales development for the smart brand during the year
under review was largely shaped by measures associated with
the complete conversion of the smart to all-electric drive by
2020. Within the framework of this changeover, the number of
vehicles with combustion engines offered by smart was gradu-
ally reduced throughout the year. All in all, the smart brand
sold a total of 107,100 fortwo and forfour models in approxi-
mately 40 markets worldwide in 2019 (2018: 130,000).
IAA 2019: on the road to an emission-free future
Mercedes-Benz’s appearance at the International Motor Show
(IAA) in Frankfurt from September 10 to 22, 2019 was domi-
nated by the presentation of sustainable solutions for the
future of mobility. Numerous world premieres at the event
underscored the intention of the inventor of the automobile to
continue designing and offering intelligent mobility solutions.
The new Vision EQS show car, which celebrated its world pre-
miere at IAA 2019, embodies the flexible and customer-
focused vision of sustainability that the Mercedes-Benz EQ
product and technology brand stands for. Also on display for
the first time were new plug-in hybrid derivatives from
Mercedes-Benz and the first all-electric multipurpose vehicle
from the EQ brand. The GLB also had its auto show premiere,
while smart, a pioneer for urban mobility, presented model
upgrades of its electric city cars for the first time in Frankfurt.
The new Mercedes-Benz GLB – with up to seven seats
The Mercedes-Benz GLB had its world premiere on June 10,
2019 in Utah in the United States. It was then presented for
the first time at an auto show during the IAA in September
2019. The new Mercedes-Benz GLB is a versatile SUV that can
also function as a spacious family car. The GLB’s SUV attri-
butes are underscored by powerful proportions with short
overhangs and an off-road-oriented design, as well as the
optional 4MATIC all-wheel drive and a special off-road light
that helps detect obstacles immediately in front of the vehicle
at low speeds. The GLB is the first Mercedes-Benz in this seg-
ment available with seven seats as an option; the two seats in
the third row can be used by people up to 1.68 meters tall.
The new Mercedes-Benz GLA – the entry-level model in
the SUV family
The new Mercedes-Benz GLA made its world premiere in digi-
tal form on the Mercedes me media platform. With its powerful
and efficient four-cylinder engines, the latest driving assis-
tance systems with cooperative driver support, the intuitive
MBUX (Mercedes-Benz User Experience) infotainment system
and the comprehensive ENERGIZING comfort control system,
the GLA boasts all the outstanding features of the latest gener-
ation of Mercedes-Benz compact vehicles. The model is also
available with the optional 4MATIC permanent all-wheel drive
system that features fully variable torque distribution.
Launch of first Mercedes-Benz model of the EQ brand
Mercedes-Benz first presented its new product and technology
brand for electric mobility at the Paris Motor Show in 2016.
In mid-2019, the EQC (combined electricity consumption:
20.8 – 19.7 kWh/100 km; combined CO2 emissions: 0 g/km)1
became the first Mercedes-Benz vehicle to be launched under
the EQ brand name. With its seamless and clear design and
color highlights typical of the brand, the EQC is a trailblazer
when it comes to an avant-garde electric appearance, while it
embodies the design idiom of progressive luxury. In terms
of quality, safety and comfort, the EQC is the Mercedes-Benz
among electric vehicles and a car that makes a convincing
impression in terms of the sum of its attributes. The model
also boasts a highly dynamic performance, thanks to two elec-
tric motors at the front and the rear axle with a combined out-
put of 300 kW. The sophisticated operation strategy utilized for
the EQC enables an electric range of 445 to 471 km according
to the NEDC1. With Mercedes me, the EQ brand offers compre-
hensive services and makes electric mobility comfortable and
practical for everyone. At the same time, the EQC symbolizes the
start of a new mobility era at Daimler.
Series production of the EQC began in May 2019 at the
Mercedes-Benz plant in Bremen. The new EQC is being inte-
grated into current production operations as an all-electric
vehicle. The EQC is also now being produced for the Chinese
market by the German-Chinese production joint venture,
Beijing Benz Automotive Co. Ltd. (BBAC).
The EQC is part of a comprehensive electric offensive, as
Daimler plans to offer more than ten all-electric models in the
passenger car segment alone by 2022. In addition, the EQ
brand offers a comprehensive electric mobility ecosystem of
products, services, technologies and innovations.
Broad range of third-generation plug-in hybrid vehicles
Plug-in hybrids are a milestone on the road to zero-emission
driving. Under the label EQ Power, Mercedes-Benz Cars is
consistently forging ahead with the development of its plug-in
hybrid vehicles. The hybrid drive systems in models with a
1 Electricity consumption and range have been calculated on the basis of
Commission Regulation (EC) No. 692/2008. Electricity consumption and
range depend on vehicle configuration.
longitudinally installed engine – from the C-Class to the
S-Class and from the GLC to the GLE – represent the third
hybrid generation since the launch of the first hybrid vehicles
in 2009. The current electric motor was redesigned for the
9G-TRONIC plug-in hybrid transmission and operates accord-
ing to the principle of a permanently excited synchronous
motor as an internal rotor. The combination with new and sig-
nificantly improved power electronics here has led to a sub-
stantial increase in power and torque density. The intelligent,
route-based operating-mode strategy employed with the
hybrid systems utilizes the electric drive program that’s best
suited for a given route segment. This strategy takes into
account factors including map data, topography, speed limits
and traffic conditions for the entire planned route. In addition,
the ECO Assistant system coaches the driver and helps con-
serve fuel. By the end of 2019, we had launched models from
the compact-car family with the third-generation hybrid drive
system for the first time. The EQ Power for the A-Class- and
B-Class underscores the plug-in offensive launched by
Mercedes-Benz. By the end of 2019, Mercedes-Benz already
had more than ten plug-in hybrid models on offer – an attrac-
tive portfolio ranging from compacts to the Mercedes-Benz
S-Class flagship model. Our goal here is to offer our customers
well over 20 hybrid model variants by 2020.
Technology brand EQ: a comprehensive electric mobility
ecosystem
One of the components of the EQ technology brand is a com-
prehensive electric mobility ecosystem, which includes a holis-
tic range of consulting and other services and encompasses
everything from vehicle functions (e.g. adapted navigation sys-
tem) to the charging infrastructure. Mercedes me Charge
offers customers access to one of the world’s largest charging
networks with around 300,000 charging points and over 300
different operators of public charging stations in Europe alone.
Customers also benefit from an integrated payment function
with simple billing features. Mercedes me Charge also allows
customers to access the fast-charging stations operated by
the pan-European IONITY network. The network’s short charg-
ing times make for a pleasant journey, especially over long dis-
tances. IONITY plans to build and operate around 400 fast-
charging stations along the main traffic arteries in Europe by
the end of 2020. IONITY was established in November 2017
as a joint venture between the BMW Group, Daimler AG, Ford
Motor Company and the Volkswagen Group with Audi and
Porsche.
The Mercedes-Benz wallbox home unit with a charging capac-
ity of 11 kW makes it possible to charge EQ models much faster
than from a household socket. Mercedes-Benz also works with
market-specific charger installation partners to offer easy and
rapid installation of the Mercedes-Benz wallbox as well as pro-
fessional advice on all aspects of electric mobility. DC charging
via CCS (Combined Charging Systems) is even faster: CCS
charging stations in Europe have a maximum charging capacity
of 110 kW, which enables batteries to be charged from 10 to 80
percent SoC (State of Charge) in less than 45 minutes.
VISION EQS: milestone on the road to the future
At its presentation at the 2019 IAA International Motor Show,
Mercedes-Benz focused on the topic of sustainability as a
key component of its brand philosophy and an important ele-
ment of its corporate strategy. The VISION EQS show car
offers a preview of the large electric luxury sedans of the
future. With the Vision EQS, Mercedes-Benz is making a clear
C | THE DIVISIONS | MERCEDES-BENZ CARS 161
statement that perfect craftsmanship, emotional design, luxu-
rious materials and individual driving pleasure will continue
to be desirable attributes of automobiles in the future. With its
innovative stretched “one bow” proportion, the VISION EQS
takes the “Progressive Luxury” design philosophy of the EQ
vehicles from Mercedes-Benz to a new level. The flowing yet
powerful sculpture-like effect of the exterior design lends the
show car the appearance of luxurious generosity and aerody-
namic beauty united in perfect harmony.
World’s first electric vehicle with fuel cell and plug-in
hybrid technology delivered to selected customers
The Mercedes-Benz electric vehicle offensive also includes the
GLC F-CELL (combined hydrogen consumption: 0.91 kg/100
km, combined CO2 emissions: 0 g/km, combined electricity
consumption: 18 kWh/100 km)2. This SUV can run on electric-
ity as well as hydrogen because it is equipped with a lithium-
ion battery with plug-in hybrid technology in addition to its fuel
cell. Intelligent interplay between the battery and the fuel cell,
as well as short refueling times, make the GLC F-CELL a
dynamic and practical vehicle for long-distance travel. The first
GLC F-CELL vehicles were delivered to selected customers in
November 2018. Since the spring of 2019, additional business
and private customers have been able to experience the new
fuel cell technology by renting GLC F-CELL vehicles from
Mercedes-Benz Rent at one of the seven GLC F-CELL outlets
located throughout Germany. The GLC F-CELL is now available
for short-term and long-term rental from the premium rental
service from Mercedes-Benz.
The establishment of a full-coverage charging infrastructure is
crucial for the success of electric mobility in Germany.
Whether at home, at work, on the road, when shopping or at
high speed on the highway – a variety of ways already exist to
supply electric vehicles with power. Things also continue to
move ahead when it comes to hydrogen infrastructure. For
example, Daimler has drawn up a plan of action for hydrogen in
Germany together with its partners in the H2 Mobility joint
venture. During the year 2020, the network of hydrogen filling
stations will probably grow to about 100 stations. The partners’
long-term goal is to establish a network consisting of as many
as 400 hydrogen refueling stations. Similar infrastructure proj-
ects are being implemented in the rest of Europe, the United
States and Japan.
Mercedes-Maybach: perfection blended with exclusivity
Mercedes-Maybach stands for the highest levels of exclusivity
and individuality. The luxury brand, which was launched in
November 2014, combines the perfection of the Mercedes-
Benz S-Class with the exclusivity of a Maybach. The brand’s
first convertible was launched in the spring of 2017 in a limited
edition of 300 units. A preview of the form the luxury brand
might take in the future is offered by the concept cars Vision
Mercedes-Maybach 6 and Vision Mercedes-Maybach 6 Cabrio-
let – a sensational coupe and a luxurious convertible. Due to
the market success of our Mercedes-Maybach models, we plan
to make the range even more attractive in the coming years.
2 Figures for hydrogen consumption, CO2 emissions and electricity con-
sumption have been calculated on the basis of Commission Regulation
(EC) No. 692/2008.
smart has been offering an all-electric variant for each model-
series generation since 2007. Now smart is switching system-
atically to locally emission-free, battery-electric drive-system
technology. smart is the world’s first automobile brand to
switch from combustion engines to electric drive systems
across the board. The all-electric driving experience opens up
a new dimension of driving enjoyment: instantly available
torque, seamless acceleration – and nearly absolute silence as
well. smart offers a comprehensive charging concept for its
new electric models in order to make charging as easy as pos-
sible for drivers. If the optional 22 kW onboard charger with
fast-charging capability is used, the new models can be
recharged from 10% to 80% range in less than 40 minutes.
162 C | THE DIVISIONS | MERCEDES-BENZ CARS
Mercedes-AMG: the sports-car and high-performance brand
The brand claim of “Driving Performance” reflects the two core
competencies of Mercedes-AMG: the ability to provide an
unparalleled driving experience and the ability to serve as a
driving force in the high-performance segment. With more
than 70 models, the Mercedes-AMG sports-car brand
enhances the fascination of Mercedes-Benz and especially
attracts young and sporty customers to the brand with the
three-pointed star. This is also reflected by the development of
sales of Mercedes-AMG vehicles: In the year under review,
Mercedes-AMG set a new sales record by delivering more
than 132,000 vehicles to customers. This outstanding sales
growth was primarily driven by 13 new compact-vehicle vari-
ants in various output classes. These vehicles have expanded
the product range to include additional attractive entry-level
models for the driving performance segment. An all-new 2.0-
liter turbo engine – the world’s most powerful turbocharged
four-cylinder engine for series production vehicles – is used in
AMG’s most powerful compact models. The existing portfolio
of vehicles has also been expanded to include updated models
from the successful two-door AMG GT family and the GLC
series. In addition, Mercedes-AMG now offers additional elec-
tric vehicles equipped with integrated EQ Boost technology.
Here, a 16 kW (22 hp) starter-generator supplies power to the
48-volt on-board electrical system, and the unit’s boost effect
supports the combustion engine at low revolutions. The
starter-generator was presented for the first time in combina-
tion with the 4.0-liter V8 biturbo engine at the end of 2019.
smart model upgrade: groundbreaking, digital, urban
In September 2019 at the IAA International Motor Show in
Frankfurt smart celebrated the world premiere of its com-
pletely revamped fortwo and forfour models (smart EQ fortwo
with 4.6 kW onboard charger or optional 22 kW onboard char-
ger: combined electricity consumption: 16.5 –14.0 kWh/100 km,
combined CO2 emissions: 0 g/km. smart EQ fortwo cabrio
with 4.6 kW onboard charger or optional 22 kW onboard com-
bined charger electricity consumption: 16.8 –14.2 kWh/100 km,
combined CO2 emissions: 0 g/km. smart EQ forfour with
4.6 kW onboard charger or optional 22 kW onboard charger
combined electricity consumption: 17.3 –14.6 kWh/100 km, CO2
emissions combined: 0 g/km)1. Here, progressive design
meets intelligent connectivity and pure battery-electric drive
systems. As a result, the new smart fortwo coupe, convertible
and forfour models offer a sustainable and comprehensive
mobility concept. For the first time, the smart fortwo and for-
four have been given different exterior designs that create
a visual distinction between the two model series. In addition,
the future generation of the smart infotainment system will
enable seamless smartphone integration and thus offer custom-
ers their familiar digital user environment in the vehicle.
1 Electricity consumption and range have been calculated on the basis of
Commission Regulation (EC) No. 692/2008. Electricity consumption and
range depend on vehicle configuration.
EQ power: Mercedes-Benz electric, F-CELL and plug-in hybrid models.
The smart EQ Control app and smart “ready to” services have
also been further developed. In addition, an all-new user guid-
ance makes operating the services child’s play and turns any
smart into a true connected car. For example, customers can
use the smart EQ Control app to check their vehicle’s status
from any location via a smartphone or Apple Watch. The “ready
to” app also includes the “ready to share” digital service, which
offers private carsharing options and thus makes mobility in
cities more sustainable in general.
C | THE DIVISIONS | MERCEDES-BENZ CARS 163
Joint venture with Geely: further development of the smart
brand as a manufacturer of all-electric vehicles
At the end of March 2019, Daimler and the Zhejiang Geely
Holding Group reached an agreement to establish a 50-50
joint venture for the further development of the smart brand.
Under this agreement, the two partners will jointly design and
develop the next generation of smart electric models, which
will be manufactured in China for the world market. Global
sales are scheduled to begin in 2022. The joint venture will
exploit global synergies and economies of scale in order to
offer customers premium products of outstanding quality and
thus strengthen the smart brand’s position as a supplier of
electric vehicles.
164 C | THE DIVISIONS | MERCEDES-BENZ CARS
Expansion of activities in China
Sales of Mercedes-Benz brand cars in China totaled 694,200
units in the year under review (+2%), which means China was
Mercedes-Benz Cars’ largest single market for the fifth consec-
utive year in 2019. Around three fourths of the vehicles we sell
there were manufactured locally at facilities operated by our
Beijing Benz Automotive Co., Ltd (BBAC) joint venture with our
local partner BAIC. In view of the further growth potential
offered by the Chinese market, Daimler and BAIC announced
back in 2018 that they would jointly invest more than RMB 11.9
billion (approximately €1.5 billion) in a second BBAC produc-
tion facility in Beijing. The expansion of localization is to enable
Daimler to respond even more effectively to increasing market
demand by offering local models especially tailored to Chinese
customers’ needs, including electric vehicles from the
Mercedes-Benz EQ brand. The local presence of the Mercedes-
Benz brand in China is being continuously expanded with the
help of a broad portfolio that currently encompasses ten
locally manufactured cars and vans. The all-electric Mercedes-
Benz EQC off-road vehicle (power consumption combined:
20.8 –19.7 kWh/100 km; CO2 emissions combined: 0 g/km1,
has been manufactured in Beijing since the end of 2019.
Global production network – smart manufacturing
The Mercedes-Benz Cars division is continuously developing
its production network of more than 30 locations on four conti-
nents by implementing forward-looking smart manufacturing
methods. Here, innovative state-of-the-art technologies are
enhancing and safeguarding production quality, efficiency and
flexibility, while also offering effective support to workers at
our plants. “Factory 56” at the Mercedes-Benz plant in Sin-
delfingen is an impressive example of this. The factory of the
future is already a reality here. A completely new infrastructure
is being implemented in Factory 56. The entire production hall
has a Wi-Fi system and a mobile telephone network and com-
municates with its surroundings. The production hall is distin-
guished by its especially flexible and sustainable production
facilities with state-of-the-art Industry 4.0 technologies. For
example, the hall obtains its energy from CO2-neutral sources
that include a photovoltaic system installed on the roof. Fac-
tory 56 also creates a new modern world of work that focuses
on employees and takes their individual requirements even
more strongly into account than previously. Factory 56 will
serve as a blueprint for all future vehicle assembly operations
at Mercedes-Benz Cars worldwide.
The global production network is also being systematically
aligned with electric mobility. For example, electric vehicles
from the EQ product and technology brand are manufactured
within the framework of normal series production on the same
lines used to produce vehicles with conventional combustion
or hybrid drive systems. Production of the first all-electric vehi-
cle from the EQ product and technology brand is already under
way at the Mercedes-Benz plant in Bremen and at our BBAC
joint venture plant in Beijing. In parallel with this, a global bat-
tery production network is being established. This network
already comprises nine plants at seven locations on three con-
tinents. All in all, the company is investing more than €1 billion
C | THE DIVISIONS | MERCEDES-BENZ CARS 165
equipped with the new brand presence. By the end of 2019,
200 of these had already been opened. Plans call for 25 per-
cent of worldwide car sales to be processed by Mercedes-Benz
and its sales partners via online channels by 2025. The
Mercedes me ID is becoming the key component of the cus-
tomer experience, as it allows for very easy access to numer-
ous features and services. Mercedes-Benz created the basis
for the further development of sales operations in line with
current customer requirements back in 2013 when it estab-
lished “Best Customer Experience.” Since then, the company
and its retail partners have invested several hundred million
euros each year in its refinement around the globe.
Mercedes me – digital premium services in the vehicle
and beyond
The Mercedes me digital ecosystem – a key component for
shaping the future of Mercedes-Benz – is now available in
nearly 50 countries. Mercedes me consists of a wide range of
mobility-related digital services in and around the vehicle.
These services can be digitally accessed at any time using a
personal account, the Mercedes me ID. The average activation
rate of the Mercedes me service for new Mercedes-Benz vehi-
cles is over 90%. This shows how important it is to Mercedes-
Benz drivers that their cars are connected and that drivers
expect to enjoy all the digital services and offerings that such
connection makes possible. Highlights from the Mercedes me
range of services include the On-Street and Off-Street parking
display system with a parking payment service, the Live Traffic
Information real-time traffic service including car-to-x commu-
nication, Mercedes me in Car Store, and “Hey Mercedes” natu-
ral speech recognition with support from artificial intelligence.
Mercedes me services are also available for our EQ models –
or in some cases are being developed especially for them. They
include Mercedes me Charge for access to public charging sta-
tions in Europe, China and Japan which will soon be expanded
to other regions. In addition, the EQ Ready app helps drivers
decide whether it makes sense for them to switch to an elec-
tric vehicle or a hybrid model.
#ATeamComeTrue: sixth consecutive double title in the
Formula 1 series
The Mercedes-AMG Petronas Motorsport Formula 1 team cele-
brated another record-setting year in 2019 by becoming the
first racing team in the history of the Formula 1 series to cap-
ture both the World Constructors’ Championship and the World
Drivers’ Championship for six consecutive years. It takes
more than extraordinary drivers to achieve this type of suc-
cess; you also need to have the right combination of outstand-
ing technology and exceptional team spirit. In another develop-
ment, a new chapter in the 125-year history of motorsports at
Mercedes-Benz began in November 2019, when the Mercedes-
Benz EQ Formula E team made its debut in the Formula E rac-
ing series. Our participation in the all-electric Formula E series
enables us to demonstrate the performance capability of our
intelligent battery-electric drive systems, while also adding an
emotional component to the EQ brand. Mercedes-AMG Cus-
tomer Racing, with its more than 100 customer teams, can also
look back on a very successful season in 2019.
Whether with automated driving or new services:
connectivity and digitization play a crucial role.
in a global battery manufacturing network that is part of
Mercedes-Benz Cars’ global production network. Local produc-
tion of batteries is an important success factor for the electric
mobility offensive at Mercedes-Benz Cars, and also the crucial
element that enables us to meet the global demand for electric
vehicles flexibly and efficiently. Within the framework of its
electricity offensive, Mercedes-Benz Cars is not only focusing
on locally emission-free vehicles but is also moving ahead to
ensure sustainable and environmentally friendly production
operations worldwide. For example, plans call for production at
Mercedes-Benz Cars plants in Europe to be CO2-neutral by
2022.
Best Customer Experience 4.0
In July 2019, Mercedes-Benz presented the next chapter of its
“Best Customer Experience” global sales strategy. With “Best
Customer Experience 4.0,” Mercedes-Benz is systematically
aligning its sales activities with changing customer require-
ments in the digital age. “Best Customer Experience 4.0” is
designed to offer customers a seamless and comfortable expe-
rience of luxury whenever they would like to come into contact
with Mercedes-Benz – across all channels, at all times and
from any location. At the same time, physical sales via its
6,500 partners worldwide will remain indispensable for
Mercedes-Benz. For this reason, Mercedes-Benz is seamlessly
linking the physical sales channel with digital channels and
redesigning the former through the use of innovative store and
dealership concepts. Since the beginning of 2018, some 500
physical sales outlets worldwide have been planned or already
166 C | THE DIVISIONS | DAIMLER TRUCKS
Daimler Trucks
In a generally favorable market environment, Daimler Trucks achieved a return on sales of 6.1% in
the 2019 financial year (2018: 7.2%). This was partially due to lower unit sales and increased costs.
In the short to medium term, Daimler Trucks expects demand in its core markets in Europe and
the United States to continue to normalize, and this trend should continue until 2021. Around the
world, we have outstanding products, strong brands and technologies, and a clear strategy that
focuses on global market presence, global platforms, innovation leadership and sustainability. We
see our challenge in improving profitability while investing in the future, in order to utilize the
potential of truck markets that are changing but which offer long-term growth. We intend to gener-
ate global growth and earnings prospects especially in the market for heavy-duty trucks. In
addition, we see great long-term business potential in highly automated trucks (SAE Level 4) travel-
ing on highways between logistics hubs.
C.03
Daimler Trucks
€ amounts in millions
Revenue
EBIT
Return on sales (in %)
Investment in property,
plant, and equipment
Research and development
expenditure
thereof capitalized
Production
Unit sales
Employees (December 31)1
2019
2018
19/18
Change in %
40,235
2,463
6.1
38,273
2,753
7.2
971
1,105
1,490
53
481,946
488,521
83,437
1,295
40
524,846
517,335
82,676
+5
-11
.
-12
+15
+33
-8
-6
+1
1 Adjustment of the number of employees in 2018 due to changes in
the Group’s internal allocation of employees.
C.04
Unit sales Daimler Trucks
In thousands
Total
EU30
thereof Germany
United Kingdom
France
NAFTA region
thereof United States
Latin America (excluding Mexico)
thereof Brazil
Asia
thereof Japan
Indonesia
For information purposes:
BFDA (Auman Trucks)
Total (including BFDA)
2019
2018
19/18
Change in %
489
80
31
6
9
201
174
43
30
135
42
39
86
575
517
85
33
8
9
190
161
38
21
165
44
64
103
621
-6
-7
-4
-27
-1
+6
+8
+12
+39
-18
-4
-39
-17
-7
Lower unit sales and EBIT, stable revenue
Daimler Trucks sold 488,500 vehicles in 2019, achieving a vol-
ume slightly below that of the previous year (2018: 517,300).
The markets relevant for Daimler Trucks generally developed
very disparately. In the second half of the year, demand in
North America weakened significantly faster than expected, and
the European truck market contracted in the second half of
the year. These developments already had an impact on the
division’s earnings in the fourth quarter. Revenue of €40.2 billion
was above the prior-year level (2018: €38.3 billion). EBIT of
€2.5 billion was lower than last year (2018: €2.8 billion). Return
on sales also decreased to 6.1% (2018: 7.2%).
Unit sales 6% lower than in the previous year
Daimler Trucks achieved sales of 488,500 vehicles in 2019,
which is a slight decrease compared with the previous year
(2018: 517,300).
Over the year as a whole, the truck market in classes 6 to 8 in
the NAFTA region was still slightly above the high prior-year
level, although a weakening of demand was apparent in the
fourth quarter. Our sales of 201,100 trucks in the region were
once again slightly higher than the high prior-year number
(2018: 189,700). In classes 6 to 8, we had a market share of
37.0% (2018: 38.4%). We continued to maintain our market
leadership. The new Freightliner Cascadia with partially auto-
mated driving functions (SAE Level 2) had its world premiere
as a series-produced truck at the Consumer Electronics Show
(CES) in Las Vegas in January 2019. The system can indepen-
dently brake, accelerate and steer, and allows partially auto-
mated driving. In the future, customers in Australia and New
Zealand will also be able to operate the new Freightliner Cas-
cadia. The new model was presented to customers and
media representatives in Sydney in November. And with the
Detroit DD15 Gen 5 at the North American Commercial
Vehicle Show 2019 in Atlanta, Daimler Trucks presented for the
first time the latest generation of the globally applied heavy-
duty engine platform (HDEP). As of 2021, this engine is to be
available in the North American market in the class 8 segment.
On the basis of the global platform strategy, the next-
generation engines are planned to be used also in trucks of
the Mercedes-Benz sister brand.
C | THE DIVISIONS | DAIMLER TRUCKS 167
The new Mercedes-Benz Actros provides appropriate responses to
issues such as safety, fuel efficiency and availability with innovations
like the multimedia cockpit, mirror cams, further developed safety
systems and partially automated driving functions.
168 C | THE DIVISIONS | DAIMLER TRUCKS
We significantly increased our unit sales in Brazil, achieving
growth there of 39% compared with the previous year to sell
29,700 trucks. The market share of our Mercedes-Benz brand
trucks developed positively. In the medium- and heavy-duty
segment, we increased our market share to 29.2% (2018: 27.9%)
and achieved market leadership. In October 2019, the new
Actros from Brazilian production was presented at Fenatran,
one of the largest commercial-vehicle and transport trade
fairs in Latin America. The heavy-duty truck has been further
developed especially for the Latin American market and uses
technologies and platforms available worldwide, such as mirror
cams that replace rear-view and wide-angle mirrors and
help to enhance safety, vehicle handling and aerodynamics.
The new Actros is scheduled for market launch in 2020 and
will set new standards for efficiency, safety and connectivity.
In the EU30 region (European Union, Switzerland and Norway),
the truck market weakened perceptibly in the second half
of the year following the significant impact of purchases being
brought forward in the first half. Our total sales in the region
decreased slightly to 79,800 units (2018: 85,400). The
Mercedes-Benz brand maintained its market leadership in the
heavy- and medium-duty segment, although our market
share decreased to 20.0% (2018: 20.6%). Production of the new
Mercedes-Benz Actros started at the Wörth plant in May 2019.
One of the major new features of the Actros is Active Drive
Assist, with which Mercedes-Benz puts partially automated
driving in all speed ranges into series production. With the new
Actros, Mercedes-Benz shows the level of safety that is possible
on today’s roads. Since January 2020, this heavy-duty truck’s
standard equipment in Europe includes Active Brake Assist 5
(ABA 5), the latest generation emergency braking system
with pedestrian recognition. Truck journalists from 24 Euro-
pean countries voted the Mercedes-Benz Actros as “Interna-
tional Truck of the Year.” For this award, expert jurors evaluate
both technical innovations and further developments, as
well as innovations that have a direct influence on overall cost-
effectiveness, safety or environmental compatibility. The
award was presented at the international trade fair Road &
Urban Transport Solutions (Solutrans) in Lyon.
In Asia, demand for trucks in Indonesia and India clearly
declined during 2019, and our sales in the region also decreased
significantly to 135,200 units (2018: 164,700). This develop-
ment was particularly pronounced in Indonesia, where our unit
sales fell by to 39,100 vehicles (2018: 64,200). In India, we
sold 14,500 vehicles and were thus also significantly below the
high unit sales of the previous year (2018: 22,500). With the
BharatBenz brand, we achieved a market share of 5.8% (2018:
6.0%). Since the beginning of the export business, more than
25,000 export vehicles have been produced in India. The plant
in Chennai is an integral component of the worldwide produc-
tion network of Daimler Trucks & Buses. In the context of the
planned introduction of the new Bharat Stage VI emissions
standard, the plant is to gain further importance as a global
export hub. Trucks are then to be delivered to countries such
Fully electric with batteries and fuel cells: By the year 2039, Daimler
Trucks & Buses aims only to offer new vehicles that are locally
CO2-neutral in driving operation (tank-to-wheel) in its core markets
of Europe, Japan and the NAFTA region.
C | THE DIVISIONS | DAIMLER TRUCKS 169
as Mexico, Chile and Brazil, where comparable emission stan-
dards apply. In the Japanese truck market, we sold 42,200
units in the year 2019, slightly fewer than in the previous year
(2018: 44,000). Since October 2019, the FUSO Super Great
heavy-duty truck has been available with partially automated
driving functions (SAE Level 2).
Sales of 86,200 units of Auman trucks, which are produced
in China by our joint venture Beijing Foton Daimler Automotive
Co., Ltd. (BFDA), were significantly lower than the prior-year
volume (2018: 103,400). In the middle of the year, the new
Auman EST-A heavy-duty truck was launched in the Chinese
market with the locally produced Mercedes-Benz OM457
engine.
First trials of trucks with automated driving on public
roads
Daimler Trucks and Torc Robotics, a pioneer in the field
of autonomous driving, entered into a partnership last year to
market highly automated trucks (SAE Level 4) in the United
States. In this context, we acquired a majority interest in Torc
Robotics that we then placed into Daimler Trucks’ Autono-
mous Technology Group, in which all expertise and activities
relating to automated driving were brought together in June
2019. With the new unit, Daimler Trucks intends to bring highly
automated trucks (SAE Level 4) to market maturity within a
decade. The development sites of the global organization cur-
rently include Blacksburg and Portland in the United States
and Stuttgart in Germany. The development of software for
highly automated driving is one of the main areas of activity of
the Autonomous Technology Group. Another is a truck chassis
that is perfectly suited for highly automated driving and which
can contribute to enhanced reliability and safety through
the interaction between various systems. The infrastructure
and network for the operational use of such vehicles, which
will be set up by the Autonomous Technology Group, consists
of a main control center for the vehicles and additional stations
at the logistics nodes. Together with Torc Robotics, the devel-
opment and testing of highly automated trucks (SAE Level 4) on
defined routes on public roads began in Virginia, USA, in 2019.
With Detroit Assurance 5.0 featuring Active Lane Keeping Assist
in the new Freightliner Cascadia and with Active Drive Assist
in the new Mercedes-Benz Actros and the new FUSO Super Great,
we already put semi-automated driving functions into our
production vehicles in 2019. The new system can support the
driver in all speed ranges with braking, accelerating and
steering. This is based on the intelligent combination of radar
and camera information.
Supply agreement for global battery modules for
series-produced trucks
Daimler Trucks & Buses and the battery producer Contemporary
Amperex Technology Co. Limited (CATL) entered into a global
supply agreement for battery modules in 2019. CATL is a world
leader for the development and production of lithium-ion
batteries. The agreement relates to battery modules for trucks
170 C | THE DIVISIONS | DAIMLER TRUCKS
including the Mercedes-Benz eActros, Freightliner eCascadia
and Freightliner eM2. Daimler Trucks & Buses is responsible
for developing the battery systems and will also assemble
the battery packs at the Mercedes-Benz plant in Mannheim,
Germany, and at the US plant in Detroit, Michigan.
Electric trucks from all segments in customer use
The Mercedes-Benz eActros heavy-duty truck has been in
intensive customer use in the context of the eActros Innovation
Fleet since 2018. The aim is to achieve clean and quiet distri-
bution transport in urban areas, even with heavy-duty trucks,
from 2021 onwards. With the FUSO brand, Daimler continued
to gain experience with electric trucks in various markets
in 2019. The FUSO eCanter, for example, is in use with large
commercial customers such as Penske in the United States.
Fully electric light trucks are already in customer hands also
in important European markets such as Germany, the United
Kingdom, the Netherlands and Portugal, as well as in Japan.
The FUSO eCanter had its world premiere in September 2017
and has since then been delivered to numerous customers
worldwide. Data is currently being collected together with cus-
tomers and feedback is being given on the daily use of the
vehicle, route profiles and charging behavior. The FUSO eCanter
is produced in Kawasaki, Japan, and Tramagal, Portugal. And
at the 2019 Tokyo Motor Show, we presented the prototype of
the FUSO Vision F-Cell light-duty truck. This is FUSO’s con-
cept of an electric truck that uses power from a fuel cell as an
optional range extender. The first heavy-duty Freightliner
eCascadia started trials with customers in 2019. The US cus-
tomers Penske Truck Leasing and NFI Industries are testing
the eCascadia, having already started testing the medium-duty
all-electric Freightliner eM2 in the previous year. Findings
from the global practical tests will flow directly into the ongo-
ing development of the next generation of our worldwide
electric product portfolio.
E-consulting as an entry into electric mobility
Daimler Trucks & Buses’ E-Mobility Group is launching a
comprehensive ecosystem for e-transport logistics to enable
our customers to make the best possible entry into electric
mobility. This includes a comprehensive range of consulting
services and the development of a suitable charging infrastruc-
ture for electric trucks. In addition to personal and individual
advice, the modular service also includes digital applications
that make it easier to get started with e-mobility. The initial
focus will be on the European, North American and Japanese
markets.
Increasing role of data-based and connected services
In 2019, Daimler Trucks made progress with important devel-
opments in the field of data-based and connected services.
At the North American Commercial Vehicle Show 2019, Daimler
Trucks for the first time presented a dynamic leasing solution
that is focused on a truck’s operational performance: Dynamic
Lease is a pay-as-you-drive leasing service for trucks. The
leasing installments for a truck are based on the actual use of
the vehicle. In addition to a standard contractual basic fee, the
customer is only charged for the miles actually driven. Cus-
tomers in North America can use this telematics-based financ-
ing option as of the first quarter of 2020, initially for the new
Freightliner Cascadia with an integrated Detroit powertrain.
Together with partners, our developer engineers have been
working to enable trucks to communicate independently with
other machines and to carry out legally binding transactions
such as payments. In a pilot project in 2019, Daimler Trucks
experts created the required conditions for this with the newly
developed digital Truck ID and the related Truck Wallet.
Trucks can identify themselves to other machines with the
Truck ID as if with a built-in identity card, and can sign for pro-
cesses unambiguously. Truck Wallet functions as a platform
technology and central user program for all applications that
access Truck ID and use it for various purposes. Truck ID and
Truck Wallet, which are both still in the prototype stage, are
stored as software programs in a cryptographic processor.
The processor is part of Truck Data Center, the central telemat-
ics control unit of the new Mercedes-Benz Actros.
Anyone who gets behind the wheel of a new Actros or Arocs
with Multimedia Cockpit Interactive is just a click away from
a fully connected world of vehicles, drivers and logistics:
Starting last year, the new Actros and the new Arocs offer an
open platform for the use of apps. When purchasing a truck
with Multimedia Cockpit Interactive, the customer not only
acquires a vehicle, but also gains access to the Mercedes-Benz
Truck App Portal. This can then be used for the customer’s
entire fleet, including third-party vehicles. Previously, new hard-
ware and software usually had to be installed in the cab to
put fleet-management or transport-management systems into
a truck.
C | THE DIVISIONS | MERCEDES-BENZ VANS 171
C | THE DIVISIONS | MERCEDES-BENZ VANS 171
Mercedes-Benz Vans
Mercedes-Benz Vans continued along its growth path during the year under review and set a new
record for unit sales. Revenue was also higher than in the previous year. Growth at the division was
mainly driven by our new Mercedes-Benz Sprinter. Our future-oriented “adVANce” initiative has
allowed us to move ahead with the transformation of Mercedes-Benz Vans from a successful global
van manufacturer into a supplier of holistic system solutions for transportation and mobility. At
minus €3.1 billion, EBIT was significantly lower than the figure for the previous year. This development
was due to numerous special items that had a substantial impact on the division’s earnings.
New record for unit sales
Mercedes-Benz Vans set a new sales record once again in
financial year 2019, with an increase of 4% on the previous year’s
figure to 438,400 units. At €14.8 billion, revenue was also
higher than in the previous year (2018: €13.6 billion). EBIT was
minus €3,085 million, which was significantly lower than in
the previous year (2018: plus €312 million). This decline was
primarily due to governmental and court proceedings and
measures relating to Mercedes-Benz diesel vehicles, as well as
a review and prioritization of the product portfolio. The return
on sales amounted to -20.8% (2018: +2.3%).
Continued growth
Mercedes-Benz Vans’ products continued to be very successful
in 2019. Our Sprinter, Vito and Citan vans are tailored mainly
to commercial customers, while the V-Class is designed primar-
ily for private use. The X-Class is targeted at a variety of both
private and commercial customers.
Sales of 298,100 units in the EU30 region, our core market,
were slightly higher than in the previous year (2018: 278,300).
We sold 121,300 units in Germany in the year under review
(2018: 107,300). Mercedes-Benz Vans continued to grow also in
the NAFTA region, where sales increased by 11% to 56,500 units.
This included a new record of 45,700 vans sold in the United
States (2018: 38,700).
At 18,600 units (2018: 18,700), sales in Latin America were at
the same level as in the previous year. At 29,500 units (2018:
29,100), sales in China were also at the prior-year level. Unit
sales declined significantly from the previous year’s figures in
Russia and in the difficult market environment in Turkey.
At 231,500 units, global sales of Sprinter models were signifi-
cantly higher than in the previous year (2018: 206,300). Sales of
vans in the mid-size segment remained at the prior-year level,
totaling 172,400 units in 2019 (2018: 172,200), while sales of
Vito models amounted to 109,300 units in the year under
review (2018: 108,300). We sold 63,100 V-Class multipurpose
vehicles in 2019 (2018: 63,900). Meanwhile, sales of the
Mercedes-Benz Citan reached 20,700 units (2018: 26,300).
X-Class sales totaled 13,800 units in the year under review
(2018: 16,700).
C.05
Mercedes-Benz Vans
€ amounts in millions
Revenue
EBIT
Return on sales (in %)
Investment in property,
plant and equipment
Research and development
expenditure
thereof capitalized
Production
Unit sales
Employees (December 31)1
2019
2018
19/18
% change
14,801
-3,085
-20.8
240
543
96
13,626
312
2.3
468
666
176
425,887
438,386
21,346
440,314
421,401
21,810
+9
.
.
-49
-18
-45
-3
+4
-2
1 Adjustment of the number of employees in 2018 due to changes in
the Group’s internal allocation of employees.
C.06
Unit sales Mercedes-Benz Vans
Total
EU30
thereof Germany
NAFTA
thereof United States
Latin America
(excluding Mexico)
Asia
thereof China
Other markets
2019
2018
19/18
% change
438,386
298,056
121,296
56,470
45,654
18,638
38,562
29,450
26,660
421,401
278,269
107,267
50,851
38,741
18,735
38,779
29,068
34,767
+4
+7
+13
+11
+18
-1
-1
+1
-23
172 C | THE DIVISIONS | MERCEDES-BENZ VANS
The new Mercedes-Benz V-Class
The upgraded V-Class had its world premiere at the beginning
of 2019. The Mercedes-Benz multipurpose vehicle now has
a redesigned front end that is even more stylish and dynamic
than before. With the introduction of the OM654 four-cylinder
diesel engine, the 9G-TRONIC automatic transmission, which
is now available for the first time, and upgraded safety and
assistance systems including Active Brake Assist, the V-Class
is equipped with state-of-the-art technology. The update
has also benefited the camper vans from the Marco Polo family
that are based on the V-Class. We started series production
of the new V-Class at the Mercedes-Benz plant in Vitoria
(Spain) in May 2019.
Decision on the successor model to the Citan small van
Mercedes-Benz will systematically continue its engagement in
the small-van segment in cooperation with the Renault-Nissan-
Mitsubishi Alliance, and the brand has also now decided on
the successor model to its Citan urban delivery van, which has
been available since 2012. Plans also call for an all-electric
version to be added to the Mercedes-Benz Vans portfolio.
Future-oriented “adVANce” initiative
With its future-oriented “adVANce” initiative, Mercedes-Benz
Vans is evolving from a manufacturer of globally successful
vans into a provider of holistic system solutions for transporta-
tion and mobility. The division is thus a pioneer of its sector.
adVANce combines activities in various areas and comprises
six innovation fields: digital@Vans, solutions@Vans, rental@
Vans, sharing@Vans, eDrive@Vans and autonomous@Vans. We
are employing a customer-oriented co-creation approach to
involve our customers in the development process at an early
stage. Here, we are combining our six innovation fields in order
to develop new business models and tailored solutions that
are adapted to our customers’ respective sectors.
eDrive@Vans played a major role in our activities in 2019.
For example, Mercedes-Benz Vans presented the Concept EQV
at the Geneva International Motor Show in March. This was
followed in August by the world premiere of our first battery-
electric multipurpose vehicle in the premium segment: the
Mercedes-Benz EQV (combined electricity consumption:
27.0 kWh/100 km; combined CO2 emissions: 0 g/km, prelimi-
nary figures)1. The second member of the EQ family combines
locally emission-free mobility with impressive driving perfor-
mance, a range suited to today’s needs, fast charging, out-
standing functionality and aesthetic design. Technical highlights
include a range of up to 405 kilometers1 and fast charging
of the vehicle’s high-voltage battery from 10 to up to 80% in less
than 45 minutes. The Mercedes-Benz EQV also offers exten-
sive interior comfort and a high degree of flexibility. The EQV is
a series-produced vehicle that is fully integrated into normal
production operations at our plant in Vitoria in northern Spain,
where the V-Class and Vito are also built. This arrangement
allows flexible and synergistic production that can accommo-
date fluctuations in customer demand. One of the components
of the EQ technology brand is a comprehensive electric
mobility ecosystem, which the Mercedes-Benz EQV benefits
from as the youngest member of the EQ family. This ecosystem
includes a holistic range of consulting and other services
and encompasses everything from vehicle functions (e.g. an
adapted navigation system) to an effective charging infra-
structure. Series production of the eSprinter began at the end
of 2019 at the Mercedes-Benz plant in Düsseldorf.
1 Figures for electricity consumption and range are provisional and were
determined by the technical service for certification according to UN/ECE
Regulation 101. EC type approval and certification of conformity with
official figures are not yet available. There may be differences between the
stated figures and the official figures.
Mercedes-Benz EQV (combined electricity consumption: 27.0 kWh/100 km; combined CO2 emissions: 0 g/km, preliminary figures)1
C | THE DIVISIONS | MERCEDES-BENZ VANS 173
A revolutionary mobility concept as a response to questions
of the future: At the Consumer Electronics Show (CES) in Las
Vegas in January, Mercedes-Benz Vans presented Vision
URBANETIC, a concept van that opens up new perspectives for
autonomous driving. Vision URBANETIC is designed to
enable the needs-based, sustainable and efficient movement
of people and goods, and it also meets the needs of cities,
companies from a wide range of industries, and travelers and
commuters in innovative ways. This visionary concept is
based on an autonomously driving, electrically powered chassis
that can be fitted with various bodies for transporting either
passengers or goods. The fully connected vehicle is part of an
ecosystem in which the mobility wishes of logistics companies,
local public transport operators and private customers are
transmitted digitally. All of this creates new possibilities for the
efficient utilization of resources.
older fleet vehicles to use Mercedes PRO connect services and
thus benefit from the innovative world of connectivity. Mercedes-
Benz Vans Rental specializes exclusively in vans and offers its
customers maximum flexibility with respect to vehicle changes
and return times at around 120 stations at present. The van
rental fleet covers the entire range of Mercedes-Benz Vans prod-
ucts with a mix of standard and sector-specific vehicles. These
include the all-electric eVito, in addition to a large number of
rental vehicles with special bodies for the transport of passen-
gers and goods. Efficient material logistics is a key success
factor for service technicians in particular. “In-Van Delivery &
Return” allows dispatchers and service technicians to easily
assign material logistics tasks to professional logistics compa-
nies. The latter can then deliver required parts and compo-
nents directly to a van at night for use the next day – and can
also pick up materials that are no longer needed.
In addition to manufacturing our products, we create digital
services for and with our customers. We also work continuously
to develop forward-looking innovations that will enable in the
future us to meet increasing transport requirements faster and
more efficiently, and in a more environmentally friendly man-
ner. To this end, the digital@Vans initiative at Mercedes-Benz
Vans has been developing digital solutions for various busi-
ness sectors; Mercedes-Benz Vans presented a range of related
services in October 2019. Here, Mercedes PRO serves as the
umbrella brand for all digital and non-digital services and solu-
tions for daily business operations. Mercedes PRO connect
for vehicle fleets optimizes communication between fleet man-
agers, vehicles and drivers. This connectivity solution makes
it possible to manage assignments online and call up vehicle
status information such as location, fuel levels, and mainte-
nance intervals in nearly real time. A new feature here is the
possibility of integrating the Mercedes PRO adapter into the
system world of Mercedes PRO connect. The Mercedes PRO
adapter is our compact hardware solution that also allows
With its Onboard Logic Unit (OLU), Mercedes-Benz Vans has
developed an innovative control unit for the transport sector.
The OLU enables effective interaction between hardware
and software. Among other things, it connects vehicles to the
cloud, thereby enabling a high degree of flexibility and the
establishment of links between different functions. This simpli-
fies technical access and the management of live vehicle
data – even for users without any vehicle-specific or technical
expertise. In turn, this makes it possible for third parties to
develop applications more quickly and easily and to implement
them in vehicles. In order to ensure the security of systems
and data, these applications are provided only for specific func-
tions and cannot be used for any other purpose.
Various major orders received
Electric mobility is also becoming increasingly important in
large fleets that are used for passenger transportation. This
fact is confirmed by the various major orders Mercedes-Benz
Vans received in the year under review. In Hamburg, for exam-
ple, the first of 20 eVito series-production vans and eSprinter
pilot vehicles were delivered to Hermes Germany in February
2019. Hermes is Mercedes-Benz Vans’ first major business
customer to begin using electric commercial vehicles across
the board. The “BerlKönig” on-demand ride-pooling service,
which is offered by ViaVan and Berlin’s BVG public transport
company, has been operating the eVito Tourer in its fleet
since July 2019. Mercedes-Benz Vans also received a major
order from the Netherlands for 80 eVito Tourers (electricity
consumption in the combined test cycle: 24.2 – 20.2 kWh/
100 km; combined CO2 emissions: 0g/km)2. ISS Communica-
tion Services GmbH ordered 225 Mercedes-Benz Vito vans,
which it will use for maintenance operations on the mobile-
phone network throughout Germany. ROM Technik (Rudolf
Otto Meyer Technik GmbH & Co. KG) will operate a new fleet
of approximately 480 Mercedes-Benz vans all across Germany
in the future. The first of these vehicles were handed over to
the company at the Mercedes-Benz Commercial Vehicles Cen-
ter in Bremen in July. In October 2019, Schlienz-Tours GmbH &
Co. KG, an expert for regular service bus operation and coach
tours, took delivery of the first of what will be a fleet of
105 Mercedes-Benz Vito, Sprinter, V-Class and eVito vehicles.
2 Electricity consumption was determined on the basis of Directive
692/2008/EC. Electricity consumption is dependent on vehicle
configuration, in particular on the selected maximum speed limitation.
174 C | THE DIVISIONS | DAIMLER BUSES
Daimler Buses
In 2019, business developments at Daimler Buses benefited from growing demand and increased
unit sales in key markets. Our unit sales and revenue continued to increase in this environment and
the division’s EBIT was slightly above the prior-year level. As the market leader in its most important
traditional core markets, Daimler Buses focuses on future-oriented and sustainable city and intercity
buses and touring coaches, as well as bus chassis. Its portfolio also includes innovative mobility
solutions. In 2019, Daimler Buses was once again well positioned as a future-oriented manufacturer
with technologically leading products such as the eCitaro, new digital services such as OMNIplus
ON, and a strong and enhanced production network. Such products and services make an important
contribution to sustainable passenger transport and the further development of public transporta-
tion systems.
C.07
Daimler Buses
€ amounts in millions
Revenue
EBIT
Return on sales (in %)
Investment in property,
plant and equipment
Research and development
expenditure
thereof capitalized
Production
Unit sales
Employees (December 31)1
2019
2018
19/18
% change
4,733
4,529
283
6.0
134
203
23
265
5.9
144
199
41
32,257
32,612
17,960
31,233
30,888
17,729
+5
+7
.
-7
+2
-44
+3
+6
+1
1 Adjustment of the number of employees in 2018 due to changes in
the Group’s internal allocation of employees.
C.08
Unit sales Daimler Buses
Total
EU30
thereof Germany
Latin America
(excluding Mexico)
thereof Brazil
Mexico
Asia
Other markets
2019
2018
19/18
% change
32,612
30,888
9,283
3,041
15,646
11,394
2,627
3,400
1,656
9,284
2,902
13,681
8,778
3,236
3,172
1,515
+6
-0
+5
+14
+30
-19
+7
+9
Slight increase in unit sales
Daimler Buses sold 32,600 buses and bus chassis worldwide
in financial year 2019 (2018: 30,900). The slight increase was due
in particular to the noticeable recovery of the market in Brazil,
ongoing strong demand in our important EU30 market and sub-
stantial sales growth in Argentina. A market-related decrease
in demand in Turkey had a negative impact on our unit sales. The
division was able to maintain its market leadership in its most
important traditional core markets (EU30, Brazil, Argentina and
Mexico). Revenue increased by 5% to €4.7 billion and EBIT
of €283 million was slightly higher than in the previous year
(2018: €265 million). Return on sales was 6.0% (2018: 5.9%).
Varied business development in the core regions
In the EU30 region, the Daimler Buses brands Mercedes-Benz
and Setra offer a complete range of city buses, intercity buses
and touring coaches, as well as bus chassis in certain markets.
Due to continued high demand for our complete buses, sales
in this region amounted to 9,300 units, which equaled the high
figure recorded in the prior year (2018: 9,300). Daimler Buses
defended its leading market position in the EU30 region with a
market share of 27.5% (2018: 29.0%). At 3,000 units, sales in
Germany were 5% higher than in the previous year. However,
sales in Turkey were significantly lower than in the previous
year (2018: 300) due to the country’s economic situation, which
remains difficult. The market situation in Latin America
(excluding Mexico) improved further on account of the notice-
able market recovery in Brazil. Sales of Mercedes-Benz bus
chassis in Brazil rose by 30% to 11,400 units. We were able to
strengthen our leading market position in Brazil with a market
share of 53.8% (2018: 51.6%). Sales of 1,600 units in Argentina
were significantly above the prior-year level (2018: 1,300),
despite a significantly contracting market in the country. We
sold 1,600 units in India, thus equaling the previous year’s
sales (2018: 1,600). Sales of 2,600 units in Mexico were signifi-
cantly lower than in the previous year (2018: 3,200).
C | THE DIVISIONS | DAIMLER BUSES 175
C | THE DIVISIONS | DAIMLER BUSES 175
The all-electric Mercedes-Benz eCitaro offers municipalities and transportation
companies the option of changing over their fleets to locally emission-free operation.
176 C | THE DIVISIONS | DAIMLER BUSES
Complete e-mobility system from Daimler Buses offers
practical public transport solutions
Daimler Buses offers its customers tailor-made solutions for
locally emission-free public transport by providing them with a
complete system for electric mobility that consists of the
Mercedes-Benz eCitaro and a broad range of consulting services.
The battery-electric Mercedes-Benz eCitaro, which has been
manufactured in series production at the Mannheim plant since
2018, offers cities and transport companies the possibility
of converting their fleets to locally emission-free operation. The
battery-powered city bus therefore stands for environmentally
friendly public transport and helps to improve air quality, and
thus the quality of life, in urban areas.
The orders received for the eCitaro already number in the
hundreds, which demonstrates the high level of customer
acceptance of the electric bus. As a result, in 2019, Daimler
Buses received a number of major orders for the Mercedes-
Benz eCitaro, such as those comprising 56 units for Wiesbaden,
48 for Hanover, 27 for Aachen and 25 for Hamburg. The first
orders from European cities outside Germany for the battery-
electric eCitaro buses were also received. Today, eCitaro
buses are already in regular service in cities including not only
Berlin and Hamburg but also Oslo, Ystad (Sweden) and
St. Gallen (Switzerland).
We plan to continuously refine the eCitaro in order to make
the bus even more practical for regular service operation in cities.
Depending on its intended use, the eCitaro can currently
be ordered with as many as 12 battery packs. This results in a
range of up to 170 kilometers in typical city driving conditions
on a single battery charge. A further model variant of the
eCitaro – an articulated bus that can accommodate up to 145
passengers – will be launched in 2020. Plans have already
been made to convert the eCitaro to the use of new technolo-
gies such as powerful lithium-ion batteries and solid-state
batteries in the coming years.
Because the electrification of bus fleets requires transport
companies to make major changes, Daimler Buses’ overall
e-mobility system also includes a comprehensive customer-
advisory approach. More specifically, the e-Mobility Con-
sulting team defines individual operation scenarios by taking
into account route length, passenger volume, energy require-
ments, range calculations and charging management, among
other things. Customers receive service support as well –
in the form of eco-training courses for drivers, for example.
Range extension by means of fuel cells is being funded by
a national innovation program
Daimler Buses is making use of an intelligent combination of
batteries and fuel cells as it continues to develop the battery-
electric Mercedes-Benz eCitaro city bus. This will enable
the vehicle range to be further increased by using a fuel cell to
generate electricity from hydrogen stored onboard the vehicle.
The development of this technology is being funded by the
German Federal Ministry of Transport and Digital Infrastructure
within the framework of the Hydrogen and Fuel Cell Technol-
ogy National Innovation Program. The objective of the program
is to support the market launch of initial products needed
for the implementation of hydrogen and fuel-cell systems in
various application areas.
Launch of online shop for bus spare parts
OMNIplus ON, the digital service portal from Daimler Buses,
has launched its integrated online shop for replacement
bus parts. The new OMNIplus eShop offers the entire range of
parts for the Mercedes-Benz and Setra brands. In addition,
because the system is fully incorporated into the OMNIplus ON
customer portal, it already knows the specific fleet belonging
to the person or company that places an order.
Numerous major orders received
Daimler Buses received a large number of major orders in the
year under review. In Poland, for example, Daimler Buses
was able to sign contracts for delivery of 48 Mercedes-Benz
Citaro city buses to Gdańsk and 50 Citaro G articulated
buses to Wrocław. A transportation company in Austria took
delivery of 64 Mercedes-Benz city buses for the Vienna
metropolitan area. The EMT Madrid transport company in the
Spanish capital is already successfully operating several
hundred Mercedes-Benz Citaro NGT buses equipped with gas-
eous-fuel drive systems. This number is to be increased
through an additional major order for up to 672 environmen-
tally friendly city buses in 2020. During the year under
review, Daimler also received a major order from Bucharest,
Romania for a total of 130 low-floor Citaro hybrid city
buses. The city of Essen in Germany renewed its city bus fleet
with the purchase of 45 Citaro hybrid buses, while the city
of Trier signed an agreement for delivery of 90 Mercedes-Benz
Citaro city buses. Daimler Buses also began fulfilling a
major order for Hamburg by delivering the first of a total of 60
CapaCity L buses to the city. Daimler Buses also obtained
major orders in other markets around the globe, including an
order for 44 Euro VI chassis for delivery to Sydney, Australia.
Daimler Buses is to deliver a total of 147 buses to Montevideo,
the capital city of Uruguay, by the end of 2020. Finally, the
Bus Rapid Transit System in Santiago de Chile placed a major
order with Daimler Buses for delivery of 490 buses to the
Chilean capital.
Award-winning products from Daimler Buses
Two models from Daimler Buses received an ETM Award in the
2019 readers’ survey conducted by the EuroTransportMedia
(ETM) commercial vehicles publishing company. The Mercedes-
Benz eCitaro and the Mercedes-Benz Citaro LE/Ü/hybrid
captured first place in the electric bus and intercity bus cate-
gories, respectively. The battery-electric Mercedes-Benz
eCitaro, the Mercedes-Benz Citaro hybrid and the Setra Top-
Class S 531 DT double-decker bus were all selected by the
jury for the “internationaler busplaner Nachhaltigkeitspreise”
(International ‘Busplaner’ Sustainability Awards) as the
best buses in their respective categories. Daimler Buses was
also presented with three awards at the Busworld Europe
international bus show in Brussels. The eCitaro received the
“Sustainable Bus Award 2020 ” in the “Urban” category
from an international jury, which also awarded the Setra S 531
DT double-decker bus and the Mercedes-Benz eCitaro
the “Comfort Label.” In addition, the Mercedes Benz eCitaro
achieved an outstanding second-place finish in the “BEST
OF mobility 2019 ” readers’ survey.
C | THE DIVISIONS | DAIMLER MOBILITY 177
Daimler Mobility
The number of cars and commercial vehicles financed or leased by Daimler Mobility reached a new
all-time high of more than 5.4 million at the end of financial year 2019. New business and contract
volume developed positively, while EBIT amounted to €2,140 million. The latter figure includes
effects from the consolidation of the mobility services of the Daimler Group and the BMW Group.
Since they were established, the mobility joint ventures have developed a strong customer base
and had more than 90 million customers at the end of 2019. Daimler Mobility expects the combi nation
of sales financing with brokered automotive insurance policies to continue gaining importance.
In addition, we aim to utilize new market potential as a result of our greater efficiency in traditional
sales channels and the digitization of customer contact systems and fleet management operations.
Half of all Daimler vehicles delivered to customers are
financed or leased
Daimler Mobility concluded 2.0 million new financing and leas-
ing contracts worth a total of €74.4 billion in 2019. The total
value of all new contracts was thus slightly above the prior-year
level (+3%). About half of all new-vehicle sales by our auto-
motive divisions in 2019 were supported by sales financing from
Daimler Mobility. In total, more than 5.4 million financed or
leased vehicles were on the books at the end of 2019 with a
total contract volume of €162.8 billion; this represents a 6%
increase compared with the end of 2018. Adjusted for exchange-
rate effects, contract volume increased by 4%. EBIT amounted
to €2,140 million (2018: €1,384 million). The division’s return
on equity was 15.3% (2018: 11.1%). C.09
Europe region: new business slightly higher than in 2018
Daimler Mobility concluded 978,000 new financing and leasing
contracts worth €32.5 billion in the Europe region (+2%). New
business developed especially well in Switzerland (+27%) and
Spain (+8%). In Turkey, new business decreased sharply (-50%)
due to the ongoing difficult economic situation in that country.
In Germany, Mercedes-Benz Bank’s new business remained
stable at €13.3 billion (+1%). Daimler Mobility’s total contract
volume in Europe rose by 5% to €67.2 billion. A total of 425,000
contracts were on the books at Athlon and Daimler Fleet
Management in Europe at the end of 2019. This corresponds to
a contract volume of €7.0 billion.
Significant growth in the Americas region
Daimler Mobility brokered 492,000 new financing and leasing
contracts worth €24.4 billion in the Americas region in 2019
(+9%). The volume of new business developed very positively in
the United States (+9%). Contract volume in the Americas of
€59.6 billion at December 31, 2019 was 6% higher than at the
end of 2018.
Africa & Asia-Pacific region and China: new business at
prior-year level
With a volume of €8.3 billion, new business in the Africa &
Asia-Pacific region (excluding China) remained more or less at
the prior-year level (+2%). Business growth was especially
strong in South Africa (+21%) and Japan (+10%). New business
decreased significantly in Australia (-9%). At the end of 2019,
contract volume in the Africa & Asia-Pacific region (excluding
China) amounted to €19.5 billion, representing a slight increase
of 7% over the previous year. New business decreased moder-
ately in China, however, where we concluded 310,000 new
leasing and financing contracts and financing contracts worth
€9.2 billion in 2019 (-4%). At the end of 2019, contract volume
in China amounted to €16.5 billion – an increase of 7% com-
pared with the end of 2018.
Further growth in the insurance business
Daimler Mobility brokered approximately 2.4 million insurance
policies in 2019 – an increase of 5% compared to the prior
year. Business developments were particularly positive in China
(+23%), Germany (+2%) and Russia (+13%). The focus of the
insurance sales is on the digitization of the dealer and customer
interfaces and of the operational processes for further growth.
C.09
Daimler Mobility
€ amounts in millions
2019
2018
19/18
% change
Revenue
EBIT
Return on equity (in %)
New business
Contract volume
Investment in property, plant
and equipment
28,646
26,269
2,140
15.3
1,384
11.1
74,377
71,927
162,843
154,072
87
64
Employees (December 31)
12,680
14,070
+9
+55
.
+3
+6
+36
-10
178 C | THE DIVISIONS | DAIMLER MOBILITY
Daimler Financial Services AG renamed
Daimler Mobility AG
On July 23, 2019, Daimler Financial Services AG began operat-
ing under the name Daimler Mobility AG, acting as the provider
of services in the fields of financing, leasing, insurance and
fleet management for the entire Daimler Group. In addition, the
Daimler Mobility division is a strategic investor in the mobility
services of the YOUR NOW joint venture network such as ride
hailing, multimodal platforms, car sharing, parking and charg-
ing. The mobility ecosystem is rounded out by flexible-use
services from Daimler Mobility such as Mercedes-Benz Rent
(rental vehicles) and Mercedes me Flexperience (a car-on-
demand solution).
MBUX system or the Mercedes me app. After the driver leaves
the parking space, the actual parking fee is shown on the
MBUX display and payment is made to the parking garage
operator via Mercedes pay. In addition, drivers can use
the Mercedes-Benz parking card to digitally register their entry
into and exit from selected parking garages throughout Ger-
many by means of an RFID chip. This eliminates the frequent
need to maneuver the vehicle around in order to grasp the
parking ticket, as well as the need to walk to an automated pay
station. Users of Daimler’s Bertha app can also compare
fuel prices and pay for fuel at approximately 400 selected fuel
stations in Germany via smartphone. Mercedes pay provides
the integrated payment solution for the app.
Mobility “from years to minutes”
With its three core activities of financial services, fleet
management systems and digital mobility solutions, Daimler
Mobility is able to meet a broad range of customer require-
ments for everything from multi-year financing, leasing, and
insurance contracts to flexible fleet management services
and mobility on demand solutions such as car sharing. Daimler
Mobility offers its customers mobility solutions for a period
of several years or just for a few minutes – “from years to min-
utes” as we put it.
CoverOn: new short-term insurance for greater mobility
Daimler Insurance Services has developed a new digital insur-
ance solution that serves as a component of personal mobility.
CoverOn allows policyholders to temporarily insure additional
drivers of a vehicle for a short period in a fast and easy way.
The period of cover can range from 30 minutes to 27 days. The
package includes CoverOn roadside assistance, which offers
customers assistance in the event of a breakdown. The insur-
ance purchase and payment processes are completely digital –
all it takes is a smartphone.
New app enables paperless purchase of vehicle insurance
Mercedes-Benz Bank also continues to move ahead with
the digitization of the customer experience. A newly developed
bank app makes it possible for dealerships and licensed
Mercedes-Benz partners to issue insurance policies for
Mercedes-Benz cars and vans in a completely paperless process.
The app takes customers and dealership staff step by step
through the application process, in which customers only have
to provide basic information. The app quickly and conveniently
generates a quote, which also contains a QR code that
Daimler Mobility AG and Geely Technology Group
have started StarRides, a premium ride-hailing service,
in the Chinese metropolis Hangzhou.
Our range of financial services includes financing, leasing, and
insurance. Our goals are to increase demand for the Group’s
brands and to strengthen customer loyalty. During the year
under review, our financial services business focused on the
digitization of the customer experience and the optimization of
structures and processes. To this end, Daimler Mobility
established four regional competence centers (Digital Solution
Centers) in Stuttgart, Beijing, Farmington Hills (United States)
and Singapore. These centers are responsible for meeting the
various requirements of our customers and our automotive
divisions, and for moving ahead with the systematic digitization
of our financial services operations. More than 40 agile project
teams developed approximately 50 new products in 2019. One
project involved the development of a new scalable customer
portal that has already been launched in 12 European markets.
Numerous new digital self-service functions, such as auto-
matic user registration, new contract overviews, and installment
and term reductions have significantly increased both cus-
tomer satisfaction and our own efficiency. Daimler Mobility
also continues to consistently move ahead with the digitization
of business processes in China. For example, the share of
paperless processing of credit applications has now reached
92% in the Chinese market. In addition, the integrated online
self-service portal for WeChat is now being used by as many
as 100,000 customers per month.
Mercedes pay: expansion of e-payment activities
During the year under review, Daimler Mobility’s global e-pay-
ment competence center developed additional solutions for
payment processing and also integrated the Daimler Group’s
Mercedes pay digital e-payment platform into numerous Group
applications. Mercedes pay manages payments made via the
MBUX multimedia system from Mercedes-Benz. The fee-based
Mercedes me connect services that are integrated into the
MBUX system, such as in-car office functions (including auto-
matic dial-up into conference calls and updating of appoint-
ment calendars), can be purchased using Mercedes pay, which
can also be utilized to renew expired services. Mercedes pay
makes paying parking fees much more convenient as well.
Drivers can launch the parking payment process via the in-car
the dealership and the customer can use to access the policy
information at a later time. If the customer chooses to
purchase insurance, the subsequent transaction is also com-
pletely digital.
Dynamic Lease: a telematics-based financing option
Daimler Mobility has launched a new truck-leasing solution:
Dynamic Lease makes it possible for the first time to use
telematics systems to record the actual distance driven by a
truck. This in turn enables leasing rates for customers to be
precisely aligned with their actual use of the vehicle. In con-
ventional truck leasing, customers need to estimate their
total mileage over the leasing period before the contract is
signed. If they exceed their estimate, they have to make
an additional payment when the leasing period ends. With
Dynamic Lease, customers are billed monthly for the
kilometers they actually drive, along with a standard basic
fee. The variable leasing rates (“pay-as-you-drive” principle)
are ideal for companies with seasonal business fluctuations.
Expanded product portfolio for telematics services
Mercedes-Benz Connectivity Services GmbH has expanded its
portfolio of products that allow its telematics services to be
used by different brands. The company is offering a hardware
retrofit solution that enables fleet managers to utilize tele-
matics services with any make of car. Along with existing posi-
tioning services, this solution now includes for the first time
new dynamic vehicle data such as fuel consumption and dis-
tance driven. Among other things, the provision of real-time
odometer and diagnostic data can enable anticipatory mainte-
nance scheduling and reduce vehicle downtimes. All of
this translates into big savings potential for fleet operators.
C | THE DIVISIONS | DAIMLER MOBILITY 179
ChangeMyCar: leasing app now with an e-bike option
The fleet management services provider Athlon, which is part
of Daimler Mobility, has expanded its flexible ChangeMyCar
leasing app to include an e-bike that can be rented along with
each vehicle leased. The app’s mobility budget can be used
to combine both modes of transport. The addition of e-bikes to
the app reflects the changing preferences of customers,
who are increasingly demanding more multimodal mobility
solutions.
YOUR NOW: mobility joint ventures continue to grow
Daimler AG and the BMW Group have combined their mobility
services in the YOUR NOW joint ventures. An agreement to
this end was concluded on January 31, 2019. Since their estab-
lishment, the range of mobility services from BMW and
Daimler has built up a strong customer base. At the end of
2019, more than 90 million customers were using the
mobility services provided by the joint ventures for ride hailing,
multimodal platforms, car sharing, parking and battery
charging. As of January 1, 2020, the products and services of
the joint ventures had been further systematically aligned
with customer requirements and consolidated into three pillars:
1. FREE NOW & REACH NOW. 2. SHARE NOW. 3. PARK NOW &
CHARGE NOW.
StarRides: joint venture established for premium
ride-hailing services in China
Daimler Mobility AG and Geely Technology Group have estab-
lished a 50:50 joint venture for a premium ride-hailing service
in China. The new company, known as StarRides, has its head-
quarters in Hangzhou, where it started offering a ride-hailing
service with premium automobiles in December 2019. The fleet
consists of 100 vehicles, including Mercedes-Benz S-Class,
E-Class and V-Class models, as well as premium models from
the Geely electric fleet.
Daimler Mobility AG and Geely Technology Group
have started StarRides, a premium ride-hailing service,
in the Chinese metropolis Hangzhou.
D
Corporate
Governance
The Board of Management and the Supervisory Board of Daimler AG
are committed to the principles of good corporate governance. Our
actions take place within the framework of responsible, transparent
and sustainable corporate governance.
D | CORPORATE GOVERNANCE | CONTENTS 181
D | Corporate Governance
Report of the Audit Committee
182 – 184
– Responsibilities and composition
– Meetings and participants
– Topics dealt with
Declaration on Corporate Governance,
Corporate Governance Report
185 – 195
– Declaration of compliance with the German
Corporate Governance Code 185
D & O insurance deductible for the
Supervisory Board
– Corporate government in practice 186
The German Corporate Governance Code
Principles of our actions
Guidelines for behaving with integrity
What we expect of our business partners
Risk management at the Group
Accounting principles
– Composition and mode of operation of the
Board of Management 187
Board of Management
Diversity
– Composition and mode of operation of the
Supervisory Board and its committees 188
Supervisory Board
Presidential Committee
Nomination Committee
Audit Committee
Legal Affairs Committee
Mediation Committee
– Law for the equal participation of women and men
in executive positions 191
– Overall requirements for the composition of the
Board of Management and the Supervisory Board 191
Board of Management
Supervisory Board
– Shareholders and Shareholders’ Meetings 195
s
t
n
e
t
n
o
C
i
d
e
n
b
m
o
C
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
s
n
o
i
s
i
v
i
D
e
h
T
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
t
r
o
p
e
R
l
i
a
c
n
a
n
F
-
n
o
N
i
d
e
t
a
d
i
l
o
s
n
o
C
s
t
n
e
m
e
t
a
t
S
l
i
a
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
r
u
F
182 D | CORPORATE GOVERNANCE | REPORT OF THE AUDIT COMMITTEE
Report of the Audit Committee
Dear Shareholders,
As Chairman of the Audit Committee, I am very pleased to
report to you on the tasks and activities performed by that
body in financial year 2019.
Responsibility
On the basis of applicable law, the German Corporate Gover-
nance Code and the Rules of Procedure of the Supervisory
Board and its committees, the Audit Committee deals primarily
with questions of accounting, financial reporting and non-
financial reporting. In addition, it deals with the annual audit
and reviews the qualifications and independence of the exter-
nal auditors. Furthermore, it discusses the effectiveness and
functional capabilities of the risk management system, the
internal control system, the internal auditing system and the
compliance management system. After the external auditors
are elected by the Annual Shareholders’ Meeting, the Audit
Committee engages the external auditors to conduct the
annual audit and the auditors’ review of interim financial state-
ments, determines the important audit issues and negotiates
the audit fees with the external auditors. The Audit Committee
also commissions the external auditors to carry out a voluntary
examination of the non-financial report within the framework
of a limited assurance engagement.
Equal representation
Audit Committee Chairman Dr. Clemens Börsig and Joe Kaeser
served as the shareholder representatives on the Audit Com-
mittee in financial year 2019. Both are independent and have
expertise in the field of financial reporting, as well as special
knowledge of and experience in the auditing of financial state-
ments and the application of methods of internal control. Dur-
ing financial year 2019, the employees were represented on the
Audit Committee by Michael Brecht as the Deputy Chairman of
the Committee and by Ergun Lümali.
Meetings and participants
The Audit Committee met six times in financial year 2019. All of
these meetings were also attended by the Chairman of the
Supervisory Board, Dr. Manfred Bischoff, as a permanent
guest. The other permanent participants in the meetings were
the Chairman of the Board of Management, the members of
the Board of Management responsible for Finance and Control-
ling and for Integrity and Legal Affairs, and the external audi-
tors. The heads of specialist departments such as Accounting,
Internal Auditing, Compliance and Legal were also present to
report on individual items of the agenda.
In addition, the Chairman of the Audit Committee held regular
individual discussions, for example with the aforementioned
members of the Board of Management, the external auditors,
the Head of Internal Auditing, the Head of Compliance and, if
required, the heads of other specialist departments.
Reporting to the Supervisory Board
The Chairman of the Audit Committee informed the Supervi-
sory Board about the activities of the Committee and about the
contents of its meetings and discussions in the following
Supervisory Board meetings.
Topics in 2019
In the meeting held on February 5, 2019, the Audit Committee
dealt with the preliminary figures of the annual financial state-
ments and the annual consolidated financial statements for the
year 2018, as well as with the proposal on the appropriation of
profits made by the Board of Management. Following an in-
depth review, the Audit Committee took positive note of the
presented figures and determined that no objections were to
be made to their proposed publication. The Committee further
recommended that the Supervisory Board, which met immedi-
ately thereafter, adopt the same view. The preliminary key fig-
ures and the proposal on the appropriation of profits were
announced at the Annual Press Conference on February 6,
2019.
In another meeting held on February 13, 2019, the Audit Com-
mittee dealt with the annual financial statements, the consoli-
dated financial statements and the combined management
report for Daimler AG and the Daimler Group for financial year
2018, each of which had been issued with an unqualified audi-
tor’s opinion by the external auditors, as well as with the pro-
posal on the appropriation of profits. During the meeting, the
Audit Committee focused in particular on the key audit matters
described in each audit opinion and on the audit approach
applied in each case, including the conclusions drawn. The
Audit Committee also reviewed and discussed the non-finan-
cial report, for which an auditor’s report was issued in accor-
dance with ISAE 3000. The external auditors reported on the
results of their audit and the voluntary review of the non-finan-
cial report within the framework of a limited assurance engage-
ment, and were also available to answer supplementary ques-
tions and to provide additional information. The audit reports
on the annual company and consolidated financial statements
(including the combined management report) and the internal
control system, the report concerning the non-financial report,
and important issues related to accounting were discussed
D | CORPORATE GOVERNANCE | REPORT OF THE AUDIT COMMITTEE 183
Dr. Clemens Börsig, Chairman of the Audit Committee
with the external auditors. In addition, the Audit Committee
also discussed the risk management system. Following an in-
depth review and discussion, the Audit Committee recom-
mended that the Supervisory Board approve the financial
statements, the combined management report, the declaration
on corporate governance included in the corporate governance
report, the non-financial report, and the Board of Manage-
ment’s proposal on the appropriation of profits, which involved
the payment of a dividend of €3.25 per share entitled to a divi-
dend. Furthermore, the Audit Committee approved the Report
of the Audit Committee for the financial year 2018.
In this meeting, the Audit Committee also discussed the report
on the total fees paid to the external auditors in financial year
2018 for auditing and non-auditing services and defined the
framework of approval for engaging the external auditors to
provide non-audit services during the period January 1, 2019 to
February 15, 2020. The Audit Committee also decided to rec-
ommend to the Supervisory Board, and subsequently to the
Annual Shareholders’ Meeting, that KPMG AG Wirtschaftsprü-
fungsgesellschaft be engaged to conduct the annual external
audit and the external auditors’ review of interim financial
reports for financial year 2019 and also to conduct the external
auditors’ review of interim financial reports for financial year
2020 in the period leading up to the Annual Shareholders’
Meeting in 2020. The Audit Committee based this recommen-
dation on the quality of the annual audit and the results of the
independence review, for which no indications of partiality or a
threat to independence were found. Subject to the election of
the proposed external auditors by the Annual Shareholders’
Meeting, the Audit Committee also discussed the proposal to
be made regarding the fees to be agreed upon with the exter-
nal auditors for financial year 2019. Finally, within the frame-
work of its responsibility, the Audit Committee dealt with the
agenda for the 2019 Annual Shareholders’ Meeting and the
annual audit plan for 2019 of the Internal Auditing department.
In the meetings during 2019 related to the quarterly results,
the Audit Committee discussed the interim financial reports
before their publication with the Board of Management and
with the external auditors engaged to carry out the auditors’
review of interim financial statements. In addition, the Commit-
tee received reports from the Internal Auditing, Compliance
and Legal departments. The Board of Management reported
regularly to the Audit Committee on the current status of the
main legal proceedings, including antitrust proceedings as well
as inquiries, investigations, proceedings and administrative
orders in connection with diesel emissions. In addition, the
Audit Committee regularly dealt with notifications concerning
possible violations of rules submitted by employees and third
parties to the Group’s own whistleblower system BPO (Busi-
ness Practices Office).
The meeting of the Audit Committee in April 2019 dealt with
the interim financial report for the first quarter of 2019 and the
quarterly reports from the Compliance and Legal departments.
The Audit Committee also approved the fees agreed upon with
the external auditors for financial year 2019 that had been pro-
posed to the Annual Shareholders’ Meeting. However, this was
done subject to the auditors’ election on May 22, 2019. More-
over, the Audit Committee decided to propose to the Supervi-
sory Board that it have the contents of the non-financial report
for 2019 voluntarily reviewed again with limited assurance.
In its meeting in June 2019, the Audit Committee discussed
aspects of the Group’s risk management system and dealt in
particular with its changes and further development. It also
discussed the methods and processes of, and changes to, the
internal control system. Adjustments had to be made in partic-
ular due to the decision by the Annual Shareholders’ Meeting
on May 22, 2019 to create a new corporate structure (“Project
Future”). In this meeting, the Committee also defined planning
measures and the key audit issues for financial year 2019. In
addition, the Audit Committee extensively investigated current
accounting issues. These include the statements by the Euro-
pean Securities and Markets Authority (ESMA) concerning the
uniform electronic reporting system as well as the methodol-
ogy for evaluating the existing fleet of leased vehicles, includ-
ing diesel-powered ones. The meeting was also used to discuss
the results of the internal quality analysis of the external audit
184 D | CORPORATE GOVERNANCE | REPORT OF THE AUDIT COMMITTEE
for financial year 2018. Lastly, the Audit Committee learned
about the implementation of the central financial risk manage-
ment system and of the pension management in the new cor-
porate structure. Thereafter, the Committee took note of a
report about current tax-related issues, in particular concern-
ing the punitive tariff risk posed by international trade dis-
putes.
In the meeting held in July 2019, the Audit Committee dealt
mainly with the results of the second quarter of 2019, when the
earnings expectations were readjusted two times. As part of
its risk reporting activities, the Audit Committee mainly
addressed legal proceedings as well as production and tech-
nology-related risks. In addition, the Committee received quar-
terly reports from the Compliance, Internal Auditing and Legal
departments. Finally, the Audit Committee discussed with the
Board of Management the annual report produced by the
Group’s Data Protection Officer.
In the meeting held in October 2019, the Audit Committee
dealt with the interim financial report for the third quarter of
2019 and the quarterly reports from the Compliance and Legal
departments. In addition, the Committee conducted its annual
review of the authorized non-audit services provided by the
external auditors and also decided to retain the current cata-
logue of authorized non-audit services.
Company and consolidated financial statements 2019
In a meeting held on February 10, 2020, the Audit Committee
dealt with the preliminary figures of the annual financial state-
ments and the annual consolidated financial statements for the
year 2019, as well as with the proposal on the appropriation of
profits made by the Board of Management. Following an in-
depth review, the Audit Committee took positive note of the
presented figures and determined that no objections were to
be made to their proposed publication. The Committee further
recommended that the Supervisory Board, which met immedi-
ately thereafter, adopt the same view. The preliminary key fig-
ures and the proposal on the appropriation of profits were
announced at the Annual Press Conference on February 11,
2020.
In another meeting on February 19, 2020, the Audit Committee
reviewed and discussed in detail the annual financial state-
ments, the consolidated financial statements and the com-
bined management report for Daimler AG and the Daimler
Group for financial year 2019, each of which had been issued
with an unqualified auditor’s opinion by the external auditors,
as well as the proposal on the appropriation of profits and the
non-financial report, which was issued with a report in accor-
dance with ISAE 3000. At the meeting, the external auditors
reported on the results of their audit and focused in particular
on the key audit matters and the audit approach applied in
each case, including the conclusions drawn. They also
reported on the voluntary review of the non-financial report
within the framework of a limited assurance engagement and
were available to answer supplementary questions and to pro-
vide additional information. The audit reports on the annual
financial statements and consolidated financial statements
(including the key audit matters in the audit opinions) and on
the internal control system, the report concerning the non-
financial report for 2019 and important issues related to finan-
cial reporting were discussed with the external auditors. In
addition, the Audit Committee also discussed the risk manage-
ment system. Following an in-depth review and discussion, the
Audit Committee recommended that the Supervisory Board
approve the financial statements, the combined management
report, the declaration on corporate governance included in
the corporate governance report, the non-financial report and
the recommendation of the Board of Management to pay a divi-
dend of €0.90 per share entitled to a dividend. Furthermore,
the Audit Committee approved the Report of the Audit Com-
mittee for financial year 2019.
Efficiency review
As in previous years, the Audit Committee conducted a self-
evaluation of its own activities in 2019 on the basis of an
extensive company-specific questionnaire. The results of this
efficiency review were once again very positive and were pre-
sented and discussed in the meeting on February 19, 2020.
This did not result in any need for action with regard to the
Committee’s tasks, or with regard to the content, frequency or
procedure of its meetings.
Stuttgart, February 2020
The Audit Committee
Dr. Clemens Börsig
Chairman
D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT 185
Declaration on Corporate Governance,
Corporate Governance Report
The Declaration on Corporate Governance pursuant to Section 289f and Section 315d of the
German Commercial Code (HGB) has been combined for Daimler AG and the Daimler Group as well
as with the Corporate Governance Report. The following statements thus apply to Daimler AG
and the Daimler Group insofar as not otherwise stated. The Declaration on Corporate Governance,
which is combined with the Corporate Governance Report, can also be viewed on the Internet at
w daimler.com/dai/dcgc. Pursuant to Section 317 Subsection 2 Sentence 6 of the German Com-
mercial Code (HGB), the purpose of the audit of the statements pursuant to Section 289f Sub-
sections 2 and 5 and Section 315d of the HGB is limited to determining whether such statements
have actually been provided.
Maximum number of supervisory board memberships for
members of the management board of a listed corporation
(Clause 5.4.5 Paragraph 1 Sentence 2). In accordance
with this recommendation, the management board of a listed
corporation shall not accept more than a total of three super-
visory board memberships in non-group listed corporations or
on supervisory bodies of non-group entities that make similar
requirements. Whether the number of supervisory board mem-
berships held by a member of the management board of a
listed corporation still seems appropriate should, however, be
assessed more appropriately on a case-by-case basis than
with a rigid upper limit. The individual workload expected for a
member of a management board as a result of the total
number of memberships held does not necessarily increase in
proportion to their number.
Stuttgart, December 2019
For the Supervisory Board
Dr. Manfred Bischoff
Chairman
For the Board of
Management
Ola Källenius
Chairman
This declaration and previous, no longer applicable, declara-
tions of compliance from the past five years are also available
at our website at w daimler.com/dai/dcgc.
Declaration by the Board of Management and
the Supervisory Board of Daimler AG pursuant
to Section 161 of the German Stock Corporation
Act (AktG) regarding the German Corporate
Governance Code
Daimler AG satisfies the recommendations of the German
Corporate Governance Code published in the official section of
the German Federal Gazette on April 24, 2017 in the Code ver-
sion dated February 7, 2017, with the exception of Clause 3.8
Paragraph 3 (D&O insurance deductible for the Supervisory
Board) and Clause 5.4.5 Paragraph 1 Sentence 2 (maximum
number of supervisory board memberships for members of the
management board of a listed corporation) and will continue
to observe the recommendations with the aforesaid deviations.
Since the issuance of the updated compliance declaration
in September 2019, Daimler AG has observed the recommen-
dations of the German Corporate Governance Code, with the
two aforementioned exceptions.
D&O insurance deductible for the Supervisory Board
(Clause 3.8, Paragraph 3) As in previous years, the Directors’
& Officers’ liability insurance (D&O insurance) also contains
a provision for a deductible for the members of the Supervisory
Board, which is appropriate in the view of Daimler AG. How-
ever, this deductible does not correspond to the legally required
deductible for members of the Board of Management in the
amount of at least 10% of the damage up to at least one and a
half times the fixed annual remuneration. Since the remu-
neration structure of the Supervisory Board is limited to func-
tion-related fixed remuneration without performance bonus
components, setting a deductible for Supervisory Board mem-
bers in the amount of 1.5 times the fixed annual remuneration
would have a disproportionate economic impact when com-
pared with the members of the Board of Management, whose
compensation consists of fixed and performance bonus com-
ponents.
186 D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT
The main principles applied in our corporate
governance
The German Corporate Governance Code
Beyond the legal requirements of German stock corporation,
codetermination and capital market legislation, Daimler AG has
followed and continues to follow the recommendations of
the German Corporate Governance Code (“Code”) in the Code
version dated February 7, 2017, with the exceptions disclosed
and justified in the declaration of compliance.
The deviation from Clause 5.4.5 Paragraph 1 Sentence 2 of the
Code relates to Joe Kaeser’s exceeding the maximum number
of memberships on supervisory boards recommended therein
for management board members of listed corporations. The
maximum number of memberships was exceeded in this case
when Joe Kaeser became a member of the Supervisory Board
of Mercedes-Benz AG. The Board of Management and the
Supervisory Board are of the opinion that although this addi-
tional membership of a supervisory board within the Daimler
Group does increase the workload associated with the member-
ship of the Supervisory Board of Daimler AG, it does so to
an extent substantially less than would be the case if the addi-
tional membership were to relate to a third-party company.
Daimler AG has followed and continues to follow the sugges-
tions of the Code with just one exception: Deviating from the
suggestion in Clause 2.3.3, which stipulates that companies
should enable shareholders to view the Shareholders’ Meeting
with modern communications media such as the Internet,
the Shareholders’ Meeting is not transmitted in its entirety on
the Internet, but only until the end of the report by the Board
of Management, in order to protect the character of the Share-
holders’ Meeting as a meeting attended by our shareholders in
person. An additional factor is that continuing the broadcast
after that point, in particular broadcasting comments made by
individual shareholders, could impair the discussion between
shareholders and management.
The principles guiding our conduct
Our business conduct is based on Group-wide standards
that go beyond the requirements of relevant legislation and the
German Corporate Governance Code. These standards are
based on our four corporate values integrity, respect, passion
and discipline. In order to achieve long-term and thus sustain-
able business success on this basis, our goal is to ensure that
our activities are in harmony with the environment and society.
This is due to the fact that we, as one of the world’s leading
vehicle manufacturers, also strive to be a leader in sustainabil-
ity. We have defined the most important principles in our
Integrity Code, which serves as a frame of reference for all
employees at Daimler AG and the Group and supports them in
making the right decisions even in difficult business situations.
Our Integrity Code
Employees from different departments and units throughout
the Group and around the world helped us develop our
Integrity Code, which was revised in 2019. Our Integrity Code
defines the central corporate principles that guide our behav-
ior in daily business, our interpersonal conduct within the com-
pany and our conduct toward customers and business part-
ners. These corporate principles include compliance with laws,
as well as fairness, transparency, a commitment to diversity,
and responsibility. In addition to the corporate principles, our
Integrity Code includes requirements and regulations concern-
ing respect for and the protection of human rights and dealing
with conflicts of interest. It also prohibits all forms of corrup-
tion. The Integrity Code applies to all companies and employ-
ees of the Daimler Group worldwide. The Integrity Code
is available on the Internet at w daimler.com/dai/caag.
We have also reached agreement on “Principles of Social
Responsibility” with the World Employee Committee. These
principles apply at Daimler AG and throughout the Group. In
the Principles of Social Responsibility, Daimler commits itself
to the principles of the UN Global Compact and thus to inter-
nationally recognized human and workers’ rights, freedom of
association, sustainable protection of the environment and
the proscription of child labor and forced labor. Daimler also
commits itself to guaranteeing equal opportunities and
adhering to the principle of “equal pay for equal work.”
Expectations for our business partners
We also require our business partners to adhere to clear
stipulations because we regard our business partners’ integrity
and behavior in conformity with regulations as a precondition
for trusting cooperation. When selecting our direct business
partners, we therefore pay close attention to ensure that they
comply with the law and follow ethical principles, and that
they pay the same attention themselves to other partners in
the supply chain. For the expectations we place on our busi-
ness partners, see also w daimler.com/sus/obr.
Risk management at the Group
Daimler has a risk management system commensurate with its
size and position as a company with global operations
E pages 135 ff of the Annual Report 2019. The risk manage-
ment system is one component of the overall planning, control-
ling and reporting process. Its goal is to enable the company’s
management to recognize significant risks at an early stage
and to initiate appropriate countermeasures in a timely manner.
At least once a year, the Audit Committee of the Supervisory
Board of Daimler AG discusses the effectiveness and function-
ality of the risk management system with the Board of Man-
agement. The Chairman of the Audit Committee reports to the
Supervisory Board of Daimler AG on the committee’s work
at the latest in the meeting of the Supervisory Board following
each committee meeting. The Supervisory Board of Daimler
AG also deals with the risk management system on the occa-
sion of the audit of the annual company and consolidated
financial statements. The Chairman of the Supervisory Board
has regular contacts between Supervisory Board meetings
with the Board of Management, and in particular with the
Chairman of the Board of Management, to discuss not only the
Group’s strategy and business development but also the
issue of risk management. In addition, the Board of Manage-
ment of Daimler AG regularly informs the Audit Committee
and the Supervisory Board of the most important risks facing
the company and the Group as a whole. The Legal Affairs
Committee, which was established by the Supervisory Board
during the reporting period to operate until further notice,
supports the Supervisory Board in carrying out its tasks with
respect to the complex proceedings relating to emissions
regulations and antitrust law with which Daimler AG and its
subsidiaries are confronted. The Internal Auditing
department monitors adherence to the legal framework and to
Group standards by means of targeted audits and initiates
appropriate actions as required.
D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT 187
Accounting and the external audit
Daimler prepares its consolidated financial statements and
interim financial reports in accordance with the International
Financial Reporting Standards (IFRS), as adopted by the Euro-
pean Union. The annual financial statements of Daimler AG are
prepared in accordance with the accounting standards of the
German Commercial Code (HGB). Daimler prepares both half-
yearly and quarterly financial reports. The annual company
financial statements and consolidated financial statements of
Daimler AG are audited by external auditors; interim financial
reports are reviewed by external auditors. The consolidated
financial statements and the Group management reports
are made publicly accessible via the Company’s website within
90 days from the end of the reporting year; the interim finan-
cial reports are made publicly accessible in the same manner
within 45 days from the end of the reporting period.
Based on the recommendation of the Audit Committee, the
Supervisory Board submits a decision proposal to the Share-
holders’ Meeting of Daimler AG for the election of the external
auditors for the annual company financial statements, for
the consolidated financial statements and for the auditors’
review of the interim financial reports. At the Annual Share-
holders’ Meeting on May 22, 2019, KPMG AG Wirtschafts-
prüfungsgesellschaft, Berlin was elected to conduct the audit
of the annual company financial statements and the consoli-
dated financial statements, and the external auditors’ review of
interim financial reports, for financial year 2019, as well as
the external auditors’ review of interim financial reports for
financial year 2020 in the period leading up to the Share-
holders’ Meeting in 2020. KPMG AG Wirtschaftsprüfungsgesell-
schaft has been conducting the audit of the annual company
financial statements and consolidated financial statements of
Daimler AG since the 1998 financial year; since 2014, the
responsible auditor commissioned to carry out the external
audit has been Dr. Axel Thümler.
Prior to issuing its recommendation to the Annual Shareholders’
Meeting, the Audit Committee of the Supervisory Board
obtained a declaration from the external auditors under con-
sideration. The external auditors were requested to state
whether any business, financial, personal or other relationships
existed between the external auditors and their bodies
and audit managers on the one hand, and the Company and
the members of its bodies on the other, which could justify
concerns regarding a conflict of interest. This statement also
describes the extent to which other services were performed
for the Daimler Group in the previous year or had been contrac-
tually agreed upon for the following year.
The Audit Committee instructed the external auditors to
immediately inform the Committee Chairman of any indications
of partiality or grounds for exclusion uncovered during the
audit or the auditors’ review of interim financial statements, and
of all key findings and events relevant to the tasks of the
Supervisory Board, particularly findings or events related to sus-
pected irregularities in accounting. The Audit Committee
also reached an agreement with the external auditors stipulat-
ing that the external auditors would inform the Audit Com-
mittee, and make a note in the audit report, of any facts uncov-
ered during the annual audit that would reveal inaccuracies
in the Board of Management’s and the Supervisory Board’s
declaration of compliance with the German Corporate Gover-
nance Code.
Composition and mode of operation of the
Board of Management D.01
Daimler AG is obliged by the German Stock Corporation Act
(AktG) to apply a dual management system featuring strict
personal and functional separation between the Board of
Management and the Supervisory Board (two-tier board).
Accordingly, the Board of Management manages the company
while the Supervisory Board monitors and advises the
Board of Management.
Board of Management
In accordance with the Articles of Incorporation of Daimler AG,
the Board of Management has at least two members. The pre-
cise number of Board of Management members is determined
by the Supervisory Board. The Board of Management had
eight members on December 31, 2019. In accordance with Ger-
man law on the equal participation of women and men in
executive positions, the Supervisory Board has set a target for
the proportion of women on the Board of Management and
a deadline for achieving this target. The details are described in
a separate section: E page 191. With regard to the com-
position of the Board of Management, the Supervisory Board
has also adopted a diversity concept that is embedded in
an overall requirements profile. The details of this concept are
also described in a separate section: E page 191.
Information on the areas of responsibility and the curricula
vitae of the Board of Management members is posted on
the Daimler AG website at w daimler.com/dai/bom. The
members of the Board of Management and their areas of
responsibility are also listed on E pages 32 ff of the Annual
Report 2019.
The Board of Management manages Daimler AG and the
Daimler Group. With the consent of the Supervisory Board, the
Board of Management determines the Group’s strategic focus,
defines the corporate goals, and makes decisions concerning
operational planning matters. The members of the Board of
Management must represent the interests of the Company and
share responsibility for managing the Group’s entire business.
Irrespective of this overall responsibility, the individual members
of the Board of Management manage their allocated areas on
their own responsibility and within the framework of the instruc-
tions approved by the entire Board of Management. Specific
issues defined by the Board of Management as a whole are dealt
with by the Board as a whole, which must approve all related
decisions. The Chairman of the Board of Management coordi-
nates the work of the Board of Management.
The Board of Management prepares the consolidated interim
reports, the annual company financial statements of Daimler AG,
the annual consolidated financial statements, and the com-
bined management report of the Company and the Group, as
well as the separate combined non-financial report produced
for Daimler AG and the Group. Together with the Supervisory
Board, the Board of Management issues the declaration of
compliance with the German Corporate Governance Code
each year. It ensures that the provisions of applicable law,
official regulations and the Group’s internal guidelines are
adhered to, and works to make sure that the companies of the
Group comply with those rules and regulations. The Board
of Management has also established an adequate compliance
188 D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT
management system that takes into account the Company’s
risk situation. The main features of this system are described on
E pages 212 ff of the Annual Report 2019. Such features
include the Company’s whistleblower system, the BPO (Busi-
ness Practices Office), which enables Daimler employees
and external whistleblowers to report misconduct anywhere
in the world. The tasks of the Board of Management also
include establishing and monitoring an appropriate and effi-
cient risk management system.
For certain types of transactions defined by the Supervisory
Board, the Board of Management requires the prior consent of
the Supervisory Board. At regular intervals, the Board of
Management reports to the Supervisory Board on the strategy
of the business units, corporate planning, profitability, busi-
ness development and the situation of the Group, as well as on
the internal control system, the risk management system and
the compliance management system. The Supervisory Board
has specified the information and reporting duties of the Board
of Management.
No committees of the Board of Management existed during the
reporting period. The CASE Steering Committee of the Board
of Management transferred the future-oriented areas of CASE
to a specialist committee made up of high-level members. The
responsibility of the Board of Management as a whole for spe-
cific matters defined by the Board remains unaffected by this.
The Board of Management has also given itself a set of rules of
procedure, which can be seen on our website at w daimler.
com/dai/rop. Those rules describe, for example, the procedure
to be observed when passing resolutions and ways to avoid
conflicts of interest.
Diversity
Diversity management has been part of the corporate strategy
of Daimler since 2005. We rely on the diversity of our employ-
ees and the differences between them because such differ-
ences form the foundation for an effective and successful com-
pany. The aim of our activities is to bring together the right
people to tackle our challenges, create a work culture that pro-
motes the performance, motivation and satisfaction of our
employees and managers, and help attract new target groups
to our products and services. Our activities for shaping diver-
sity at Daimler focus on three areas: best mix, work culture
and customer interaction. With our specific measures, activi-
ties and initiatives for everything from training formats for
employees and managers to workshops, conferences, guide-
lines and target group-specific communication and awareness-
raising measures, our diversity management system makes a
major contribution to the further development of our corporate
culture.
Targeted support for women on the basis of the best-mix
principle was a central component of our diversity management
activities even before the legislation on the equal participation
of women and men in executive positions went into effect.
Such support has also included and continues to include flexible
working-time arrangements, company nurseries and special
mentoring programs for women. In order to meet legal require-
ments, the Board of Management of Daimler AG has defined
targets for the proportion of women at the two management
levels below the Board of Management and a deadline for
achieving those targets. The details are described in a separate
section. Independently of the legal requirements, Daimler
continues to affirm the goal it already set itself in 2006 of
increasing the proportion of women in executive positions at
the Group to 20% by 2020. At the end of 2019, this proportion
amounted to 19.8% (2018: 18.8%).
Composition and mode of operation of the
Supervisory Board and its committees
Supervisory Board
In accordance with the German Codetermination Act (MitbestG),
the Supervisory Board of Daimler AG comprises 20 members.
Half of them are elected by the shareholders at the Sharehold-
ers’ Meeting. The other half comprises members who are
elected by the Group’s employees who work in Germany. The
members representing the shareholders and the members
representing the employees are equally obliged by law to act in
the Company’s best interests.
Information on the curricula vitae of the members of the
Supervisory Board is posted on our website at w daimler.com/
dai/sb. Information on other supervisory board memberships
held by the members of the Supervisory Board can also
be found on E pages 40 ff of the Annual Report 2019.
The Supervisory Board is to be composed so that its members
together are knowledgeable about the business sector in which
the Company operates and also dispose of the knowledge,
skills and specialist experience that are required for the proper
execution of their tasks. According to the law on the equal
participation of women and men in executive positions, at least
30% of the members of the Supervisory Board of Daimler AG
must be women and at least 30% must be men. The details are
D.01
Governance structure
Annual Shareholders’ Meeting
ratifies
the actions of
elects members
representing the
shareholders,
ratifies the
actions of
reports
Supervisory Board
20 members
appoints,
advises and
monitors
reports
reports
Board of Management
8 members
D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT 189
described in a separate section: E page 191 of the Annual
Report 2019. With regard to its composition, the Supervisory
Board has also created an overall requirements profile consist-
ing of a skills profile and a diversity concept to be applied to
the entire Supervisory Board. Details of the overall requirements
profile are also described in a separate section:E pages 192 ff
of the Annual Report 2019. Proposals by the Supervisory
Board of candidates for election by the Shareholders’ Meeting
as members representing the shareholders of Daimler AG,
for which the Nomination Committee makes recommendations,
aim to fulfill the overall requirements profile of the Supervisory
Board as a whole.
The members of the Supervisory Board attend on their own
responsibility courses of training and further training that
might be necessary for the performance of their tasks, and are
supported by the Company in doing so. Such courses may
address corporate governance, changes brought about by new
legislation, or the launch of new products and pioneering
technologies, for example. New members of the Supervisory
Board are offered an “onboarding” program that gives them
the opportunity to exchange views with members of the Board
of Management and other executives on current issues related
to the various areas of responsibility of the Board of Manage-
ment, and thus to obtain an overview of important topics at the
Group.
The Supervisory Board monitors and advises the Board of
Management with regard to its management of the Group. At
regular intervals, the Board of Management reports to the
Supervisory Board on the strategy of the business units, corpo-
rate planning, revenue development, profitability, business
development and the situation of the Group, as well as on the
internal control system, the risk management system, and
the compliance management system. The Supervisory Board
has retained the right of approval for transactions of funda-
mental importance. Furthermore, the Supervisory Board has
specified the information and reporting duties of the Board
of Management to the Supervisory Board, to the Audit Com-
mittee and – between the meetings of the Supervisory
Board – to the Chairman of the Supervisory Board.
The Supervisory Board’s duties include appointing and, if
necessary, recalling the members of the Board of Management.
Initial appointments are usually made for a period of three
years. In accordance with German legislation on equal partici-
pation by women and men in executive positions, the Super-
visory Board has defined a target for the proportion of women
on the Board of Management and a deadline for achieving
this target. The details are described in a separate section:
E page 191 of the Annual Report 2019. With regard to the
composition of the Board of Management, the Supervisory
Board has also adopted a diversity concept that is embedded
in an overall requirements profile. The details of this concept
are also described in a separate section: E page 192 of the
Annual Report 2019.
The Supervisory Board decides on the system of remuneration
for the Board of Management, reviews it regularly, and deter-
mines the total individual remuneration of each member of the
Board of Management with consideration of the ratio of
Board of Management remuneration to the remuneration of the
senior executives and the workforce as a whole, also with
regard to development over time. For this comparison, the
Supervisory Board has defined the senior executives by apply-
ing Daimler’s internal terminology for the hierarchical levels
and has defined the workforce of Daimler AG in Germany as the
relevant workforce. Variable components of remuneration
are generally based on an assessment period that lasts several
years and is essentially future-oriented. Multi-year variable
remuneration components are not paid out until they come due.
The Supervisory Board has set upper limits for individual Board
of Management remuneration in total and with regard to its
variable components. Further information on Board of Manage-
ment remuneration can be found in the Remuneration Report
on E pages 108 ff of the Annual Report 2019.
The Supervisory Board reviews the annual company financial
statements, the annual consolidated financial statements
and the combined management report of the Company and the
Group, as well as the proposal for the appropriation of distrib-
utable profits. Following discussions with the external auditors
and taking into consideration the audit reports of the external
auditors and the results of the review by the Audit Committee,
the Supervisory Board states whether, after the final results
of its own review, any objections are to be raised. If that is not
the case, the Supervisory Board approves the financial state-
ments and the combined management report. Upon being
approved, the annual financial statements are adopted. The
Supervisory Board reports to the Annual Shareholders’ Meet-
ing on the results of its own review and on the manner and
scope of its supervision of the Board of Management during
the previous financial year. The Report of the Supervisory
Board for the year 2019 is available on E pages 34 ff of the
Annual Report 2019 and on the Internet at w daimler.com/
dai/sb.
In 2019, the Supervisory Board once again commissioned an
external review of the separate combined Non-Financial
Report of Daimler AG and the Group within the framework of a
limited assurance engagement. The external auditors issued
a report concerning their limited assurance engagement on the
Non-Financial Report in accordance with ISAE 3000, which
the Supervisory Board then approved after reviewing the Non-
Financial Report and discussing it with the external auditors.
The Supervisory Board has given itself a set of rules of proce-
dure, which regulate not only its duties and responsibilities
and the personal requirements placed upon its members, but
above all the convening and preparation of its meetings and
the procedure of passing resolutions. The rules of procedure of
the Supervisory Board can be viewed on our website at
w daimler.com/dai/rop
Meetings of the Supervisory Board are regularly prepared in
separate discussions of the members representing the employ-
ees and of the members representing the shareholders with
the members of the Board of Management. The Supervisory
Board meetings during the reporting year once again included
so-called executive sessions on a regular basis for discussions
of the Supervisory Board in the absence of the members of the
Board of Management. The Supervisory Board members can
also take part in the meetings by means of conference calls or
video conferences. However, this is not the rule.
The Supervisory Board formed a new committee in the report-
ing period. On December 31, 2019, the Supervisory Board
had, in addition to the legally required Mediation Committee,
four additional committees that perform to the extent legally
permissible the tasks assigned to them in the name of and on
190 D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT
behalf of the entire Supervisory Board. The committee
chairpersons report to the entire Supervisory Board on the
committees’ work at the latest in the meeting of the Super-
visory Board following each committee meeting. The Supervi-
sory Board has issued rules of procedure for each of its
committees. Those rules of procedure can be viewed on our
website at w daimler.com/dai/rop. Information on the
current composition of these committees can be viewed at
w daimler.com/dai/sbc and is also available on E page 41
of the Annual Report 2019.
Presidential Committee
The Presidential Committee is composed of the Chairman
of the Supervisory Board, his Deputy, and two other members,
who are elected by a majority of the votes cast by the mem-
bers of the Supervisory Board.
The Presidential Committee makes recommendations to the
Supervisory Board on the appointment of members of the
Board of Management, taking into account the overall require-
ments profile the Supervisory Board has defined to be filled,
including the diversity concept, as well as the Supervisory
Board’s target for the proportion of women on the Board of
Management. It submits proposals to the Supervisory Board
on the design of the remuneration system for the Board of
Management and on the appropriate total individual remunera-
tion of its members. In this context, it follows the relevant
recommendations of the German Corporate Governance Code.
The Presidential Committee is also responsible for the Board
of Management members’ contractual affairs. In addition, it
decides on the granting of approval for sideline activities of the
members of the Board of Management, and once a year
submits to the Supervisory Board for its approval a complete
list of the sideline activities of each member of the Board
of Management.
In addition, the Presidential Committee consults and decides
on questions of corporate governance, on which it also makes
recommendations to the Supervisory Board. It supports and
advises the Chairman of the Supervisory Board and his Deputy,
and prepares the meetings of the Supervisory Board within
the limits of its responsibilities.
Nomination Committee
The Nomination Committee is composed of at least three
members, who are elected by a majority of the votes cast by the
members of the Supervisory Board representing the sharehold-
ers. It is the only Supervisory Board committee that consists
solely of members representing the shareholders. The Nomina-
tion Committee makes recommendations to the Supervisory
Board concerning persons to be proposed for election as mem-
bers of the Supervisory Board representing the shareholders
at the Shareholders’ Meeting. In doing so, the Nomination
Committee takes into consideration the requirements of German
law on equal participation of women and men in executive
positions, as well as the recommendations of the German Cor-
porate Governance Code. It also strives to ensure the fulfill-
ment of the overall requirements profile, including the skills
profile, for the entire Supervisory Board.
Audit Committee
The Audit Committee is composed of four members, who are
elected by a majority of the votes cast by the members of
the Supervisory Board. The Chairman of the Supervisory Board
is not simultaneously the Chairman or a member of the Audit
Committee. The Chairman of the Supervisory Board attends
the meetings of the Audit Committee as a guest.
Both the Chairman of the Audit Committee, Dr. Clemens
Börsig, and the other shareholder representative on the Audit
Committee, Joe Kaeser, fulfill the criteria for independence
and have expertise in the field of financial reporting, as well as
special knowledge and experience with regard to auditing and
methods of internal control. Furthermore, due to his earlier
work at Robert Bosch GmbH and his long-standing membership
of the Supervisory Board of Daimler AG, Dr. Clemens Börsig
is also very familiar with the automotive industry.
The Audit Committee deals with the supervision of the
accounting and its process as well as with the annual external
audit. At least once a year, it discusses with the Board of
Management the effectiveness and functionality of the internal
control and risk management system, the internal auditing
system and the compliance management system. It regularly
receives reports on the work of the Internal Auditing depart-
ment and the Compliance Organization. At least four times a
year, the Audit Committee receives a report from the whistle-
blower system BPO (Business Practices Office) on complaints
and information about any breaches of regulations or guide-
lines by high-level executives, as well as violations by other
employees of the regulations in a defined catalog of legal provi-
sions. It regularly receives information about the handling of
these complaints and notifications.
The Audit Committee discusses with the Board of Management
the interim reports before they are published. On the basis
of the report of the external auditors, the Audit Committee
reviews the annual company financial statements and the
annual consolidated financial statements, as well as the manage-
ment report of the Company and the Group, and discusses
them with the external auditors. The Audit Committee makes a
proposal to the Supervisory Board on the adoption of the
annual company financial statements of Daimler AG, on the
approval of the annual consolidated financial statements,
and on the appropriation of profits. The Committee also makes
recommendations for the Supervisory Board’s proposal on
the election of external auditors, assesses those auditors’ suit-
ability, qualifications and independence, and, after the exter-
nal auditors are elected by the Annual Shareholders’ Meeting,
it engages them to conduct the audit of the annual company
and consolidated financial statements and to review the interim
reports, negotiates an audit fee, and determines the focus of
the annual audit. The external auditors report to the Audit
Committee on all accounting matters that might be regarded
as critical and on any material weaknesses of the internal
control and risk management system with regard to accounting
that might be discovered during the audit.
Finally, the Audit Committee approves permitted services that
are not directly related to the annual audit and which are pro-
vided by the firm of external auditors or its affiliates to Daimler
AG or to companies of the Daimler Group.
D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT 191
Legal Affairs Committee
In accordance with its responsibilities, the Supervisory Board
examines in detail all legal proceedings facing the Group and
its subsidiaries. In view of the complex proceedings relating to
emissions regulations and antitrust law, and in order to ensure
the efficient organization of Supervisory Board activities,
the Supervisory Board decided during the reporting period to
establish a Legal Affairs Committee that will continue to
operate until further notice. This committee coordinates the
exercise and performance of the rights and obligations of
the Supervisory Board with regard to the aforementioned legal
affairs and prepares and recommends associated resolutions
for adoption by the Supervisory Board. The Legal Affairs Com-
mittee is composed of six members, who are elected by a
majority of the votes cast by the members of the Supervisory
Board.
On November 8, 2016, the Board of Management passed a
resolution stipulating a target of 15% women for both the first
and second management levels at Daimler AG below the Board
of Management, with a deadline of December 31, 2020. At
the time of the resolution, the proportion of women in the first
and second management levels below the Board of Manage-
ment was 8.0% and 12.4%, respectively. As of December 31, 2019,
the proportion of women at the first management level below
the Board of Management was 12.5%; at the second level it was
23.8%. As a result of the hive-down of the Cars & Vans and
Trucks & Buses divisions to Mercedes-Benz AG and Daimler
Truck AG in the context of “Project Future,” the number of
senior executives at Daimler AG at the two management levels
below the Board of Management, upon which the calculation
of the proportion of women as of December 31, 2019 is based,
has decreased significantly.
Mediation Committee
The Mediation Committee is composed of the Chairman of the
Supervisory Board and his Deputy, as well as one member
of the Supervisory Board representing the employees and one
member of the Supervisory Board representing the sharehold-
ers, each elected with a majority of the votes cast by the
shareholders’ and employees’ representatives, respectively. It
is formed solely to perform the functions laid down in Section
31 Subsection 3 of the German Codetermination Act (MitbestG).
Accordingly, the Mediation Committee has the task of making
proposals on the appointment of members of the Board of
Management if in the first vote the majority required for the
appointment of a Board of Management member of two
thirds of the members of the Supervisory Board is not achieved.
As in previous years, the Mediation Committee did not have to
take any action in 2019.
Germany’s law on the equal participation of
women and men in executive positions
In accordance with German legislation on equal participation
by women and men in executive positions in both the private
and the public sector, the supervisory boards of listed com-
panies or companies subject to Germany’s system of codeter-
mination have to set a target for the proportion of women on
their board of management. The board of management of such
a company has to set a target for the proportion of women at
the two management levels below that of the board of manage-
ment. If the proportions of women at the time when these tar-
gets are set by the board of management and the supervisory
board are below 30%, the targets may not be lower than the
proportions already reached. At the same time that the targets
are set, the boards have to set periods for their achievement,
which may not be longer than five years.
On December 8, 2016, the Supervisory Board of Daimler AG
passed a resolution stipulating that the target figure for the
proportion of women on the Board of Management of Daimler
AG would be 12.5%, while the deadline would be December 31,
2020. At December 31, 2019, the eight-member Board of Man-
agement included two women, Renata Jungo Brüngger and
Britta Seeger. This means that women account for 25% of the
Board of Management members.
Since 2016, listed companies that have supervisory boards in
which shareholders and employees are equally represented
are required to a have proportion of at least 30% women and
30% men. This requirement has to be fulfilled by the Super-
visory Board as a whole. If the side of the Supervisory Board
representing the shareholders or the side representing the
employees objects to the Chairman of the Supervisory Board
about the application of the ratio to the entire Supervisory
Board, the minimum ratio is to apply separately to the share-
holders’ side and to the employees’ side for that election.
At December 31, 2019, 30% of the shareholder representatives
in the Supervisory Board of Daimler AG were women (Sari
Baldauf, Petraea Heynike and Marie Wieck), while 70% were
men. On that date, 30% of the employee representatives on
the Supervisory Board were women (Elke Tönjes-Werner, Sibylle
Wankel and Dr. Sabine Zimmer), while 70% were men. In its
meeting on February 19, 2020, the Supervisory Board consid-
ered its nomination for the election at the 2020 Shareholders’
Meeting and decided, upon the recommendation of the Nomi-
nation Committee, to propose at the 2020 Annual Sharehold-
ers’ Meeting that Timotheus Höttges, Chairman of the Board of
Management of Deutsche Telekom AG, be elected to the
Supervisory Board. The legally required gender ratio will be
met both on the shareholder representatives’ side and for the
Supervisory Board as a whole if this person is elected to the
Supervisory Board, provided that no other changes occur.
Along with Daimler AG itself, there are other Group companies
subject to codetermination law. These companies have defined
their own targets for the proportion of women on their super-
visory boards, executive management bodies and the two levels
below the board or executive management level, and have also
set deadlines for target achievement. All relevant information
here has been published in accordance with applicable law.
Overall requirements profiles for the
composition of the Board of Management and
the Supervisory Board
In terms of the composition of the Board of Management and
the Supervisory Board, Daimler AG utilizes diversity concepts
that focus on aspects such as age, gender, education and
professional background. For this reason, the Company is
required to describe these concepts in its declaration on corpo-
rate governance, and to also explain the aims of the diversity
concepts, the manner in which they are implemented and the
192 D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT
results achieved with them in the financial year. The Supervisory
Board has combined the diversity concepts with the require-
ments of German legislation on equal participation of women
and men in executive positions and the specific targets for
the composition of executive management bodies as defined
by the recommendations in the current version of the German
Corporate Governance Code. These combined requirements
are presented in the overall requirements profiles for the com-
position of the Board of Management and the Supervisory
Board described below. The requirements profiles also serve
as the basis for long-term succession planning. They are
reviewed each year, also taking into account changes that may
have been made to the German Corporate Governance Code.
Board of Management
The requirements profile for the Board of Management of
Daimler AG aims for a Board of Management with excellent
leadership skills that is as diverse and mutually supportive as
possible. The Board of Management as a whole should possess
the knowledge, skills and experience required for the proper
execution of its tasks and be composed of members whose
varied personal backgrounds and experiences ensure that the
Board as a whole also embodies the desired management
philosophy. Decisions regarding appointments to specific posi-
tions on the Board of Management are always governed by
the Company’s interests under consideration of all circumstan-
ces in each individual case.
The requirements profile for the Board of Management currently
includes in particular the following aspects, which are to be
taken into account to the greatest extent possible when making
decisions on appointments to the Board of Management:
– The members of the Board of Management should have dif-
ferent educational and professional backgrounds, whereby
at least two members should have a technical background.
With Markus Schäfer and Wilfried Porth, at December 31,
2019 the Board of Management had two members who are
engineers. Since taking over as Head of Group Research &
Mercedes-Benz Cars Development on January 1, 2017, a
position he held until he was appointed Chairman of the
Board of Management on May 22, 2019, Ola Källenius has
sustainably displayed the expertise he acquired in various
technical management positions throughout the Company.
– In order to meet legal requirements on the equal representa-
tion of women and men in executive positions, the Super-
visory Board defined on December 8, 2016 a target of 12.5%
for the proportion of women on the Board of Management,
with a deadline of December 31, 2020. This means that of the
eight current members of the Board of Management, at least
one member must be a woman. The Board of Management
currently has two female members, Renata Jungo Brüngger
and Britta Seeger. This means the proportion of women on
the Board of Management is currently 25%.
– In accordance with the recommendations contained in the
German Corporate Governance Code in the version dated
February 7, 2017, the Supervisory Board has set an age limit
for members of the Board of Management. As a rule, 62
years of age serves as orientation for age-related retirement.
When it set this age limit, the Supervisory Board deliberately
decided in favor of a flexible rule allowing the required
scope for the appropriate assessment of the circumstances
of each individual case. With the retirement of Dr. Dieter
Zetsche on May 22, 2019, all members of the Board of Man-
agement are currently below the age limit.
– In addition, a sufficient generational mix among Board of
Management members is to be taken into account in appoint-
ment decisions, whereby if possible at least three members
of the Board of Management should be 57 years of age
or younger at the beginning of their respective term of office.
This is the case for all current members of the Board of
Management, with the exception of Wilfried Porth.
– Decisions related to the composition of the Board of
Management should also take into account internationality
in the sense of varied cultural backgrounds or international
experience through assignments abroad lasting several
years, whereby if possible, at least one member of the Board
of Management should come from a country other than
Germany. Irrespective of the many years of international
experience of a large majority of members of the Board
of Management, this target is currently overachieved due to
the international origins of Ola Källenius and Renata Jungo
Brüngger.
– In accordance with the recommendation of the German
Corporate Governance Code in the version dated February 7,
2017, the rules of procedure of the Board of Management
stipulate that no member of the Board of Management may
be a member of more than three supervisory boards of listed
corporations outside the Daimler Group or of similar boards
or committees at companies outside the Daimler Group that
have comparable requirements. This stipulation has been
met. The only listed company in which Hubertus Troska is a
member of a supervisory board or similar board outside the
Daimler Group is BAIC Motor Corporation Ltd. Hubertus
Troska’s other board memberships are at joint ventures that
fall within his areas of responsibility.
The aspects described above are to be taken into consider-
ation when making Board of Management appointments. On
the basis of a target profile that takes into account specific
qualification requirements and the aforementioned criteria, the
Presidential Committee creates a shortlist of available candi-
dates whom it interviews. It then recommends a candidate to
the Supervisory Board for its approval and includes an expla-
nation of its recommendation. Decisions regarding appointments
to the Board of Management are always governed by the
Company’s interests under consideration of all circumstances
in each individual case.
Supervisory Board
In accordance with applicable law, the Supervisory Board is to
be composed so that its members together are knowledgeable
about the business sector in which the Company operates.
The requirements profile for the Supervisory Board of Daimler
AG also aims at a Supervisory Board as diverse and mutually
complementary as possible. The Supervisory Board as a whole
shall understand the Company’s business model and also pos-
sess the knowledge, skills and experience needed to properly
execute its task of supervising and advising the Board of
Management, in particular specialized knowledge in the areas
of finance, accounting, annual audits, risk management,
methods of internal control and compliance. In general, the
members of the Supervisory Board should complement one
another with regard to their specialist knowledge and profes-
D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT 193
sional experience in such a manner as to ensure that the
Supervisory Board can utilize the most broadly based wealth
of experience and expertise possible when making decisions.
The Supervisory Board also views the diversity of its members
in terms of age, gender, internationality and other personal
attributes as an important foundation for effective cooperation.
The foundation for Supervisory Board decisions regarding pro-
posals on candidates for election at the Shareholders’ Meeting
is always the Company’s interests under consideration of all
circumstances in each individual case.
The requirements profile for the Supervisory Board currently
includes the following aspects in particular:
– The members of the Supervisory Board should have different
educational and professional backgrounds. At least five
members should have completed a vocational technical
training or education program or possess specific technolog-
ical knowledge in fields such as information technology
(including digitalization), chemistry, mechanical engineering
or electrical engineering. Decisions related to the composi-
tion of the Supervisory Board should also take into account
the fact that it may be necessary for members to obtain new
skills and knowledge in order to be able to address product
and market developments. Irrespective of the specific
knowledge in the above-mentioned areas acquired by many
members of the Supervisory Board in other functions,
Dr. Jürgen Hambrecht, Dr. Bernd Pischetsrieder, Marie Wieck,
Dr. Frank Weber and Roman Zitzelsberger (three shareholder
representatives and two employee representatives) have
relevant university degrees, while another three employee
representatives have completed vocational training in the
above-mentioned fields or similar areas.
– The gender composition of the Supervisory Board meets the
legal requirement stipulating that at least 30% of the mem-
bers of the Supervisory Board must be women and at least
30% must be men. The Supervisory Board currently has
three women who represent shareholders and three women
who represent employees. The proportion of women is thus
30% among the shareholder representatives, the employee
representatives and the Supervisory Board as a whole.
– The rules of procedure of the Supervisory Board stipulate
that candidates for election who are to hold the position for
a full term of office should generally not be over the age of
72 at the time of the election. In specifying this age limit, the
Supervisory Board has intentionally refrained from stipulat-
ing a strict upper age limit and instead decided in favor of a
flexible general limit that leaves scope to appropriately
assess each individual case, keeps the range of potential
Supervisory Board candidates sufficiently broad and allows
reelection. In deciding to propose Dr. Manfred Bischoff for
reelection as a shareholder representative on the Supervi-
sory Board at the Shareholders’ Meeting in 2016, it made
use of this scope after careful consideration and proper
assessment. All other members of the Supervisory Board
and the candidate Timotheus Höttges who is to be proposed
for election at the 2020 Annual Shareholders’ Meeting will
not have reached the age limit at the time of their election.
– A sufficient generational mix among Supervisory Board
members is also to be taken into account in appointment
decisions. At least eight members of the Supervisory Board
should be 62 years of age or younger at the time of their
election or reelection. Among the current members of the
Supervisory Board, all except Sari Baldauf, Petraea Heynike,
Dr. Manfred Bischoff, Dr. Clemens Börsig, Dr. Jürgen Ham-
brecht and Dr. Bernd Pischetsrieder (i.e. 14 members) were
62 or younger when they were elected to their current term.
– In order to ensure sufficient internationality, for example by
means of many years of international experience, the
Supervisory Board has set a target of a proportion of at least
30% of international members representing the sharehold-
ers, and the resulting proportion of at least 15% of the entire
Supervisory Board. Irrespective of the many years of inter-
national experience of a large majority of the shareholder
representatives on the Supervisory Board, this target is cur-
rently significantly overachieved with 30% for the entire
Supervisory Board due to the international origins of Bader
Al Saad, Sari Baldauf, Petraea Heynike, Marie Wieck and
Dr. Paul Achleitner on the shareholders’ side (50%) and Ray-
mond Curry on the employees’ side.
– At least half of the members of the Supervisory Board
representing the shareholders should have
· neither an advisory nor a board function for a customer,
supplier, creditor, or other third party,
· nor a business or personal relationship to the company
or its boards
whose specific form could cause a conflict of interest.
Under the premise that the performance of Supervisory Board
duties as an employee representative does not by itself consti-
tute a potential conflict of interest as defined by the German
Corporate Governance Code, the requirements described here
are deemed to be met by at least 15 members of the entire
Supervisory Board.
Roman Zitzelsberger was elected as a member and as the
Deputy Chairman of the Supervisory Board of ZF Friedrich-
shafen AG, which is a significant supplier to the Daimler Group,
at the end of November 2019. The Supervisory Board of
Daimler AG does not currently regard this non-executive man-
date per se as giving rise to a conflict of interest. In the event
that such a conflict of interest arises in the future, the question
of whether Mr. Zitzelsberger should not participate in corre-
sponding discussions and passing of resolutions by the Super-
visory Board will be considered on a case-by-case basis.
As described in the report of the Supervisory Board on
E page 37 of the Annual Report 2019, there were individual
cases concerning two Supervisory Board members in particu-
lar situations during the reporting period where there might
have been the appearance of a potential conflict of interest at
the time when legal status reports were submitted to the
Supervisory Board. In these individual cases the Supervisory
Board members in question did not attend the reporting of the
circumstances that could possibly have given rise to a poten-
tial conflict of interest.
194 D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT
As a result, in the case of at least half of the shareholder repre-
sentatives on the Supervisory Board and at least 15 members
of the entire Supervisory Board, there were no indications of a
potential conflict of interest during the reporting period based
on the premise described above. There were no indications of
actual conflicts of interest in the financial year 2019.
– In order to ensure the independent advice to, and supervi-
sion of, the Board of Management by the Supervisory Board,
the rules of procedure of the Supervisory Board stipulate
that more than half of the members of the Supervisory
Board representing the shareholders are to be independent
as defined by the German Corporate Governance Code.
The Supervisory Board may not include more than two former
members of the Board of Management of Daimler AG or
anyone who is a member of a board of, or advises, a signifi-
cant competitor of the Daimler Group.
Under the premise that the performance of Supervisory Board
duties as an employee representative does not in itself call
into question the independence of such an employee represen-
tative as defined by the German Corporate Governance Code,
at least 15 members of the Supervisory Board are also deemed
to be independent.
The Code in the version dated February 7, 2017 does not con-
tain a conclusive definition of independence, but instead
presents examples of circumstances that would call the inde-
pendence of a Supervisory Board member into question.
Within the meaning of the German Corporate Governance Code,
a Supervisory Board member is to be considered non-inde-
pendent if he or she has a personal or business relationship
with the Company, its governing bodies, a controlling share-
holder or a company affiliated with a controlling shareholder
that may cause a substantial and not merely temporary
conflict of interest. It is the task of the Supervisory Board to
assess the independence of the individual members of
the Supervisory Board on the basis of these indications.
Under the premise described above with regard to the
employee representatives, and within the meaning of the German
Corporate Governance Code in the version dated February 7,
2017, there are, in the view of the Supervisory Board, no indi-
cations at present for any of the members of the Super visory
Board that relevant relationships or circumstances exist that
could be construed as a substantial and permanent conflict of
interest that would compromise their independence. No mem-
ber of the Supervisory Board is a member of a board of, or
advises, a significant competitor. With regard to Supervisory
Board member Bader Al Saad, the Supervisory Board takes
the view that his membership of the Executive Committee of
the Board of Directors of Kuwait Investment Authority does
not compromise his independence within the meaning of the
German Corporate Governance Code. E The Kuwait Investment
Authority is not a controlling shareholder of Daimler AG that
could attain an effective majority at an Annual Shareholders’
Meeting. No other discernible circumstances exist that might
call into question the independence of Bader Al Saad. With
regard to Supervisory Board member Roman Zitzelsberger, the
Supervisory Board takes the view that his mandate as a mem-
ber and as the Deputy Chairman of the codetermined Super-
visory Board of ZF Friedrichshafen AG, a significant supplier
to the Daimler Group, cannot per se give rise to a substantial
and not merely temporary conflict of interest. On the one
hand, this is not an executive, but rather a non-executive man-
date. On the other, the Deputy Chairman of the Supervisory
Board of a codetermined company does not have the right of
the Chairman of the Supervisory Board to a casting vote in
the event of a tie and renewed voting even in the absence of
the Chairman.
The Chairman of the Supervisory Board, Dr. Manfred Bischoff,
is a former member of the Board of Management.
– The rules of procedure of the Supervisory Board also define
a general time limit for the duration of Supervisory Board
membership. As a result, only candidates who have not yet
been members of the Supervisory Board for three full terms
of office at the time of their election should generally be
nominated for membership of the Supervisory Board for a
full term of office. This general length of service on the
Supervisory Board has not been exceeded by any current
member, and the candidate Timotheus Höttges nominated
for election at the Annual Shareholders’ Meeting in 2020
also meets this requirement.
– Candidates for membership of the Supervisory Board and
members of the Supervisory Board must have sufficient time
available to perform their duties. They must also be willing
and able to dedicate themselves to their tasks and to partici-
pate in all courses of training and further training that might
be necessary for the performance of their tasks. Prior to
issuing its election proposals, the Supervisory Board deter-
mines whether the candidates in question will have sufficient
time available to perform their duties on the Supervisory
Board.
– In order to ensure compliance with a recommendation of
the German Corporate Governance Code in the version dated
February 7, 2017, the rules of procedure stipulate that no
member of the Supervisory Board who is also a member of
the board of management of a listed company may hold
more than three memberships of supervisory boards of listed
companies (including his or her membership of the Super-
visory Board of Daimler AG) or of bodies of other companies
with similar requirements outside of the group of his or
her board of management membership. One member of the
Supervisory Board, Joe Kaeser, is a member of the board
of management of a listed company who has now exceeded
the maximum number of supervisory board memberships
due to his new membership on the Supervisory Board of
Mercedes-Benz AG. In view of this development, the Super-
visory Board has decided for the time being not to take into
account membership on two Supervisory Boards within
the Daimler Group when determining whether the maximum
number of board memberships has been exceeded within
the meaning of the requirements profile and the rules of pro-
cedure. Nevertheless, the Board of Management and the
Supervisory Board also released an intra-year declaration of
compliance in September 2019 that discloses and explains
this deviation from the maximum number of board member-
ships according to the rules of procedure and the require-
ments profile as defined on the basis of the recommendation
of the German Corporate Governance Code in the version
dated February 7, 2017. This deviation is also disclosed and
explained in the regular annual declaration of compliance
from December 2019.
D | CORPORATE GOVERNANCE | DECLARATION ON CORPORATE GOVERNANCE, CORPORATE GOVERNANCE REPORT 195
In the case of Supervisory Board members who are not also
members of the board of management of a listed company, the
legal limit of membership of ten statutorily constituted super-
visory boards applies firstly, whereby chairmanship of a super-
visory board counts double. In order to ensure that members
of the Supervisory Board have sufficient time to fulfill their
mandate, members of the Supervisory Board of Daimler AG who
are not also members of the board of management of a listed
company shall, however, generally be permitted membership
of a maximum of eight supervisory boards (including that of
Daimler AG), whereby chairmanship of a supervisory board
counts double. This maximum number was not exceeded
by any member of the Supervisory Board during the reporting
year.
Proposals by the Supervisory Board of candidates for election
by the Shareholders’ Meeting as Supervisory Board members
representing the shareholders of Daimler AG, for which the
Nomination Committee makes recommendations, shall take
into consideration the aspects described above and aim to ful-
fill the overall requirements profile for the Supervisory Board
as a whole. On the basis of a target profile that takes into
account specific qualification requirements and the aforemen-
tioned criteria, the Nomination Committee creates a shortlist
of available candidates with whom it conducts structured
discussions in which it also determines whether the candidate
in question will have sufficient time available to perform his
or her duties on the Supervisory Board with due care. The
Nomination Committee then recommends a candidate to the
Supervisory Board for its approval and includes an explanation of
its recommendation. The foundation for Supervisory Board
decisions regarding election proposals to the Shareholders’
Meeting is always the Company’s interests under consideration
of all circumstances in each individual case.
Review of the overall requirements profiles for the Board
of Management and the Supervisory Board
The Supervisory Board shall review the overall requirements
profiles for its own composition and the composition of the
Board of Management, and amend these if necessary, after the
new German Corporate Governance Code goes into effect,
which is expected to be sometime in the first quarter of 2020.
Shareholders and the Shareholders’ Meeting
The shareholders exercise their membership rights, in par-
ticular their information and voting rights, at the Shareholders’
Meeting. Each share in Daimler AG entitles its owner to one
vote. There are no multiple voting rights, preferred voting rights,
or maximum voting rights at Daimler AG. Documents and infor-
mation related to the Shareholders’ Meeting can be found on
our website at w daimler.com/ir/am. The Annual Shareholders’
Meeting is generally held within four months of the end of a
financial year.
The Company facilitates the personal exercise of the share-
holders’ rights and proxy voting in a variety of ways, such as by
appointing Company proxies who are strictly bound by the
shareholders’ voting instructions and who are available during
the Shareholders’ Meeting. Absentee voting is also possible.
It is possible to authorize the Daimler-appointed proxies and
give them voting instructions or to cast absentee votes by
using the e-service for shareholders.
We maintain close contacts with our shareholders in the
context of our comprehensive investor relations and public rela-
tions activities. We regularly and comprehensively inform our
shareholders, financial analysts, shareholder associations, the
media and the interested public about the situation of the
Group, and inform them without delay about any significant
changes in its business. Within reasonable limits, the Chairman
of the Supervisory Board is also prepared to talk to investors
about specific Supervisory Board issues.
In addition to other methods of communication, we also make
extensive use of the Company’s website for our investor
relations activities. All of the important information disclosed
in 2019, including annual and interim reports, press releases,
voting rights notifications from major shareholders, presenta-
tions, and audio recordings of analyst and investor events
and conference calls, as well as the financial calendar, can be
found at w daimler.com/investors. All the dates of important
disclosures such as annual reports and interim reports and the
dates of the Annual Shareholders’ Meeting, the annual press
conference and the analyst conferences are announced in
advance in the financial calendar. The financial calendar can
also be found inside the rear cover of the Annual Report.
E
Non-
Financial
Report
On the following pages, we publish the non-financial report in accordance
with Sections 289b – 289e, 315b and c of the German Commercial Code
(HGB). This report applies to Daimler AG and to the Daimler Group. It contains
the main information on the aspects of environmental, employee and social
matters, combating corruption and bribery, and respect for human rights.
E | NON-FINANCIAL REPORT | CONTENTS 197
E | Non-Financial Report
Sustainability at Daimler
198
Social Issues
198
Our sustainable business strategy
Sustainable corporate governance
198
Risk management 199
199
Supply chain
Incorporation of stakeholder
Political dialog and representation of interests
Integrity and Compliance
208
208
209
211
Environmental Issues
Climate protection
Air pollution control
Resource conservation
Employee Issues
Partnership with the employees
Employer attractiveness
A competitive workforce
Occupational health and safety
200
200
201
201
203
204
204
205
207
211
Integrity Management
212
Our Compliance Management System
Anti-corruption compliance
215
Antitrust compliance 215
216
Technical compliance
217
Data compliance
218
Anti-financial-crime compliance
219
Human-rights compliance
Statement on the Review of the
Non-Financial Report
220
The information provided in this report is presented in conformity with the GRI
Standards of the Global Reporting Initiative, insofar as this complies with appli-
cable law. Some aspects are presented in accordance with internal guidelines
and definitions.
s
t
n
e
t
n
o
C
i
d
e
n
b
m
o
C
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
s
n
o
i
s
i
v
i
D
e
h
T
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
t
r
o
p
e
R
l
i
a
c
n
a
n
F
-
n
o
N
i
Information on our business model (E pages 60 ff of the Annual Report 2019)
and on non-financial risks connected with the aspects presented in this report
(Risk and Opportunity Report E page 149 of Annual Report 2019) is provided
in the Combined Management Report in the Annual Report 2019.
d
e
t
a
d
i
l
o
s
n
o
C
s
t
n
e
m
e
t
a
t
S
l
i
a
c
n
a
n
F
i
Further information on our sustainability activities can be found online at
w daimler.com/sustainability and in our annual Sustainability Report, which
can be downloaded there as a PDF data file.
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
r
u
F
198 E | NON-FINANCIAL REPORT | SUSTAINABILITY AT DAIMLER
Sustainability at Daimler
At Daimler, sustainability means creating lasting economic and social value for all stakeholders –
i.e. our customers, employees, investors, business partners, and society as a whole. The foundation
for our approach here is the Daimler sustainable business strategy adopted by the Board of
Management in 2019. E page 52 ff With this strategy, the company assumes responsibility for the
economic, ecological, and social impact of its business activities, not only at its manufacturing
locations but also with regard to the entire upstream and downstream value chain.
Our sustainable business strategy
Our sustainable business strategy demonstrates our commit-
ment to sustainable business operations at both the Group
level and in the individual business divisions. More specifically,
our strategic objectives involve the following six areas of
action:
– Climate protection and air pollution control: Plans call for
our new vehicle fleet to be CO2-neutral by 2039, when it will
no longer have any relevant impact on air quality in inner
cities.
– Conservation of resources: We will decouple resource con-
sumption from business volume growth.
– Livable cities: We will offer our leading mobility and trans-
port solutions in order to improve the quality of life in cities.
– Traffic safety: We are working to make our vision of acci-
dent-free driving a reality as we develop automated driving
systems while also taking social and ethical issues into
account.
– Data responsibility: We conduct sustainable data-based
business operations, anticipate our customers’ needs, and
handle all data responsibly.
– Human rights: We have assumed responsibility for respect-
ing and upholding human rights along our automotive value
chain.
We have set ourselves the goal of making sustainability an inte-
gral component of our core business and our conduct in gen-
eral. Achieving this goal requires future-oriented cooperation
with our partners in industry, government, and society at large,
as well as with our employees, who will help shape the coming
transformation. The three enablers, or principles, of “Integrity,”
“Employees” and “Partnerships” are crucial for achieving suc-
cess in the six areas of action.
While formulating our strategic goals in the six areas of action,
we focused extensively on the 17 Sustainable Development
Goals (SDGs) defined by the United Nations, and in particular
on the following SDGs and the associated sustainability-
related activities:
– SDG 8 – Decent Work and Economic Growth
– SDG 9 – Industry, Innovation and Infrastructure
– SDG 11 – Sustainable Cities and Communities
– SDG 12 – Responsible Consumption and Production
– SDG 13 – Climate Action
By adopting the six areas of action and the three enabler top-
ics, we have firmly established the aforementioned SDGs
as a component of our business strategy. We want to make an
effective contribution to sustainable development by imple-
menting this strategy.
Sustainable corporate governance
The short-term and medium-term components of the remunera-
tion – the Daimler Company Bonus – have been further devel-
oped for the Board of Management and Level 1–3 managers,
with effect as of January 1, 2019. These components are linked
not only to financial targets but also to sustainability-related
transformation targets and non-financial targets that focus on
employees, customers, integrity, and diversity. The transfor-
mation targets in particular are closely examined within the
frame work of the annual review of the Daimler Company Bonus,
whereby the targets for 2020 will be even more closely
aligned with the company’s sustainable business strategy.
In accordance with this strategy, we are pursuing our defined
targets in the six areas of action and establishing a continuous
improvement process. Our management and organizational
structures support this process by means of clear lines of
responsibility in all business divisions. The Group Sustainability
Board (GSB) is our central management body for all sustain-
ability issues and reports to the Board of Management. The
GSB is headed by Renata Jungo Brüngger (the Board of Man-
agement member responsible for Integrity and Legal Affairs)
and Markus Schäfer (the Board of Management member
responsible for Group Research & Mercedes-Benz Cars Devel-
opment). The operational work is done by the Sustainability
Competence Office, which consists of representatives from the
units managed by the two Co-chairs.
Integrity, compliance, and legal responsibility are the corner-
stones of our sustainable corporate governance and serve as
the basis of all our actions as defined in our Integrity Code.
The Integrity Code is supplemented by other in-house princi-
ples and policies.
E | NON-FINANCIAL REPORT | SUSTAINABILITY AT DAIMLER 199
direct suppliers commit themselves to observing our sustain-
ability standards, communicating them to their employees and
to their upstream value chains, and then checking to ensure
that the standards are complied with. We support them in
these activities by providing them with information and training
and qualification measures. Our service providers also explic-
itly recognize these standards as a contractual component of
their supplier agreements.
Compliance with the standards is systematically reviewed.
For example, the procurement units of Mercedes-Benz Cars
and Daimler Trucks & Buses examines the sustainability poli-
cies of new production material suppliers in on-site inspec-
tions. Such examinations are even more thorough in high-risk
countries, and in particularly critical cases we discuss the
results of the analyses in management committees and take
them into account in decisions on whether to award a contract.
Along with the assessment of new suppliers, we also examine
sustainability risks at our existing direct suppliers within the
framework of risk analyses conducted on a regular basis.
Among other things, we conduct annual database research to
identify any violations of our sustainability and compliance
rules by our current suppliers. This is part of our supplier
screening process. Mercedes-Benz Cars also conducts corpo-
rate social responsibility (CSR) audits and potential analyses
of new suppliers.
We systematically follow up all reports of violations, and
Mercedes-Benz Cars utilizes online surveys here as well. These
surveys require suppliers to provide information about their
sustainability management system and the measures they take
to ensure that their own suppliers comply with sustainability
standards. If the results of such surveys indicate insufficient
sustainability performance, we instruct the supplier in question
to improve the relevant processes. In order to ensure an effec-
tive sustainable supplier management system, it is very im-
portant to us that the results of the surveys can be compared.
For this reason, we work with standardized instruments such
as the industry-wide sustainability Self-Assessment Question-
naire developed by the European Drive Sustainability initiative.
In 2019, we held training courses for suppliers in the focus
countries Brazil, Malaysia, and South Africa in cooperation
with Drive Sustainability – a European sustainability initiative.
In addition, we assisted the econsense – Forum for Sustain-
able Development of German Business network with the
establishment of a platform for further supplier workshops on
sustainability. Our Daimler Supplier Portal offers existing and
potential suppliers a free e-learning program on compliance
awareness that allows suppliers to obtain detailed information
at any time on sustainability standards and their implementation.
The ten principles of the UN Global Compact provide a funda-
mental guide for our business operations. As a founding
member and part of the LEAD group, we are strongly commit-
ted to the Global Compact. Our internal principles and policies
are founded on this international frame of reference and other
international principles, including the Core Labor Standards
of the International Labour Organization (ILO), the OECD
Guidelines for Multinational Enterprises, and the UN Guiding
Principles on Business and Human Rights.
Risk management
The Daimler Group is exposed to a large number of risks that
are directly linked with the business activities of its divisions
or which result from external influences. A risk is understood
as the danger that events, developments or actions will pre-
vent the Group or one of its divisions from achieving its targets.
Risks can be of either a financial or non-financial nature. At
the same time, it is important for the Daimler Group to identify
opportunities for the Group so that they can be utilized in
the course of its business activities, thus safeguarding and
enhancing the Group’s competitiveness. An opportunity is
understood as the possibility to safeguard or to surpass the
planned targets of the Group or a division as a result of events,
developments or actions. In particular, the actions taken by
the company with regard to environmental, employee, and
social issues, the battle against corruption and bribery, and
upholding human rights play a key role in the way we are cur-
rently viewed by the public, and can thus potentially result in
non-financial risks as well as opportunities. The divisions have
direct responsibility for recognizing and managing business
risks and opportunities at an early stage. Our Group-wide risk
management system provides the framework for the responsi-
ble management of existence-threatening and other material
risks. The risk management system is integrated into the value-
based management and planning system of the Daimler Group
and is also an integral part of the overall planning, manage-
ment, and reporting process in the legal entities, divisions, and
corporate functions. The risk management system is intended
to systematically and continually identify, assess, control, moni-
tor, and report risks threatening Daimler’s existence and other
material risks, in order to support the achievement of corpo-
rate targets and to enhance risk awareness at the Group. See
also the Risk and Opportunity Report,
E pages 135 ff.
Supply chain
Daimler’s sustainable business strategy applies to our value
chain and thus also to the purchase of production materials
and the procurement of services. Our three procurement units –
Mercedes-Benz Cars Procurement and Supplier Quality,
Global Procurement Trucks and Buses, and International Pro-
curement Services – are jointly responsible for the Daimler
Supplier Network cooperation model. These units work together
to ensure the responsible procurement of materials and ser-
vices and compliance with the Daimler Supplier Sustainability
Standards in the supply chain. Our Supplier Sustainability
Standards define our requirements for working conditions,
upholding human rights, environmental protection, safety,
business ethics, and compliance E page 219, Human rights
compliance. They also serve as the guidelines for our sustain-
able supply chain management system. We demand that our
200 E | NON-FINANCIAL REPORT | ENVIRONMENTAL ISSUES
Environmental Issues
Protecting the environment is a primary corporate objective of our Group. Environmental protec-
tion is not separate from other objectives at Daimler, but is an integral component of our sustain-
able business strategy. The central environmental aspects we address are climate protection, air
pollution control, and resource conservation.
monitor compliance with our internal development targets and
the requirements contained in the product performance speci-
fications. In the Energy Efficiency Board (EEB), which includes
Board of Management participation, the managers responsible
for each vehicle model series evaluate the results of this moni-
toring process. In their evaluations, the managers take into
account the increasing degree of vehicle electrification and the
changes that have been made to legal requirements, for exam-
ple those relating to the introduction of the new WLTP test pro-
cedure. If corrective actions are required, the managing body
of the respective business division is included in the decision-
making. The exact level of the CO2 emissions of individual vehi-
cles is determined within the framework of the fuel-economy
certification process.
Nevertheless, the fact remains that the attainment of the EU
limits will greatly depend on the level of customer demand for
all-electric vehicles and plug-in hybrids.
CO2 emissions from our car fleet
For the year under review, it is expected that the average
CO2 emissions of our total passenger car fleet in Europe (EU28
+ Iceland, Norway) will have increased to 137 g/km (NEDC,
including vans registered as passenger cars (M1), Mercedes-
Benz Cars: 135 g/km). This means that we were unable to
reduce our CO2 emissions from the prior-year level. There were
several reasons for this development. The first involves the
shift of sales from vehicles with diesel engines to cars powered
by gasoline engines. Secondly, 2019 was the first year in
which the rollout of the WLTP certification process had its full
impact. We intend to achieve our objective of reducing our
CO2 emissions for 2020 and thus continue to conform to the
currently valid EU limit values by means of a planned expan-
sion of our portfolio to include further electric vehicle models
and accommodate customer demand. E pages 135 ff, Risk
and Opportunity Report
Climate protection
The transition to CO2-neutral mobility is vital if the impact of
climate change is to be limited. We at Daimler are working hard
to make this vision a reality. In this connection, we have set
ourselves the goal of making the mobility of the future more
sustainable, and we are employing a holistic approach in order
to achieve this goal. One component of our approach involves
reducing the CO2 emissions of our vehicles.
Within the framework of our sustainable business strategy,
our company has expressed its firm commitment to the Paris
accord on climate protection. Mercedes-Benz AG has had
its climate protection measures scientifically confirmed by the
Science Based Targets Initiative (SBTI). By means of these
targets, the company wants to contribute to environmental
protection in the sense of the Paris Agreement.
In our sustainable business strategy, we have also set ourselves
the goal of making our fleet of new cars CO2-neutral for the
vehicles’ entire lifecycle by 2039. Daimler Trucks & Buses aims
to offer only new vehicles that are CO2-neutral in driving
operation (“tank-to-wheel”) in the triad of Europe, Japan, and
NAFTA by 2039. Mercedes-Benz Vans is currently striving
to achieve similar reductions in CO2 emissions. In order to
achieve this goal, we want to significantly increase sales
of passenger cars equipped with plug-in hybrid and all-electric
drive systems. In this connection, we want to electrify the
entire portfolio of Mercedes-Benz Cars by 2022, which means
that various electric alternatives are to be offered in every
segment – from compact cars to SUVs. By the year 2025, we
expect all-electric models to account for up to 25%. By 2030,
plug-in hybrids and all-electric models should account for
more than 50%.
A new average CO2 target value of 95 g/km went into effect in
2020 for the entire fleet of new cars in the EU. The applicable
limit for individual manufacturers is based on the average vehi-
cle weight of the respective vehicle fleet. The limit for our
fleet of new cars will be higher due to the high average weight
of the vehicles in our model range. We take compliance with
this new requirement into account as early as the vehicle
development stage by employing our Design for Environment
approach E page 342, Glossary. In order to continuously
improve environmental compatibility, these requirements are
incorporated into our product performance specifications.
These specifications define specific characteristics and target
values – for example for fuel economy and CO₂ emissions –
that must be achieved for every vehicle model and every
engine variant. During the development process, we regularly
E | NON-FINANCIAL REPORT | ENVIRONMENTAL ISSUES 201
CO2 fleet emissions of Daimler Trucks & Buses
Daimler Trucks & Buses aims to offer only new vehicles that are
CO2-neutral in driving operation (“tank-to-wheel”) in the triad
of Europe, Japan, and NAFTA by 2039. As early as 2022, the com-
pany plans to have a vehicle portfolio comprising series-pro-
duced vehicles with battery-electric drive systems in these main
sales regions. In order to achieve these targets and meet
future legal stipulations in certain countries regarding the reduc-
tion of vehicle emissions and fuel consumption, Daimler
Trucks & Buses has to employ the latest technology and enhance
its range of battery-electric trucks and vehicles with other
electrified drive systems. E pages 135 ff, Risk and Opportu-
nity Report
An important role is also being played by the launch of vehicles
that comply with the Euro 6d-TEMP emissions standard. In
the meantime, all Mercedes-Benz passenger cars that can be
ordered as new vehicles now comply with this standard at a
minimum.
Maintaining the trust of our customers is extremely important
to us. Information about how the Company handles official
inquiries, investigations, requirements, and proceedings relat-
ing to environmental laws and regulations in connection with
diesel exhaust gas emissions can be found in the Risk and
Opportunity Report. E pages 135 ff, Risk and Opportunity
Report
Air pollution control
Resource conservation
In addition to climate protection, the improvement of inner-city
air quality is an important environmental consideration for us.
That’s because road traffic still accounts for a considerable
share of nitrogen dioxide pollution (NO2) near roads.
Plans call for our new vehicle fleet to no longer have any rele-
vant impact on NO2 emissions in urban areas by 2025. Another
of our aims is to increase transparency with regard to vehicle-
related particulate emissions and forge ahead with the
research and development of new measures for reducing such
emissions.
Responsibility for ensuring compliance with air pollution con-
trol requirements in the area of exhaust gas emissions is split
between several units and executive divisions. At the vehicle
level, the development departments at the vehicle divisions are
responsible for ensuring such compliance.
A reduction of NOx emissions is made possible by an innovative
overall package consisting of the engine and the exhaust treat-
ment system. This package is being continuously enhanced and
has been comprehensively launched on the market in the new
engine generation encompassing the OM 654, 656, and 608.
Overall, Daimler is developing software updates for a majority
of its fleet of Euro 6b and Euro 5 diesel cars in Europe. These
updates improve the nitrogen oxide emissions of the vehicles
in normal operating status by 25 to 30 percent on average.
This will be verified with the WLTC 1, 2, 3 measurement cycle.
As early as 2017 Daimler announced that it would offer volun-
tary service measures that would include software updates
for several millions of diesel vehicles in Europe. The company
has since then extended this update campaign, among other
things to include van models. Daimler has in addition been car-
rying out obligatory recalls – during which software updates
are also applied – at the order of Germany’s Federal Motor
Transport Authority (KBA) since 2018.
Along with fuel economy and emissions during vehicle opera-
tion, the processes used to manufacture our vehicles also play
a key role in determining their environmental compatibility. For
this reason, we work continuously to make production more
efficient by, for example, reducing waste, utilizing closed-loop
water systems, and recycling batteries from electric vehicles.
Production
Mercedes-Benz Cars is setting the course for green production
in Germany and the rest of Europe in order to reduce the
impact our plants have on the climate. Plans call for all manu-
facturing facilities in Europe to be supplied with CO2-neutral
energy from 2022. Conservation of resources, including every-
thing from water to energy and raw materials, continues to
hold the key to improving the ecological footprint of our manu-
facturing operations. Increasing our energy efficiency not only
reduces our consumption of fuels; it also lowers energy con-
sumption as a whole and thus the CO2 emissions (E page
200, Climate Protection) produced at our plants. The improve-
ment of recycling processes and reduced consumption of raw
materials at our sites have the potential to reduce waste, while
reductions in our water consumption lower the impact our pro-
duction operations have on natural water resources.
Our commitment to the environment is an integral component
of our sustainable business strategy. For this reason, we have
established environmental management systems at our manu-
facturing locations. In addition, our Environmental Management
Manual defines a standardized Group-wide framework for our
environmental management systems. The manual describes
our environmental and energy guidelines in detail, as well as key
environmental protection provisions of relevance to the Group.
We regularly check to ensure that all of our plants comply with
these environmental protection provisions. Any incidents rele-
vant to environmental protection that occur at production loca-
tions that are majority-owned by the Group are documented
within the framework of the plant environmental management
systems. We then take all necessary measures to eliminate any
damage. We also implement measures for improvement wher-
ever this is possible and expedient. The environmental mea-
sures are monitored by external auditors as part of the certifi-
cation process for our environmental management systems
(ISO 14001, EMAS, ISO 50001), as well by internal environmen-
tal risk assessments ( E.01, Environmental-Due-Diligence-
Process).
202 E | NON-FINANCIAL REPORT | ENVIRONMENTAL ISSUES
Since the year 2000, we have been using a Group-wide stan-
dardized method for assessing environmental risks (environ-
mental due diligence process) in order to prevent such risks
and comply with statutory requirements. We employ this
method both internally at all production locations in which the
Group has a majority interest, as well as externally in connec-
tion with our acquisition plans. We also have a standardized
process in place for inspecting and assessing the Group’s con-
solidated production sites every five years. The results are
reported to the plants and divisional managements. In 2019,
we evaluated all the production locations that are operated by
the Mercedes-Benz Cars division and majority-owned by the
Group. In addition, we annually assess the extent to which our
recommendations for minimizing risks at the locations have
been put into practice. The objective of all of our environmen-
tal risk assessments is to ensure that we achieve high environ-
mental standards at all of our production locations around the
world.
Products
During the development of our Mercedes-Benz car models we
prepare a recycling concept for every vehicle model. This con-
cept includes an analysis of the suitability of all components
and materials for the various stages of the recycling process.
As a result, all Mercedes-Benz car models are 85 percent recy-
clable and 95 percent recoverable, in accordance with
ISO 22 628.
In order to evaluate the environmental compatibility of a vehi-
cle, Daimler has for many years now been producing life cycle
assessments and examining environmental effects throughout
the vehicle’s entire life cycle – from the extraction of raw mate-
rials and vehicle production to product use and recycling. In
addition to raw material consumption, these examinations take
into account other factors such as the medium-term and long-
term availability of raw materials.
Environmental protection and resource conservation are coor-
dinated and managed in various units throughout the Group.
Group management is involved when fundamental decisions
regarding vehicle development are made and when targets are
defined for climate protection, air quality, and resource conser-
vation.
E.01
Methodology for assessing environmental risks
Feedback to plant management and divisional management
Inspection of
documents
Interviews
Tours
s
a
e
r
a
c
i
p
o
T
Environmental management
Emissions into the atmosphere
Discharge into bodies of water
Waste management
Soil/groundwater contamination
Dealing with hazardous materials
Implementing measures
at the plants
E | NON-FINANCIAL REPORT | EMPLOYEE ISSUES 203
Employee Issues
The success of Daimler AG and its subsidiaries is largely dependent on the skills and commitment
of its employees. Almost 300,000 people promote our company’s success worldwide by contribut-
ing their concepts and ideas to their respective tasks and work processes and by helping to make
improvements and create innovations. Trusting relationships with employees are therefore more
than just an ethical and legal requirement for us – without them we would not be able to conduct
our business successfully.
In order to be able to recruit, further develop, and retain quali-
fied employees, we seek to present ourselves around the globe
as an attractive employer and to motivate our employees to
achieve top performance in the digital world. Our management
staff play a key role here, so it is crucial that we equip our
managers with outstanding leadership capabilities. In addition,
we want to take on our social responsibility and let diversity
flourish in our global company.
We want to reach these overarching goals by employing efficient
processes. One of the control tools we use is our HR Score-
card, which uses key performance indicators (KPIs) concerning
e.g. demographic development, diversity, and employer
attractiveness. This enables us to evaluate the sustainability of
human resources measures and processes in the individual
areas of action. These are derived from our HR Strategy
E.02. HR-eData Manager Reports serve as another control
tool. These reports are available to all managers as a self-ser-
vice feature. They contain KPIs and detailed information on
managers’ personal areas of responsibility.
General figures regarding the development of our workforce
numbers can be found in the Workforce section of the Manage-
ment Report. E pages 102 ff
Our Group-wide employee survey is a key indicator of where we
currently stand from the point of view of our employees and
what we need to do to improve the company in the future. The
survey is conducted every two years, with the next one sched-
uled for 2020.
E.02
HR Strategy 2025
Daimler – Best Team
We provide innovative & efficient HR solutions to …
Vision
Mission
Competitive
workforce
…attract, develop and retain the
right people
Forward-looking,
skilled leadership
…enable our management to shape
the framework of the future
Employer of choice
Profitability
Strategic pillars
…foster a diverse, empowering, and
inspiring culture
…ensure continuous competitive-
ness
Mission
1
0
11
00
01
10
011
110
100
0100
100
0101
10100
01111
00011
1000001
001111001
0
10
111
010
101
0
1
0
001
0
0
110
011
1001
0010
1100
1
10
01
101
1101
0010
Digitalization
0
11
10
00
011
01010
01
11
1011
10100
Operational excellence in HR
And we act as one team
0
1
11
01
00
11
010
101
1010
1101
0001
10110
001001
111110
110100
101000101
0101111010
Basic
204 E | NON-FINANCIAL REPORT | EMPLOYEE ISSUES
Partnership with the employees
We want to work together with our employees as partners,
respect their interests, and get them involved in the company.
An important source of guidance for us here are our Group-
wide Principles of Social Responsibility, which are based on the
International Labour Organization’s (ILO) work and social stan-
dards. All of our employees are provided with information about
these principles. Reports of violations of the principles are
received by the whistleblower system BPO (Business Practices
Office), which directs the subsequent investigations according
to the area of responsibility E pages 213 ff, Integrity and
Compliance.
We structure our decision-making processes in a manner that
ensures transparency for our employees, and we also enable
our employees to participate in decision-making processes. We
work together with our employees as partners, respect their
interests, and get them actively involved in the company. We
have established how we take on responsibility in our employee
relationships in our policies and company agreements. Our
employees have the right to organize themselves in labor unions.
We also ensure this right in countries in which freedom of
association is not legally protected. We work together construc-
tively with the employee representatives and the trade unions.
Important partners here include the local works councils, the
European Works Council, and the World Employee Committee
(WEC). Collective bargaining agreements apply to the majority
of our employees throughout the Group. Such agreements
apply in particular for all of the employees at Daimler AG,
Mercedes-Benz AG, and Daimler Truck AG.
Various (company-wide) agreements grant our employees spe-
cific rights and define additional rules and regulations. These
agreements address topics such as mobile working, family
leave, reductions in working hours, and home health care.
Within the framework of the ongoing dialog between the corpo-
rate management and the employees’ association, employees
at Daimler AG, Mercedes-Benz AG, Daimler Truck AG, and
Daimler Brand & IP Management GmbH & Co. KG have been
given a job-security guarantee for the period until 2029. As a
result, terminations for operational reasons are excluded on
principle until December 31, 2029. This agreement applies to
employees who have remained at Daimler AG, as well as all
employees who were affected by a transition of operations
resulting from the new Group structure and who did not con-
test their transfer to the new organization.
Employer attractiveness
Our activities and measures for enhancing our attractiveness
as an employer are designed to enable us to recruit and retain
a sufficient number of specialized employees and qualified
managers in the competition for talented staff. Our primary
objectives here are to ensure attractive and fair compensation
and to establish and maintain a work culture that enables
outstanding performance and a high level of motivation and
satisfaction among our employees.
Fair remuneration
We remunerate work in accordance with the same principles
at all Group companies around the world. Our Corporate Com-
pensation Policy, which is valid for all groups of employees,
establishes the framework conditions and minimum require-
ments for the design of the remuneration systems. Internal
audits are conducted on a random basis to make sure these
conditions and requirements are met. In our desire to offer
salaries and benefits that are customary in the industry and
the respective markets, we also give consideration to local
market conditions within the specified framework. The salaries
are determined on the basis of each employee’s tasks and
performance and in line with their qualifications and experience.
In setting the remuneration of the employees we are not
guided by gender or origin, but exclusively by the employee’s
function and responsibility.
Employees who have complaints regarding remuneration can
report these to their immediate manager. If the questions can-
not be resolved satisfactorily in this way, employees can con-
tact their HR department or the Works Council. In companies
subject to collective bargaining agreements, such as Daimler
AG, for example, the agreements that have been reached grant
employees additional rights, including the right to object to
their placement in a specific wage/salary group or to the
results of their performance assessment.
In employment relationships subject to a collective bargaining
agreement Daimler AG and its subsidiaries usually offer addi-
tional voluntary benefits that are agreed upon with the respec-
tive employees’ representative bodies. These benefits include
employer-funded contributions to retirement benefits and, in
many cases, profit-sharing agreements for the respective
company as well. For example, the eligible employees of Daimler
AG, Mercedes-Benz AG, and Daimler Truck AG will receive a
profit-sharing participation of €597 for 2019 (for this scope, a
one-time appreciation bonus of up to €500 was also agreed
as a thank you and recognition for the commitment in 2019).
In 2019 the Group spent:
– € 18.336 billion on wages and salaries
– € 3.536 billion on social welfare services, and
– € 0.8 billion on retirement benefits for a workforce
numbering 301,839 on average.
We conduct income reviews for employees and managers on
a regular basis. The associated integration rounds with the
managers in question are carried out under the direction of the
human resources units in a manner that ensures salary deci-
sion-making transparency. This is done in order to prevent any
possibility of discrimination. The remuneration guidelines
and tables for employees paid according to collective bargaining
wage tariffs, for example at Daimler AG, can be viewed on the
Social Intranet. We are now providing to employees additional
information relating to the implementation of Germany’s
remuneration transparency act. This includes information that
shows employees the various remuneration components of
comparable groups of both genders.
The hourly wage we pay temporary workers in the commercial
and industrial units corresponds to the wage offered to newly
hired employees with temporary or permanent contracts in the
same units. This policy, which is based on the master/ERA
collective bargaining agreement for the metalworking industry
in the state of Baden-Württemberg, is adapted in line with the
requirements of the job profile in question.
Modern working conditions
Modern forms of living and working now also include new work
models such as mobile work, reductions in working hours,
part-time work, job sharing for managers, and leave of absence
programs for sabbaticals, training, and home health care.
We have introduced numerous measures and programs that
allow our employees to organize their working times flexibly
in line with their individual situation and enable them to recon-
cile their professional and personal responsibilities. For exam-
ple, Daimler offers its employees throughout Germany child
care places at 14 company facilities, and additional child care
places are available via partnerships.
We also offer our employees opportunities to further develop
their skills and qualifications and to integrate new working
methods and learning techniques into their daily activities.
In order to remain successful in the future, we work constantly
to improve our management culture and the way we cooperate.
This is also why we launched the “Leadership 2020” initiative
in 2016. Employees from more than 23 countries and all levels
of the hierarchy, and of all ages and genders, have participated
in the process of shaping our future management culture. The
initiative has led to the definition of the following new manage-
ment principles: Pioneering Spirit, Agility, Purpose, Learning,
Empowerment, Co-creation, Customer Orientation, and “Driven
to Win.” Among other things, these principles are intended to
make the company faster and more flexible and boost its inno-
vative potential. We have also set up eight sub-projects within
the framework of our “Leadership 2020” initiative. These game
changers are geared toward questioning and changing proce-
dures and structures that range from decision-making processes
and organizational structures to work methods and tools. The
“Leadership 2020” initiative will continue over the next few
years as “Leadership 20X.”
We have also launched a human resources development and
performance process for managers and executives known as
“IMPULSE,” in which managers work with their teams to define
the contribution they wish to make to the success of the com-
pany, and then monitor the effectiveness of the associated
measures. We have established the NAVI process for non-pro-
duction employees at Daimler AG, Mercedes-Benz AG, and
Daimler Truck AG. NAVI is a standardized leadership process
consisting of initial leadership discussions, reviews conducted
during the year, and final discussions.
E | NON-FINANCIAL REPORT | EMPLOYEE ISSUES 205
A competitive workforce
We can only be successful if we have a skilled and high-per-
forming workforce. It is therefore crucial that we continuously
promote the development of our employees in order to remain
competitive.
Employee development and securing young talent
The goals of our professional training, continuing education, and
qualification programs are to offer our employees opportuni-
ties for lifelong learning and continuous further development,
safeguard the competitiveness of our company, and ensure
that we can recruit and secure young talent. Further aims include
establishing an agile management culture and organization
that is supported by digital systems and ensuring that we keep
pace with the technological transformation of mobility. For
this reason, we offer various programs on a regular basis that
enable our employees to improve their qualifications, become
familiar with changed requirements, and acquire and develop new
skills. Among other things, the approach we employ here
makes use of digital learning formats and qualification measures
that are implemented directly in the workplace. In 2019, we
defined strategic areas of action for professional education.
These areas include the transformation of mobility, agility in
professional education, digital education projects, and interna-
tionalization. The areas apply equally to Daimler AG,
Mercedes-Benz AG, and Daimler Truck AG.
The “company-wide agreement on qualification” regulates pro-
fessional training at Daimler AG, Mercedes-Benz AG, Daimler
Truck AG, and Daimler Brand & IP Management GmbH & Co.
KG. This agreement standardizes the qualification process and
makes it more efficient. Our employees should take part in pro-
fessional training and qualification for their professional and
personal development throughout their careers. Employees are
supported by our managers as they proceed along their career
paths. A key focus of our qualification measures in the report-
ing year involved topics relating to electric mobility, for example.
The Daimler Corporate Academy helps the Group develop a new
management culture and world of work. The central mission
of the Academy is to safeguard the further development of man-
agers throughout the Group and around the globe within the
framework of a leadership program. Around 150,000 partici-
pants worldwide have received personal and professional train-
ing in 2019 with the programs of the Corporate Academy. The
portfolio includes courses in business skills, as well as initia-
tives that address trends such as the digital transformation of
the Group, agile work methods, and future skills for experts.
The Corporate Academy also offers Daimler Academic Pro-
grams, which enable employees to pursue a course of study
while they continue to work.
Programs such as “Skilled Worker in Focus” and the team leader
development program ensure that employees in production
and production-related units also receive non-specialized gen-
eral training and education according to uniform standards.
In 2019, for example, 76 employees used the “Skilled Worker in
Focus” program. We also focus especially on the development
of talented young managers.
206 E | NON-FINANCIAL REPORT | EMPLOYEE ISSUES
The Global Training unit safeguards and increases the skills of
our employees at the Mercedes-Benz sales organization. In
2019, more than 700 Mercedes-Benz trainers in over 80 coun-
tries worldwide instructed approximately 203,000 partici-
pants. Employees complete 1.8 million training courses each
year.
INspire is the name given to a series of international talent
training programs that optimally prepare young professionals
for their careers. Each one of our talent training programs
offers cross-unit insights, training, and personal coaching.
In Germany, we recruit most of the young talent we need
through our industrial-technical and commercial apprentice-
ships and the programs at the Cooperative State University.
We developed the “Daimler Training System” for technical
apprenticeships in Germany. Daimler also offers dual work-
study programs for 13 internationally recognized bachelor
courses of study at 13 Group locations throughout Germany.
Our STEM education initiative, “Genius,” is designed to get
children and young people enthusiastic about technology and
technology topics. Genius also helps teachers make their
classes varied and future-oriented by offering them practice-
related instructional materials, digital education materials,
and interactive advanced training courses.
Diversity
At Daimler, we encourage equal opportunity and a culture of
appreciation and respect – a culture in which one’s ethnicity,
age, gender, individual physical capabilities or sexual identity
or orientation have no bearing whatsoever on one’s job or
career. Diversity and inclusion are firm components of our sus-
tainable business strategy, for which we have set ourselves
targets and defined areas of action.
As a supervisory board of a listed company subject to parity
codetermination, the Daimler AG Supervisory Board is legally
required to have a gender ratio of at least 30% women. The
Supervisory Board fulfills this requirement as a whole and also
in terms of the side of the Supervisory Board representing
the shareholders and the side representing the employees. In
line with a further legal requirement, the Supervisory Board
defined a target of 12.5% for the proportion of women on the
Board of Management, with a deadline of December 31, 2020.
This target has been clearly surpassed, as the proportion of
women on the Board of Management is currently 25%. The Board
of Management defined a target of 15% for the proportion of
women in the first and second management levels of Daimler
AG below the Board of Management, with a deadline of Decem-
ber 31, 2020. As of December 31, 2019, the proportion of
women at the first management level below the Board of Man-
agement was 12.5%; at the second level it was 23.8%. As a
result of the deconsolidation of the Cars & Vans and Trucks &
Buses divisions into Mercedes-Benz AG and Daimler Truck
AG as part of Project Future, the number of executives of
Daimler AG at the two management levels below the Board
of Management and thus the number for determining the pro-
portion of women at these levels decreased significantly on
December 31, 2019.
Beyond the current legal requirements, we have since 2006
been setting clear goals for increasing the proportion of
women in the various business units, and we check every
month or quarter to see how we are progressing. For example,
Daimler has defined its own target for the proportion of women
in executive management positions at the Group level over
a period of several years within the framework of its in-house
guidelines (Gender Diversity Aspirational Guidelines). This
target calls for a proportion of 20% by the end of 2020. The share
of women in such positions stood at 19.8% at the end of 2019.
Women currently account for 19.0% of the total workforce
worldwide.
The Board of Management holds regular discussions (on a
quarterly basis over the past few years) of the Group’s diversity
management targets, activities, and results. The Diversity
Update contains gender reporting information and if required
information on any Group-wide projects. Our entire workforce
knows that we expect all employees to treat one another with
respect and appreciation. Managers serve as role models here
and thus have a special responsibility for ensuring a corporate
culture marked by fairness.
The Integrity and Diversity units at Daimler design the frame-
work and processes for such a culture. The Global Diversity
Office is a corporate function that is part of the Group Human
Resources organization. This office defines strategic targets
and areas of action in cooperation with the business units and
initiates group-wide projects, training programs, and aware-
ness promoting measures.
We offer various training and qualification measures for manag-
ers that are designed to make diversity and inclusion firm
elements of their day-to-day management work. Consequently
this topic area is a component of existing training courses
for managers and staff in human resources units. Among other
things, these courses teach participants how to address ste-
reotypes and prejudices.
In 2019, we held the seventh Daimler Diversity Day in coopera-
tion with the Diversity Charter initiative, of which we are a
founding member. The motto of the event was “Changing Per-
spectives. Ready to Be Different.”
Daimler has 12 official Employee Resource Groups that enable
employees with shared interests, experiences, and values to
discuss various issues across all business units and hierarchi-
cal levels.
Training for young people with disabilities is particularly impor-
tant to Daimler. As early as 2006, we began cooperating with
the severely disabled persons’ representative to put together
a plan of action for taking on severely disabled trainees. In pre-
vious years Daimler AG already surpassed the legally pre-
scribed share of 5%. Almost 9,000 employees with disabilities
work at Daimler AG, Mercedes-Benz AG, and Daimler Truck
AG. Daimler was presented with the German “Inclusion Award
for the Economy 2019” in April 2019. The award jury honored
the sustainable anchoring of disability inclusion in the company.
Daimler employs people from more than 160 nations, and we
utilize this diversity to put together optimal teams.
Our generation management focuses on measures for main-
taining the performance and health of younger and older
employees as well as for promoting cooperation between peo-
ple of different ages. Our Senior Experts program offers expe-
rienced retired employees the opportunity to come back to
work and contribute their expertise to various projects for a
E | NON-FINANCIAL REPORT | EMPLOYEE ISSUES 207
Various locations have their occupational safety and health
management systems certified independently by external cer-
tification agencies in accordance with the ISO 45001 (formerly
OHSAS 18001) standard in addition to the safety due diligence
audits. In 2019, approximately 100,000 employees were work-
ing at production locations with a certified management sys-
tem. That corresponds to around 40% of our global workforce.
Daimler AG, Mercedes-Benz AG, and Daimler Truck AG utilize a
cross-site accident documentation system in conjunction with
a standardized statistics system. All sites issue reports on
recent accidents and regularly disclose accident figures for
their facilities. In addition, Corporate Safety annually defines
targeted upper limits for accidents at our various sites and
units. This approach is supplemented by annual agreements on
goals with the respective body responsible for personnel.
These agreements also include the implementation of measures
relating to occupational health and safety. A monthly report
is also produced for each business unit. Group-wide accident
figures are reported to the Human Resources & Labor Rela-
tions Director every three months. E.03
Our employees are provided with comprehensive occupational
health advice and can also take advantage of various measures
and services offered by our company health-promotion pro-
gram and counseling service. For many years now our health
management system has focused on forward-looking solutions
that range from the job-related “Daimler GesundheitsCheck”
and the ergonomic design of workstations to an IT system that
makes it easier to permanently reintegrate employees suffer-
ing from limitations imposed by their health.
E.03
Accident figures1
Incidence of accidents
Number of accidents (worldwide)
2,957
3,152
2019
2018
Incidence of accidents
(worldwide, number of work-related acci-
dents that resulted in at least one lost day
per 1 million hours of attendance)
Accident downtime
(worldwide, number of lost days per 1 million
hours of attendance)
Number of deaths as a result of work-
related accidents
Number of employee deaths as a result of
work-related accidents2
Number of deaths of third-party employees
as a result of work-related accidents
Rate
6.8
7.7
107
113
2
1
1
1
1
0
1 Reporting rate of Daimler production locations worldwide: > 99%.
2 Tragically, a Daimler employee and a third-party employee suffered
fatal work-related accidents in Germany in 2019.
maximum of six months. More than 800 assignments of senior
experts have taken place since this program was launched in
2013.
The principle of equality between men and women has been
set out in binding form at Daimler AG, Mercedes-Benz AG,
Daimler Truck AG, and Daimler Brand & IP Management GmbH
& Co. KG in company-wide agreements on “The Advancement
of Women” and “Equal Opportunity.” Daimler also complies
around the globe with relevant international agreements and
principles of social responsibility.
Our principles regarding diversity and equal opportunity are
described in our Integrity Code and our Group-wide “Fairness
in the Workplace” agreement. Employees who have been
victims of discrimination, bullying or sexual harassment, or who
observe improper behavior by colleagues, can report such
violations of policy to their supervisors, the HR department, our
counseling service, their local medical services organization
or the Works Council. They can also contact our whistleblower
system BPO (Business Practices Office). In this way, all staff
members around the world, as well as external whistleblowers,
can report violations that pose a high risk to the company and
its employees. E pages 213 ff, Integrity and Compliance
Occupational health and safety
Our overarching goal is to maintain Daimler employees’ health
and physical well-being over the long term. We employ a pre-
ventive approach for maintaining workplace safety and the
health of our employees. This approach is designed to help
prevent work accidents, work-related illnesses, and occupa-
tional diseases to the greatest extent possible.
Every organizational unit within the Daimler Group defines and
pursues occupational safety objectives on a regular basis. We
utilize a top-down approach for defining our objectives and
programs. Here, the general overarching strategy is developed
by the Chief Group Physician and the Chief Safety Engineer
and then discussed with the Board of Management. This gen-
eral strategy, which is binding for all organizational units at
Group companies, is based on our occupational health and
safety guidelines and occupational safety strategy, as well as
the results of audits and reviews.
We monitor the implementation of the corporate policy on
occupational health and safety internally by means of safety
due diligence audits. These audits address areas such as
safety and accident management, risks arising from dangerous
activities, fire and explosion risks, risks posed by ambient con-
ditions, and risks associated with equipment and machinery.
Our Health & Safety staff notify the responsible unit managers
about any risks that have been identified in the audits, and
then make specific recommendations for eliminating them. By
the end of the reporting period, 20% of all production locations
in which we have majority holdings had been audited in this
manner. We are looking to increase this figure to 100% by
2023.
208 E | NON-FINANCIAL REPORT | SOCIAL ISSUES
Social Issues
As a global automotive company, we operate in an environment that is subject to a variety of soci-
etal, social, and political influencing factors. In order to ensure that we can continue to operate
effectively in the future, we need to make our company’s interests understandable to governments
and society, and must also address the concerns of groups within society. We therefore regularly
share information with our stakeholders and communicate our interests in an open and fair dialog
with governments and political representatives.
Incorporation of stakeholders
We consider it important to engage in a continuous dialog
with all of our interest groups so that we can bring together
various perspectives on our involvement with sustainability
issues, identify and address future trends early on, and share
experiences. We also want to engage in constructive discus-
sions of controversial themes at a very early stage. We always
focus on conducting a dialog that is fruitful and productive
for both sides.
In order to conduct this kind of dialog, we need to identify
our stakeholders. We define stakeholders as individuals and
organizations that have legal, financial, ethical or ecological
expectations regarding Daimler. One of the criteria for identify-
ing and weighting stakeholders is the extent to which a person
or group is affected by our company’s decisions or, conversely,
can influence such decisions. Our primary stakeholders are
our shareholders, employees, customers, and suppliers. How-
ever, we also communicate regularly with civil groups such
as NGOs, as well as associations, trade unions, the media, ana-
lysts, municipalities, residents in the communities where we
operate, and representatives of science and government.
We utilize various instruments to identify and select relevant
stakeholders. These instruments comprise, on the one hand,
proactive methods for initiating a dialog with stakeholders.
Examples here include the Daimler Sustainability Dialogue,
stakeholder surveys, the Advisory Board for Integrity and Cor-
porate Responsibility, specialist conferences, and thematic
dialog sessions that can also take the form of workshops. On
the other hand, we employ a monitoring approach that helps
us identify specific developments and the associated expecta-
tions beyond the dialog events that we have initiated. Exam-
ples of this approach include participation in industry-specific
and cross-industry networks and initiatives, consulting studies
and publications, and media analysis.
Dialog at the Group level
In order to implement the dialog with our stakeholders through-
out the Group, we have defined clear areas of responsibility,
communication channels, and specific dialog formats. The pro-
active dialog with our stakeholders is initiated by experts
from the Integrity and Legal Affairs division and coordinated by
our corporate sustainability bodies.
One essential tool of the dialog with our stakeholders is the
Daimler Sustainability Dialogue, which has been held annually
in Stuttgart since 2008 and brings various stakeholder groups
together with members of our Board of Management and exec-
utive management. The participants attend a range of work-
shops, where they discuss issues related to sustainability
and work together to further develop them. The Daimler repre-
sentatives responsible for specific themes take up the
impulses addressed in the discussions and work together with
the stakeholders to incorporate these ideas into their work
throughout the year. They then report at the event in the fol-
lowing year on the progress made in the interim. We held
our 12th Daimler Sustainability Dialogue in Stuttgart during the
year under review. The evening before the event was devoted
to the topic of sustainable mobility in cities. On the main day
of the event, more than 100 stakeholders split up into seven
working groups to discuss themes such as human rights, envi-
ronmental protection, autonomous driving, and artificial intelli-
gence with Daimler representatives.
As a global company, we have set ourselves the goal of imple-
menting sustainability standards at our business units and spe-
cialist units around the world. For this reason, we organize
Daimler Sustainability Dialogue events in other countries and
regions as well. Such dialog events have been held in China,
Japan, the United States, and Argentina. During the year under
review, more than 300 stakeholders attended the seventh
Daimler Sustainability Dialogue in Beijing, where they dis-
cussed topics such as battery recycling, smart cities, and arti-
ficial intelligence. w daimler.com/sustainability/
daimler-sustainability-dialogue-2019.html
The Advisory Board for Integrity and Corporate Responsibility
has been an important source of input for sustainability activi-
ties at Daimler since 2012. The board’s members – external
experts from the fields of science and business, as well as from
civic organizations – utilize an external point of view to offer us
critically constructive and independent support for the integ-
rity and corporate responsibility process at Daimler. The board
meets at regular intervals and also holds discussions with
members of the Board of Management and responsible per-
sonnel from the respective specialist units. During the year
under review, the Advisory Board also held a joint meeting with
the Supervisory Board. The Advisory Board’s members have
extensive experience and possess a variety of specialized
knowledge regarding environmental and social policy, various
human rights and ethical issues, and the development of trans-
port, traffic, and mobility. During the year under review, the
Advisory Board focused in particular on the further develop-
ment of our sustainable business strategy. w daimler.com/
sustainability/basics/integrity/the-advisory-board-for-integrity.
html
We also maintain regular contact with representatives from
civic organizations and other companies. In addition to the dia-
logs we initiate, we also participate in various associations,
E | NON-FINANCIAL REPORT | SOCIAL ISSUES 209
committees, and sustainability initiatives. Some of the most
important initiatives here are the UN Global Compact, econ-
sense – a German business forum for sustainable development,
and the World Business Council for Sustainable Development.
We also utilize online and print media, discussions with experts,
workshops, and local and regional dialog events for our dialog
with stakeholders. In addition to the formally structured dialog,
we receive inquiries from stakeholders concerning various
sustainability-related topics. These inquiries are addressed
directly by specific specialist units and business units in a
decentralized manner. This approach brings our stakeholders
closer to our business operations and enables specialized
knowledge to be directly incorporated into the dialog. Individ-
ual inquiries from stakeholders are also reported on in the
meetings of our sustainability bodies and committees and are
thus taken into consideration in the strategic decisions made
by our sustainability management organization. Our sustainabil-
ity bodies also coordinate dialog with our stakeholders on
interdisciplinary issues. The topics addressed most extensively
in discussions during the year under review included climate
protection, respect for human rights, livable cities, data
responsibility, and artificial intelligence.
Dialog at the local and regional levels
We also engage in a dialog with the stakeholders at our loca-
tions. In connection with specific occasions and projects, we
address questions, concerns, criticism, and suggestions made
by stakeholders and conduct an open-ended dialog with them.
We also stage proactive dialog and information events on cur-
rent topics. The results of all of our dialog measures are incor-
porated into decision-making and decision-implementation
processes at the company. An example of such a result is the
Urban Mobility Platform (PUM), which is an initiative launched
by nine automotive industry companies and nine German cit-
ies. The platform was created in order to establish a continu-
ous process of dialog and cooperation between cities and the
automotive industry regarding the design of future mobility
systems for urban areas. Daimler is a founding member of the
initiative and also actively participates in its pilot projects.
w plattform-urbane-mobilitaet.de
Political dialog and representation of interests
As a company with global operations, we have to deal with a
wide range of political and societal changes and decisions that
have a major impact on our daily business activities. It is there-
fore important for Daimler that we represent the interests of
our company in an open and trusting dialog and develop joint
solutions. The overarching goal of our approach to represent-
ing our interests is to harmonize the company’s interests with
the interests of society at large as far as possible. On the one
hand, we bring our ideas into social and political change and
decision-making processes and, on the other hand, integrate
social and political expectations into strategic and operational
corporate decisions.
Political representation of interests means being in constant
dialogue with decision-makers. These decision-makers include
politicians, government officials, and representatives of politi-
cal interest groups, trade organizations, business associations,
and public officials. We conduct discussions with such individ-
uals at various levels, listen to what they have to say, commu-
nicate our interests and concerns to them, and in this manner
assume social responsibility. Our dialog with NGOs and various
social movements is one of our core tasks and is becoming
more and more important.
Our strategy for representing our political interests is system-
atically aligned with our corporate strategy. We focus here on
issues such as climate protection and air quality, livable cities,
vehicle safety, handling data responsibly, human rights, trade
policy, location-specific matters, and labor legislation. In this
context, we hold regular discussions and events in a variety of
formats that allow us to systematically approach decision-mak-
ers and other societal protagonists and exchange ideas not
only on core topics in the automotive industry but also on the
issues that will shape its future. In the process we are open to
constructive dialog with all relevant stakeholders, and we take
other points of view into account in our activities. In addition,
we contribute our knowledge and commitment to many discus-
sions. For example, we participate in the strategic dialog for
the automotive industry in Baden-Württemberg, as well as in
the German government’s National Platform Future of Mobility
E.04
Examples of instruments of stakeholder dialog
Information
Dialog
Participation
- Daimler Sustainability Report as well as
regional reports (such as the Daimler China
Sustainability Report)
- Environmental declarations by the plants
- Press and public-relations work
- Corporate website
- Blogs and social media
- Social Intranet and internal communication
- Plant tours, receptions,
Mercedes-Benz Museum
– Annual “Daimler Sustainability
Dialogue”(Germany/regions)
- Local dialog with residents and
municipalities
- Stakeholder consultation in topic-related
workgroups
- Advisory Board for Integrity and Corporate
Responsibility
- Internal dialog sessions on integrity and
- Peer review within the framework of sustain-
ability initiatives such as the UN Global
Compact
compliance
- Daimler Supplier Portal
- Membership of sustainability initiatives and
networks
- Collaboration in the BDI workgroup on artifi-
cial intelligence
- Specialist conferences on societal topics
and debates
- Topic and project-related discussions
- New dialog formats on future questions:
think tanks, hackathons, ideation challenge
The Head of External Affairs and Public Policy is also a perma-
nent member of the Group Sustainability Board and as such is
actively involved in many sustainability-related issues
E page 198. In addition, the External Affairs and Public Policy
department works closely with the specialist units on ques-
tions relating to the representation of the Group’s interests.
External Affairs also regularly holds Governmental Affairs Com-
mittees, at which the Head of External Affairs and other offi-
cials from the unit meet with Board of Management members
and Level 1 managers to coordinate important upcoming lobby-
ing decisions. In accordance with our policies, employees at
Group companies of the Daimler Group and Daimler AG who
represent our interests must register with External Affairs.
In addition to direct dialog with political decision-makers, we
are represented via major industrial associations, such as the
German Association of the Automotive Industry (VDA). In these
ways we participate in many political debates concerning air
pollution control in German cities and the promotion of sus-
tainable mobility, for example. We are actively participating in
the development of solutions by means of our know-how and
our technology. We also maintain contact with representatives
from civic organizations and other companies, and we partici-
pate in further associations, committees, and sustainability ini-
tiatives.
210 E | NON-FINANCIAL REPORT | SOCIAL ISSUES
and many other forums. Here we work with government offi-
cials, politically and socially committed groups, opinion lead-
ers, and experts in order to promote the transformation of the
automotive industry.
Daimler has defined principles for political dialog and commu-
nicating our interests. In doing so, we maintain political
restraint and balance and do not allow ourselves to be instru-
mentalised in party politics. With various instruments, we
ensure that our political interests are in line with applicable
regulations and ethical standards. In the association’s work
and cooperation with other companies, special attention is
paid to the antitrust requirements. Our internally binding
requirements are, among other things, laid down in a world-
wide policy and in the Group’s Integrity Code.
Our policy on “Lobbying and Political Donations” governs grants,
donations to political parties, and the use of other instruments
for representing our interests in the political realm. The Board
of Management of Daimler AG decided not to make donations
to political parties in 2019. This decision was not based on cur-
rent political or economic developments.
As a company that does business worldwide, we encounter
various political and societal changes and decisions that have
a decisive impact on our own business operations. That is why
it is important for Daimler to represent our company’s inter-
ests in an open and trust-based dialog and to cooperatively
work out solutions.
We seek to ensure that our political lobbying is carried out in
accordance with applicable regulations and ethical standards.
For this reason, Daimler is listed in the transparency register of
the European Union and also complies with the register’s Code
of Conduct. The internal policies mentioned above describe how
we address risks in connection with the political representa-
tion of our interests. These risks are also addressed through
firmly established Group-wide compliance processes. Informa-
tion about misconduct relating to our lobbying activities can
be addressed to the BPO (Business Practices Office) whistle-
blower system. E pages 213 f
Our central coordinating body for political dialog at the national
and international levels is the External Affairs and Public Policy
unit, which is located in Stuttgart and falls under the responsi-
bility of the Chairman of the Board of Management. This unit
operates a global network with offices in Berlin, Brussels, Beijing,
Singapore, Madrid, Stuttgart, and Washington and also has
corporate representations in other key markets. Our objective
is to ensure that our interests are represented by addressing
political target groups in an organized manner using content
which has been coordinated across the group.
E | NON-FINANCIAL REPORT | INTEGRITY AND COMPLIANCE 211
Integrity and Compliance
Shared values provide orientation in times of technological transformation and societal change.
These values help us make the right decisions and act as a responsible member of society. Integrity
is as much a part of everyday business conduct at Daimler as compliance and legal responsibility.
Integrity management
Our stakeholders, for example our shareholders or other societal
stakeholders such as various associations, government bodies,
our customers, and non-governmental organizations (NGOs),
rightly expect us to act in an ethical manner and comply with
all applicable laws and regulations. Such ethical conduct is
also in our own interest.
We are firmly convinced that we can only be successful over the
long term if we fulfill not only our financial responsibility but
also our responsibility to society and the environment – on both
the local and global levels. For us, this involves more than
just obeying laws, as we also seek to align our activities with
shared principles and values. The concept of integrity plays
a key role here. Integrity is one of the four corporate values that
form the foundation of our business activities and shape the
way we view ourselves.
For Daimler, integrity means doing the right thing by acting on
our values. More specifically, our aspiration is to always
comply with internal and external regulations, act in accordance
with our corporate values, and listen to our inner compass.
This is especially important in situations for which there are no
clear rules, or in which the rules that do exist can be inter-
preted in different ways.
Integrity also plays an important role in the development of new
products and services. That’s why our focus on integrity begins
with product-creation and decision-making processes. This
approach helps to reduce legal risks and protect the company’s
reputation.
How we make integrity part of our daily business activities
Our Integrity Code defines guidelines for our everyday business
conduct, offers our employees orientation, and helps them
make the right decisions even in difficult business situations.
In doing so, we act in accordance with our corporate princi-
ples, which involves more than just complying with laws and
regulations. We also take responsibility for our actions and
seek to strike a balance between profitability and the needs of
people and the environment. Openness and transparency form
the foundation of our conduct, and our collaboration is based
on trust and respect. We view the diversity of our workforce as
one of our strengths.
Employees from different departments and units throughout
the Group helped us create this policy. The rules contained in
the Code are binding for all employees at Daimler AG and the
Group companies, and we expect all of our employees and
business partners to adhere to the underlying principles out of
a sense of conviction. The Integrity Code has been published in
ten different languages. A separate website for the Integrity
Code has been set up on the Group’s intranet. This site offers a
clear overview of all sections of the Code, as well as detailed
information on specific issues and information on contact per-
sons and points of contact for discussing integrity-related
issues.
Our Integrity Code also defines requirements for our manag-
ers: We expect our executives at all levels to serve as role
models in terms of ethical behavior and thus offer employees
guidance in this regard.
The task of Integrity Management is to promote and further
develop the culture of integrity at the Daimler Group. The unit’s
goal is to establish and maintain a common understanding of
integrity in order to reduce risks and help ensure Daimler’s
sustained success. The unit’s experts for change management,
corporate responsibility management, training, and consulting
develop innovative and employee-focused approaches and for-
mats that are designed to strengthen the culture of integrity.
The Head of Integrity Management reports directly on a regular
basis to the member of the Board of Management responsible
for Integrity and Legal Affairs. The Head of Integrity Manage-
ment also participates in all executive-management meetings.
Because of their strategic significance, we have combined the
responsibilities for integrity, compliance, and legal affairs
within a single executive division. This division supports all cor-
porate units in their efforts to ensure that these issues remain
an integral component of daily business conduct over the long
term.
Contacts for integrity-related questions and issues
Our “Infopoint Integrity” is the central contact and advice center
for all employees and managers who need advice on integrity-
related questions and issues. The Infopoint either offers direct
assistance by obtaining the relevant information from the
specialists responsible, or else ensures that inquiries are for-
warded to the appropriate contact partner. In line with this
approach, the Infopoint works together with experts for legal
and HR issues, data protection, compliance, diversity, and
sustainability as well as other specialist units. A worldwide net-
work of local compliance and legal contact persons is also
available to our employees.
212 E | NON-FINANCIAL REPORT | INTEGRITY AND COMPLIANCE
Measures for promoting ethical conduct
Whether it’s dialog sessions, training courses, consulting or
employee surveys – we employ numerous measures to initiate
discussions on the topic of integrity and promote ethical and
responsible behavior. In this way we provide employees at all
levels of the hierarchy with crucial support in their daily activi-
ties and decision-making.
Input from employees
Our “Big Picture Integrity” survey is an important element for
strengthening and further developing our culture of integrity.
This global employee survey on integrity and compliance was
conducted throughout the Group in the fall of 2019. The survey
results form the basis for strengthening our corporate culture
in this regard, as they reveal areas of action and help us formu-
late appropriate measures for addressing the associated
issues. The results are also used to help define the non-finan-
cial goals relating to “Integrity” and “Diversity” for the manage-
ment remuneration system. E pages 112 f
A network of integrity contact persons enables our business
divisions to validate, prioritize, and implement integrity-related
measures in their organizations. Integrity Management sup-
ports such efforts by making contact persons for relevant issues
available and offering an Integrity Tool Kit on the intranet that
can be used by all interested employees. This Tool Kit contains
information, formats for reflection, case studies, and other
tools that can be used by individuals or groups to address the
topic of integrity. A major focus of our work in 2019 involved
dialog sessions that are designed to establish a better under-
standing of integrity at our various business divisions and
the “Speak Up” initiative. We see “Speak Up” as promoting a
culture in which all topics can be addressed in an open man-
ner. In addition, we are providing more support to our business
divisions with regard to the responsible handling of personal
data in connection with the challenges associated with data-
based business models. Here we offer assistance to all
employees via the company intranet.
Communication at all levels
We conduct an ongoing open dialog with our employees in order
to ensure that integrity will remain embedded in the company’s
daily business over the long term. We regularly address integ-
rity issues in our internal media and make a wide range of
materials available to our corporate units – for example bro-
chures, films, and an app that provides information on integrity,
compliance, and legal affairs. We also place great value on
face-to-face discussions. For this reason, we regularly conduct
individually designed dialog events with employees at all levels
of the hierarchy, as well as with external stakeholders. These
events are held both in Germany and at our locations abroad.
In the course of these events we provide food for thought,
consider integrity from a range of different perspectives, and
increase the participants’ awareness of the importance of
making ethical decisions. For example, we present case stud-
ies that enable employees to experience and discuss the
relevance of integrity to daily business operations from various
viewpoints, and then put what they learn into practice.
Training for employees and managers
Our measures for further developing our integrity management
system also include a broad range of training programs that
are continuously expanded and updated. All employees and
managers participate in a web-based integrity training program
at regular intervals. In order to offer participants optimal sup-
port, the training program also contains a management module
that is compulsory for all management staff. It explains in
detail the role of executives and managers with regard to integ-
rity, compliance, and applicable law. Furthermore, selected
seminars designed to enhance the qualifications and skills of
our management staff also include modules that focus on
integrity. E page 214
Our Compliance Management System
Value-based compliance is an indispensable part of our daily
business activities at Daimler. For us, compliance means act-
ing in accordance with laws and regulations. Our objective
here is to ensure that all of our employees worldwide are always
able to carry out their work in a manner that is in compliance
with applicable laws, regulations, agreements with workers’
representative bodies, voluntary commitments, and our values,
as set out in binding form in our Integrity Code.
Our compliance activities focus on complying with anti-corrup-
tion regulations, the maintenance and promotion of fair com-
petition, the compliance of our products with technical and reg-
ulatory stipulations, respect for and the protection of human
rights, adherence to data protection laws, compliance with
sanctions, and the prevention of money laundering.
Our Compliance Management System (CMS) consists of basic
principles and measures for the promotion of compliant
behavior throughout the Group. The CMS is based on national
and international standards and is applied on a global scale
at Daimler AG and all Group companies. The CMS consists of
seven elements that build on one another.
Compliance values and objectives
The objective of our CMS is, on the foundation of our culture of
integrity, to promote compliance with applicable laws and
policies within the company and on the part of its employees
and to prevent inappropriate behavior. The measures needed
for this are defined by our compliance and legal organizations
in a process that also takes the company’s business require-
ments into account in an appropriate manner.
Further information on integrity at Daimler: E page 211
E.05
The Daimler Compliance Management System
I. Compliance values
VII. Monitoring
& improvement
II. Compliance goals
VI. Communication
& training
III. Compliance
organization
V. Compliance
program
IV. Compliance
risks
Compliance organization
Our compliance and legal organizations have set themselves
the goal of ensuring Group-wide conformance with laws and
regulations. Our compliance organization is structured in a
divisional and regional manner, while our legal organizations
are structured divisionally, regionally, and along the value
chain. These structures enable us to provide optimal support
and advice to our divisions.
A contact person is made available to each function, division,
and region. In addition, a global network of local contact per-
sons makes sure that our standards are met throughout the
Group and also helps local management at Group companies
implement our compliance program.
Involvement of company management
Our divisional and regional compliance managers report to
the Chief Compliance Officer. This guarantees the compliance
managers’ independence from the business divisions. The
Chief Compliance Officer, the Vice President & Group General
Counsel, and the Vice President Legal Product & Technical
Compliance report directly to the Member of the Board of
Management for Integrity and Legal Affairs and to the Audit
Committee of the Supervisory Board.
They also report regularly to the Board of Management of
Daimler AG on matters such as the status of the Compliance
Management System and its further development, the status
of the whistleblower system and, if necessary, on other topics.
In addition, the Vice President & Group General Counsel
regularly reports to the Antitrust Steering Committee and the
Group Risk Management Committee, to which the Chief Com-
pliance Officer and the Vice President Legal Product & Techni-
cal Compliance also report.
Compliance risks
We systematically pursue the goal of minimizing compliance
risks, and we analyze and assess the compliance risks of our
Group companies every year. These analyses are based on
centrally compiled information on the Group companies and
take specific additional details into account as needed. The
results of the analyses form the basis of our risk control.
E | NON-FINANCIAL REPORT | INTEGRITY AND COMPLIANCE 213
Compliance program
Our compliance program comprises principles and measures
designed to reduce compliance risks and prevent violations of
regulations and laws. The individual measures, which are
based on the knowledge gained through our systematic com-
pliance risk analyses, focus on the following aspects:
The whistleblower system BPO
The whistleblower system BPO (Business Practices Office)
enables Daimler employees and external whistleblowers to
report misconduct anywhere in the world. The BPO is available
around the clock to receive information that is sent by e-mail
or normal mail or by filling out a special form. An external toll-
free hotline is also available in Brazil, the United States, Japan,
and South Africa. Reports can be submitted anonymously if
local laws permit this. In Germany, whistleblower reports can
also be submitted to an external neutral intermediary in addi-
tion to the BPO.
The information provided to the BPO whistleblower system
enables us to learn about potential risks and specific violations
that pose a high risk to the company and its employees, and
this in turn allows us to prevent damage to the company and
its reputation. High-risk rule violations include, for example,
offenses relating to corruption, breaches of antitrust law, and
violations of Anti-Money Laundering regulations, as well as
serious violations of binding technical provisions. Employees
who wish to report violations that pose minor risks can approach
their supervisor, their Human Resources department, the Group
Security Office or their local employee representation.
A globally valid corporate policy defines BPO procedures and
the responsibilities of the various departments and individuals
in the organization. This policy aims to ensure a fair and trans-
parent approach that takes into account the principle of pro-
portionality for the affected parties, while also giving protec-
tion to whistleblowers. It also defines a standard for evaluating
incidents of misconduct and making decisions about their con-
sequences.
In an effort to increase trust in our whistleblower system and
make it even better known within the Group, we have estab-
lished a continuous communication process that includes the
periodic provision of information to employees about the type
and number of reported violations. We also supply information
materials such as country-specific information cards. In addi-
tion, we have produced an instructional video and stage dialog
events at selected locations as well.
In 2019, 59 new BPO cases were opened. A total of 44 cases
in which 72 individuals were involved were closed “with merit.”
In these cases, the initial suspicion was confirmed. Seven of
these cases were in the category “Corruption”, while five
related to “Technical compliance” and five concerned “Reputa-
tional damage.” Accusations of inappropriate behavior of
employees toward third parties were confirmed in 13 cases.
Four cases were categorized as “Damage exceeding 100,000
euros.” The remaining cases fell into other categories. With
regard to those cases that are closed “with merit,” appropriate
214 E | NON-FINANCIAL REPORT | INTEGRITY AND COMPLIANCE
response measures are decided in line with the principles of
proportionality and fairness. Personnel measures taken in the
reporting year 2019 included the issuing of warnings and final
warnings, as well as separation agreements and terminations.
Compliance on the part of our business partners
We also require our business partners to adhere to clear com-
pliance requirements because we regard our business part-
ners’ integrity and behavior in conformity with regulations as a
precondition for trusting cooperation. In the selection of our
direct business partners, we therefore ensure that they comply
with the law and observe ethical principles. In financial year
2019, we made full use of our globally standardized process for
the effective and efficient examination of all new and existing
business partners (Business Partner Due Diligence Process).
Our continuous monitoring here is designed to ensure that we
can identify possible integrity violations by our business
partners. We also reserve the right to terminate cooperation
with, or terminate the selection process for, any business part-
ner who fails to comply with our standards. In addition, we
work with our procurement units to continuously improve our
processes for selecting and cooperating with suppliers.
Our global Daimler Supplier Sustainability Standards apply in
this area. On the basis of these standards and our Integrity
Code, we make available to each of our suppliers and sales
partners a specific Compliance Awareness Module developed
with their activities in mind. This module also contains provi-
sions similar to those that can be found in the general Compli-
ance Awareness Module for sales partners, which was intro-
duced in 2016 and is designed to increase their awareness of
compliance requirements.
Further information on expectations regarding our business
partners: w daimler.com/sustainability/human-rights/
our-business-relationships.html
Communication and training
We offer extensive compliance training courses that are based
on our Integrity Code. We conduct a training needs analysis at
regular intervals, adjust and/or expand the training program,
and subsequently carry out an evaluation.
All employees at Group companies can also participate in a
web-based and target group-oriented training program con-
sisting of several modules – a basic module, a module specifi-
cally for managers, and expert modules on subjects such as
antitrust law, data protection, technical compliance, benefits in
kind for employees, and function-specific topics in areas such
as procurement and sales. Our training activities in 2019
focused on, among other things, web-based courses on techni-
cal compliance and antitrust law, expert seminars lasting for
several days on the topic of data compliance, webinar series
on preventing money laundering, and new web-based modules
for suppliers and business partners.
Office employees are required to complete those modules rele-
vant to their role and function. We assign the associated mod-
ules to them automatically or in a centralized process. These
training modules are assigned when an employee is hired, pro-
moted or transferred to a position that involves an increased
risk. This approach ensures that personnel changes are prop-
erly addressed. In general, the program must be repeated
approximately every three years. Factory employees can com-
plete the web-based training program voluntarily.
The web-based training courses are supplemented by class-
room training sessions that are conducted by central or local
trainers. We provide our internal trainer network with modular
training documents and materials for methodical implementa-
tion, such as a trainer guideline and explanatory videos that
can be used in a target group-specific manner and in accor-
dance with the risks associated with the participants’ jobs. In
2019 a total of approximately 117,600 employees from diverse
levels of the hierarchy participated in classroom-based and
web-based training programs.
We also offer our employees in the compliance and legal orga-
nizations courses that address legal changes and changes to
compliance regulations; these courses are taught by experts in
the respective fields. In addition, new employees at our integ-
rity, compliance, and legal organizations receive a comprehen-
sive introduction in the course of an onboarding program.
We also offer information and qualification measures to indi-
viduals who perform supervisory and management functions,
including new members of the Supervisory Board of Daimler
AG. Among other things, the onboarding program for new
Supervisory Board members provides information about the
antitrust compliance program and technical compliance man-
agement. In 2019, new members of the supervisory boards of
Group companies were also provided with information on vari-
ous issues relating to compliance, data protection, and integ-
rity. In addition, these new supervisory board members partici-
pated in a “Know Your Responsibilities” onboarding program to
make them more aware of compliance-related topics (for
example anti-corruption policies) and the aspects of integrity
at the Group companies.
New members of executive bodies of Group companies are
given a compact overview of key aspects of corporate gover-
nance via the Corporate Governance Navigator, which is a
module that provides information on their tasks and responsi-
bilities, contact partners, and points of contact that deal with
central issues addressed by the Integrity and Legal Affairs divi-
sion and adjacent units. The module thus supports such execu-
tives in their new role.
All of these training measures contribute to the permanent
establishment of ethical and compliant behavior at the com-
pany and also help our employees deal with specific issues
that can occur at work.
The same is true of the Daimler app for integrity, compliance,
and legal affairs. The app is available to all employees with a
company-owned device. Among other things, the app enables
mobile access to practical information on subjects such as
corruption prevention, antitrust law, technical integrity, and
data protection, with additional topics being added as
required.
Within the framework of our training program, we also offer our
business partners special modules on integrity and compliance
(including corruption prevention). These courses are offered as
web-based training or classroom training sessions. Daimler
informs its business partners about the courses and invites
them to participate.
Monitoring and improvements
Every year, we review the adequacy and effectiveness of our
Compliance Management System and adapt it to global devel-
opments, changed risks, and new legal requirements. We also
monitor important core processes during the year on the basis
of key performance indicators (KPIs) that include process dura-
tion and quality. To determine these indicators, we check,
among other things, whether formal requirements are met and
the content is complete. In addition, we analyze the knowledge
gained through independent internal and external assess-
ments.
We use these activities as a basis for defining any required
improvement measures, which are implemented by the respon-
sible Group companies and then monitored on a regular basis.
The relevant management bodies continuously receive reports
on these monitoring activities.
Main topics for compliance management
Eliminating corruption, preventing antitrust violations, ensuring
product compliance with technical regulations and regulatory
provisions, combating money laundering and the financing of
terrorism, ensuring compliance with sanctions, and observing
data protection legislation – we implemented our Compliance
Management System (CMS) in order to address exactly these
issues, which are extremely important to us. Our Group-wide
approach to respecting and upholding human rights is also
based on our CMS.
Anti-corruption compliance
Daimler has committed itself to fighting corruption in its busi-
ness activities. Along with complying with all applicable laws,
this also involves adhering to the rules of the OECD Convention
on Combating Bribery of Foreign Public Officials in Interna-
tional Business Transactions (1997) and the United Nations
Convention against Corruption (2003). As a founding member
of the UN Global Compact, Daimler also seeks to ensure that
not only the company itself but also its business partners act
in accordance with the principles of the UN Global Compact.
The most important goals here are to fight corruption around
the world in order to enable fair competition, eliminate the
damage corruption does to society, and thus improve condi-
tions for everyone.
Our anti-corruption compliance program is based on our com-
prehensive Compliance Management System. The program is
globally valid and particularly consists of an integrated risk
assessment process that takes into account internal informa-
tion such as a unit’s business model and external information
such as the Corruption Perceptions Index from Transparency
International. The results of our risk assessment analyses form
the basis of risk-based measures for avoiding corruption in all
business activities (e.g. reviews of business partners and
transactions) and measures to ensure that special care is
E | NON-FINANCIAL REPORT | INTEGRITY AND COMPLIANCE 215
taken in contacts with authorities and public officials. Our risk-
minimization measures focus in particular on sales companies
in high-risk countries and business relationships with whole-
salers and general agencies worldwide.
The responsibility for implementing and monitoring measures
lies with each Group company’s management, which cooper-
ates closely with the specialist units within the Integrity and
Legal Affairs division. Companies exposed to a high corruption
risk are supported by an independent Local Compliance Offi-
cer who assists the responsible management team with the
implementation of the anti-corruption compliance program.
Daimler places the same strict requirements on all of its activi-
ties around the world. In addition, we continuously improve our
methods and processes and use a variety of communication
and training measures to make our employees around the
world more aware of the importance of fighting corruption.
Further information on communication and training:
E page 214
In order to ensure an independent external assessment of our
Anti-Corruption Compliance Program, KPMG AG Wirtschafts-
prüfungsgesellschaft audited the Compliance Management
System for anti-corruption in accordance with the 980 stan-
dard of the Institute of Public Auditors in Germany. This audit,
which was based on the principles of appropriateness, imple-
mentation and effectiveness, was already successfully com-
pleted at the end of 2019.
Antitrust compliance
Our Group-wide Antitrust Compliance Program is oriented to
national and international standards for ensuring fair competi-
tion. The program establishes a binding, globally valid Daimler
standard that defines how matters of antitrust law are to be
assessed. The Daimler standard is based on the standards of
the underlying European regulations and takes into account
established legal practice at European antitrust authorities, as
well as the rulings of European courts. The objective of the
Daimler standard is a uniform level of compliance and advice
in all countries and thus compliance with all local and interna-
tional antitrust laws.
By means of an advisory hotline, guidelines, and practical sup-
port, we help our employees around the world recognize situa-
tions that might be critical from an antitrust perspective and
also to act in compliance with all regulations. This is particu-
larly important when employees deal with competitors, coop-
erate with dealers and general agencies, and participate in
trade association committees. In addition to Daimler’s Legal
department and its specialist advisers, the Group’s global divi-
sions can turn to local legal advisers, who also ensure that our
standards are consistently upheld.
The results of our annual compliance risk analysis serve as the
basis for the formulation of measures that address antitrust
risks. The responsibility for designing and implementing mea-
sures lies primarily with each Group company’s management,
which is also responsible for monitoring the effectiveness of
the measures employed. Within the framework of its Group
management responsibilities, Daimler AG monitors the execu-
tive management bodies of the respective Group companies.
As a result, the managers at Group companies cooperate
216 E | NON-FINANCIAL REPORT | INTEGRITY AND COMPLIANCE
closely with Integrity and Legal Affairs, which also provides
information on how to implement compliance measures effec-
tively. Units that face a higher potential risk in particular must
also systematically assess the adequacy and effectiveness of
locally implemented antitrust compliance measures at regular
intervals. In addition, our Legal and Corporate Audit depart-
ments conduct monitoring activities at our divisions, as well as
random audits, in order to determine whether antitrust laws
and internal standards are complied with. This helps us contin-
uously improve the effectiveness of our Antitrust Compliance
Program and adapt it to global developments and new legal
requirements. The associated methods and processes are
being constantly refined and improved.
We have also created dedicated expert units for technical com-
pliance in the development departments at our vehicle-related
divisions. Among other things, these units manage a network
of technical compliance contact persons at development and
certification departments. This network serves as a link
between operating units and the compliance organization and
also supports the development departments in matters of
technical compliance. Complex questions regarding technical
compliance are evaluated and then decided in an interdisciplin-
ary process that takes into account technical, legal, and certifi-
cation-relevant criteria. Our BPO whistleblower system is also
available as a contact partner for reporting technical compli-
ance violations.
We utilize a variety of training and communication measures to
make our employees aware of the importance of competition
and antitrust laws and issues. Such measures during the year
under review included both classroom courses and online
training courses; the latter are mandatory for staff above a cer-
tain hierarchical level. Training in 2019 focused on the topics of
“Contact with competitors in general” and “Antitrust coopera-
tions”. Training courses held abroad or at international Group
companies are independently organized and conducted by
local legal departments as required.
Further information on communication and training:
E page 214
In order to ensure an independent external assessment of our
Antitrust Compliance Program, KPMG AG Wirtschaftsprü-
fungsgesellschaft audited the Compliance Management Sys-
tem for antitrust law in accordance with the 980 standard of
the Institute of Public Auditors in Germany. This audit, which
was based on the principles of appropriateness, implementa-
tion and effectiveness, was already successfully completed at
the end of 2016 (antitrust) and at the end of 2019 (anti-corrup-
tion).
Technical compliance
For us, technical compliance means adhering to technical and
regulatory requirements, standards, and laws while taking into
account the fundamental spirit of these laws and regulations
as well as adhering to internal development requirements and
processes. In order to address the specific risks associated
with the product creation process, we combined the existing
systems and additional measures and processes at the Daimler
AG automotive divisions into a technical Compliance Manage-
ment System (tCMS). The purpose of the tCMS is to safeguard
legal and regulatory conformity during the entire product
development and certification process and to provide orienta-
tion and guidance for our employees by defining specific val-
ues, principles, structures, and processes.
The tCMS is managed Group-wide by an independent gover-
nance body whose director reports directly to the Board of
Management member for Integrity and Legal Affairs. This body
consists of employees with expertise in various fields, such as
development, legal affairs, integrity and compliance. In order
to provide optimal support to the divisions, the independent
governance body has a divisional structure. The governance
body’s tasks include the design of the technical Compliance
Management System and the provision of legal advice to the
divisions.
During the year under review, the Daimler AG Board of Man-
agement adopted the tCMS policy. It describes key tCMS ele-
ments and defines the roles and responsibilities of all relevant
functions. Process descriptions and rules of procedure for
tCMS committees in Group companies in scope of application
of the tCMS have been drawn up for relevant tCMS elements.
The tCMS policy applies to all Group companies worldwide that
conduct relevant development and certification activities.
We have made use of various communications measures such
as “Tone from the Top” mailings and special training courses
and dialog sessions in order to sensitize employees at develop-
ment and certification units at all divisions to issues relating to
technical integrity, compliance, and legal regulations in the
product creation process.
Further information on communication and training:
E page 214
The Technical Integrity initiative, as part of the tCMS, focuses
on strengthening awareness of the importance of responsible
behavior during the product creation process, particularly in
situations where legal provisions may be unclear. Together with
the relevant development departments, we have supplemented
the provisions of the Integrity Code by formulating so-called
commitment statements that support employees and offer them
guidance for ensuring proper conduct in their daily activities.
These principles have been discussed with employees at dialog
sessions held around the world. Various communications mea-
sures regarding the commitment statements have been made
known to all employees and were anchored in selected training
courses.
We also conduct in-depth discussions on safeguarding techni-
cal compliance with business partners and selected suppliers.
In October 2019, for example, we held a Supplier Dialog event
with relevant suppliers. This event was attended by executives,
technical compliance managers, and technical project manag-
ers from participating supplier companies. Among other things,
the objective here was to make suppliers more aware of the
regulatory framework, provide them with information on how
Daimler safeguards technical compliance, and explain to them
what we expect from our suppliers in this regard.
The effectiveness of our tCMS is monitored in the annual moni-
toring-process. Measures identified by this process will be
considered in the improvement of the tCMS and are addressed
for implementation.
E | NON-FINANCIAL REPORT | INTEGRITY AND COMPLIANCE 217
A key component of the Data CMS is the Data Compliance Risk
Assessment, which is a systematic process conducted by the
Data Compliance unit each year in order to identify, analyze,
and evaluate data compliance risks at Daimler. The assessment
is performed for both Group companies and corporate depart-
ments. The analyses are based on centrally compiled informa-
tion on all units at the Group; specific additional details are
taken into account in line with the given risk assessment. The
results of the analyses form the basis for managing and mini-
mizing risks in a targeted manner.
Employees are instructed to report all potential data protection
incidents internally via the Information Security Incident Man-
agement Process. Criminal violations of data protection rules
are addressed by the whistleblower system BPO (Business
Practices Office), which can also be used by external stakehold-
ers who wish to report violations of laws or internal regulations.
We document and evaluate the implementation of defined data
compliance measures within the framework of a monitoring
and reporting process. For example, our compliance organiza-
tion conducts an annual evaluation to assess the adequacy and
effectiveness of our Data CMS. We document in our compli-
ance reporting system any areas where action needs to be
taken, and we also monitor the implementation of the associ-
ated measures. If necessary, the compliance organization will
make adjustments to the Data Compliance Management Sys-
tem on the basis of the knowledge gained from the evaluation,
while also taking into account changes to the risk situation and
new legal requirements.
Data compliance
Connectivity and digitalization will have a major impact on
mobility in the future. The responsible handling and protection
of data that is created and stored by digital systems is a top
priority at Daimler.
The regulatory requirements relating to data protection have
become significantly more stringent in recent years, mainly as
a consequence of the implementation of the European Union’s
General Data Protection Regulation (GDPR). We are addressing
the increased requirements within the framework of our
Group-wide Data Compliance Management System (Data
CMS), which along with our data vision and our data culture is
a fundamental component of our overarching Data Governance
System. Our new Data Protection Policy EU and our Global
Data and Information Policy form the basis for the handling of
employee, customer, and business-partner data in a sustain-
able manner in accordance with all legal requirements.
The Data CMS, which combines all Group-wide measures, pro-
cesses, and systems for ensuring data protection compliance,
is based on the existing Daimler Compliance Management Sys-
tem (CMS). The Data CMS supports the systematic planning,
implementation, and monitoring of compliance with data pro-
tection requirements. Such measures include programs that
help ensure compliance with the GDPR and local data protec-
tion laws, as well as various communication and training mea-
sures and measures for product-related data protection activi-
ties. E page 214
In 2017, we created the Data Compliance unit to set up the
Data Compliance Management System. This unit defines the
individual elements of the Data CMS and manages its imple-
mentation throughout the Group. To this end, the Chief Compli-
ance Officer submits data compliance reports on a regular
basis to the Board of Management member of Daimler AG for
Integrity and Legal Affairs, and also provides information on
relevant developments in his quarterly reports to the Board of
Management.
At the same time, the Chief Officer Corporate Data Protection
performs the tasks required by law to ensure compliance with
data protection rules. Here the Chief Officer Corporate Data
Protection works with a team that monitors compliance with
applicable data protection laws and the Daimler Data Protec-
tion Policy. In addition, the Chief Officer Corporate Data Pro-
tection handles complaints regarding data protection and is
also responsible for issuing mandatory reports to supervisory
authorities and consulting privacy impact assessments. The
Chief Officer Corporate Data Protection is independent and
reports directly to the Board of Management member for Integ-
rity and Legal Affairs.
Since the end of 2018, we have been realigning the previous
network of local data protection coordinators and merging this
network into our global compliance network. This process will
be completed by the end of 2020. We specifically prepare
Local Compliance Officers and Local Compliance Responsibles
for their new tasks in the field of data compliance and support
them with training courses and consultation.
218 E | NON-FINANCIAL REPORT | INTEGRITY AND COMPLIANCE
Anti-financial crime compliance
Money laundering and the financing of terrorism pose consid-
erable sociopolitical risks. For this reason, the prevention of
money laundering and the implementation of anti-money laun-
dering measures have been defined as central compliance
goals in our Integrity Code. In its core business, the global pro-
duction and sale of vehicles, Daimler AG and its Group compa-
nies conduct their operations in accordance with the provi-
sions of the German Money Laundering Act (GwG), which apply
to “distributors of goods.” As a result, we are required to
implement Group-wide and thus worldwide measures to pre-
vent and combat money laundering and the financing of terror-
ism (Anti-Money Laundering – AML – and Counter Terrorist
Financing – CTF – policies).
The Chief Compliance Officer officially serves as the Group
Anti-Money Laundering Officer of Daimler AG in its role as a
distributor of goods. The Chief Compliance Officer reports
directly to the Board of Management and also serves as the
point of contact for regulatory authorities, law enforcement
agencies, authorities responsible for the prevention, investiga-
tion, and elimination of potential threats, and Germany’s Finan-
cial Intelligence Unit. In his capacity as the Anti-Money Laun-
dering Officer, the Chief Compliance Officer has sufficient
authority and means to perform his duties.
Daimler AG and its Group companies pursue an integrated
compliance approach in all areas of the Group and around the
world. This approach takes the form of a central Group unit,
“Anti-Financial Crime,” and ensures that checks against sanc-
tions lists are always carried out before Anti-Money Launder-
ing measures are implemented. This integrated approach links
prevention of the circumvention of supranational and national
sanctions with measures to prevent and combat money laun-
dering, the financing of terrorism, organized crime, and other
corporate crime. This is important, as these risks can not only
have a negative impact on society; they can also cause long-
term damage to our reputation, as well as financial damage
that can negatively affect our Group companies and our share-
holders and stakeholders.
The Anti-Financial Crime specialist unit assists the Anti-Money
Laundering Officer by acting as the Group organization for
ensuring that Daimler AG and Group companies comply with
the provisions of the GwG across all divisions in their role as
distributors of goods. The unit is also responsible for the
Group-wide Sanctions Compliance Program. As a central
Group organization, the specialist unit therefore also brings
together under one roof our two Centers of Competence for
Preventing and Combating Money Laundering and the Financ-
ing of Terrorism and the Center of Competence for Sanctions
Compliance.
The Daimler AG Sanctions Compliance Program, which is valid
for all Group companies, includes systematic reviews of com-
pliance with sanctions lists by all units, divisions, and compa-
nies worldwide. More specifically, such reviews check whether
the names of affected natural persons or legal entities can
be found on any sanctions list around the globe. We therefore
check both supranational sanctions lists such as those pub-
lished by the United Nations and the European Union and
national sanctions lists from various countries, in particular the
United States. As required by law, such reviews are conducted
for customers and business partners, for example in sales
and procurement, as well as for employees and strategic coop-
eration partners. Checks against sanctions lists, which are
performed in close cooperation with the Export Control
department, take data protection law provisions into account.
Measures to combat money laundering and the financing of
terrorists are defined for Daimler Mobility AG (DMO) and the
Group companies that belong to it by a separate framework
divisional guideline that also serves as a basis for the policies
at DMO companies. An independent network of local Anti-
Money Laundering (AML) Officers has also been established
for the individual Group companies allocated to DMO.
E | NON-FINANCIAL REPORT | INTEGRITY AND COMPLIANCE 219
Human rights compliance
Public interest in compliance with human rights in the automo-
tive industry is increasing. One important reason for this devel-
opment involves the new challenges associated with the
expansion of electric mobility. More specifically, there are con-
cerns that the raw materials needed to manufacture electric
vehicles might possibly be obtained under conditions that are
critical in terms of human rights. We at Daimler have noticed
an continuing interest in human rights on the part of investors,
which indicates to us that corporate activities related to human
rights are having an increasing influence on investment deci-
sions. Legislation relating to compliance with human rights is
also being expanded. It is conceivable that new laws governing
human rights due diligence obligations could be adopted in
Germany after the federal government’s National Action Plan
on Business and Human Rights comes to an end in 2020. At
the EU level, it is possible that legislative initiatives on human
rights could be introduced when Germany assumes the Presi-
dency of the European Council.
For Daimler, respect for human rights is a fundamental compo-
nent of responsible corporate governance. We are committed
to ensuring that human rights are respected and upheld in all
of our Group companies and by our suppliers. Respect for
human rights is therefore a key component of our Group-wide
sustainability strategy and our understanding of integrity and
ethical behavior. The nature of critical human rights issues var-
ies among regions and suppliers and also depends on the raw
materials, services, and supply chains in question. For this rea-
son, when implementing our approach to respecting and
upholding human rights, we not only take into account our own
plants and facilities but also include risk-based analyses of the
entire supply chain.
The following standards and guidelines in particular serve as
the key frame of reference for our human rights regulations
and our conduct in this regard: the UN Global Compact, the UN
Guiding Principles on Business and Human Rights, the Univer-
sal Declaration of Human Rights (including the relevant provi-
sions from the International Covenant on Civil and Political
Rights and International Covenant on Economic, Social and
Cultural Rights), Germany’s National Action Plan on Business
and Human Rights, and the Core Labor Standards of the Inter-
national Labour Organization. The human rights issues we
focus on and which have been derived from these frames of
reference to enable us to fulfill our due diligence obligations
are contained in our Integrity Code w www.daimler.com/
documents/sustainability/integrity/daimler-integritycode.pdf
and the Daimler Supplier Sustainability Standards.
w supplier-portal.daimler.com/docs/DOC-1547
To ensure that human rights are respected and protected,
Daimler has developed a due diligence approach called the
Daimler Human Rights Respect System (HRRS). It aims to
protect the human rights of our own employees and to ensure
that human rights are respected at our direct suppliers (Tier 1)
and at risk-relevant points of the supply chain beyond Tier 1.
In the spring of 2019, we established a new Social Compliance
department. This department is responsible for leading the
implementation of our HRRS and to this end utilizes tried and
tested methods and processes from our Compliance Manage-
ment System. Plans call for the HRRS for Daimler AG Group
companies to be gradually integrated into the Group-wide
CMS. Within the framework of the HRRS, we are also develop-
ing a separate due diligence approach for ensuring compliance
with human rights in the supply chain. This approach is based
on a foundation of proven compliance management systems.
As a proactive risk management system, the HRRS is designed
to identify and avoid systemic risks and possible negative
effects of our business activities on human rights early on. The
HRRS thus primarily protects third parties, i.e. rights-holders,
and is aimed at exerting its effect along our supply chain as
well.
With regard to Group companies, the risk assessment in the
course of the integration into the Daimler CMS envisages the
regular classification of the Group companies, initially on the
basis of predefined criteria such as the risks associated with
specific countries and specific business operations. Here we
take into account fundamental human rights standards such as
those defined in the Universal Declaration of Human Rights
and those formulated by the International Labour Organization
(ILO). We plan to use the reviews as a basis for performing a
more detailed annual analysis with the help of a human rights
survey conducted by the Group. To this end, we launched a
pilot project in 2019 that initially includes seven Group compa-
nies. We want to use the knowledge gained from the project to
expand our range of systematic risk analyses, which will then
be performed at all remaining Group companies.
Within the framework of advance risk assessment activities
that are part of a separate due diligence approach for our sup-
ply chains, we have identified 24 raw materials and 27 services
whose extraction and further processing/provision (services)
pose a potentially critical human rights risk. Various interna-
tional reference documents serve as the basis for these risk
assessments. With regard to raw materials, we use the “Child
and Forced Labor List” from the US Department of Labor, for
example. Extraction and mining methods, and the countries
where raw materials are located, all play an important role in
our analyses. With regard to services, we make use of the Cor-
ruption Perception Index published by Transparency Interna-
tional. This list is compiled on the basis of an assumption that
countries which display a high risk of corruption are also more
likely to pose a risk in terms of human rights.
The lead responsibility for the controlling of human rights
issues lies with the Integrity and Legal Affairs executive divi-
sion of Daimler AG. The member of the Board of Management
responsible for Integrity and Legal Affairs works with the pro-
curement units on ensuring human rights compliance and also
receives regular information and the corresponding reports on
human rights activities from the Chief Compliance Officer and
from specialist units in the Social Compliance and Corporate
Responsibility Management departments. Relevant procure-
ment units also provide information on their respective human
rights compliance measures to the Procurement Council (PC)
and the Board of Management members directly responsible
for the units in question. This is supplemented by regular
reports submitted to the entire Board of Management and the
Corporate Sustainability Board (CSB). Cross-functional teams
work closely on the development and implementation of suit-
able preventive activities and countermeasures. The teams
consist of human rights and compliance experts, as well as
staff from the operational procurement units and, if necessary,
from other specialist units as well. The relevant specialist units
and units are responsible for implementing and monitoring the
measures developed in each case.
220 E | NON-FINANCIAL REPORT | INDEPENDENT AUDITOR’S REPORT
Limited Assurance Report of the Independent
Auditor regarding the Combined Separate
Non-financial Report1
To the Supervisory Board of Daimler AG,
Stuttgart
We have performed an independent limited assurance
engagement on the combined separate non-financial report
of Daimler AG, Stuttgart and the Group (further “Daimler”) as
well as the by reference qualified parts “Business model”,
“The workforce”, “Legal risks” and “Non-Financial
risks”(further: “Report”) according to §§ 315b and 315c in
conjunction with 289b to 289e German Commercial Code
(HGB) for the business year from January 1 to December 31,
2019.
Management’s Responsibility
The legal representatives of Daimler are responsible for the
preparation of the Report in accordance with §§ 315b and
315c in conjunction with 289b to 289e HGB.
This responsibility of the legal representatives includes the
selection and application of appropriate methods to prepare
the Report and the use of assumptions and estimates for indi-
vidual disclosures which are reasonable under the given cir-
cumstances. Furthermore, this responsibility includes design-
ing, implementing and maintaining systems and processes
relevant for the preparation of the Report in a way that is free
of – intended or unintended – material misstatements.
Independence and quality assurance on the part of the
auditing firm
We are independent from the entity in accordance with the
requirements of independence and quality assurance set out
in legal provisions and professional pronouncements and
have fulfilled our additional professional obligations in accor-
dance with these requirements.
Our audit firm applies the national statutory provisions and
professional pronouncements for quality assurance, in partic-
ular the Professional Code for German Public Auditors and
Chartered Accountants (in Germany) and the quality assur-
ance standard of the German Institute of Public Auditors
(Institut der Wirtschaftsprüfer, IDW) regarding quality assur-
ance requirements in audit practice (IDW QS 1).
Practitioner’s Responsibility
Our responsibility is to express a conclusion on the Report
based on our work performed within our limited assurance
engagement.
We conducted our work in accordance with the International
Standard on Assurance Engagements (ISAE) 3000 (Revised):
“Assurance Engagements other than Audits or Reviews of His-
torical Financial Information” published by IAASB. This Stan-
dard requires that we plan and perform the assurance
engagement to obtain limited assurance whether any matters
have come to our attention that cause us to believe that the
Report of the Report for the period from January 1 to Decem-
ber 31, 2019 has not been prepared, in all material respects,
in accordance with §§ 315b and 315c in conjunction with
289b to 289e HGB. We do not, however, provide a separate
conclusion for each disclosure. In a limited assurance
engagement the evidence gathering procedures are more lim-
ited than in a reasonable assurance engagement and there-
fore significantly less assurance is obtained than in a reason-
able assurance engagement. The choice of audit procedures
is subject to the auditor’s own judgement.
Within the scope of our engagement, we performed amongst
others the following assurance procedures:
– Inquiries of personnel on corporate level, who are responsi-
ble for the materiality analysis, in order to gain an under-
standing of the processes for determining material sustain-
ability topics and respective reporting boundaries of Daimler
– A risk analysis, including a media search, to identify relevant
information on Daimler sustainability performance in the
reporting period
– Evaluation of the design and implementation of the systems
and processes for determining, processing and monitoring
disclosures relating to environmental, employee and social
matters, respect for human rights, and combating corruption
and bribery, including the consolidation of the data
– Inquiries of personnel on corporate level who are responsible
for determining disclosures on concepts, due diligence pro-
cesses, results and risks, for conducting internal controls
and consolidation of the disclosures
– Evaluation of selected internal and external documentation
– Analytical evaluation of data and trends of quantitative infor-
mation which are reported by all sites for consolidation on
corporate level
– Evaluation of local data collection, validation and reporting
E | NON-FINANCIAL REPORT | INDEPENDENT AUDITOR’S REPORT 221
Conclusion
Based on the procedures performed and the evidence
obtained, nothing has come to our attention that causes us to
believe that the Report of for Daimler the business year from
January 1 to December 31, 2019 is not prepared, in all mate-
rial respects, in accordance with §§ 315b and 315c in con-
junction with 289b to 289e HGB.
Restriction of Use/Clause on General Engagement Terms
This report is issued for purposes of the Supervisory Board of
Daimler AG, Stuttgart, only. We assume no responsibility with
regard to any third parties.
Our assignment for the Supervisory Board of Daimler AG,
Stuttgart, and professional liability is governed by the General
Engagement Terms for Wirtschaftsprüfer and Wirtschaftsprü-
fungsgesellschaften (Allgemeine Auftragsbedingungen für
Wirtschaftsprüfer und Wirtschaftsprüfungsgesellschaften) in
the version dated January 1, 2017 w https://www.kpmg.de/
bescheinigungen/lib/aab_english.pdf.
By reading and using the information contained in this report,
each recipient confirms notice of provisions of the General
Engagement Terms (including the limitation of our liability for
negligence to EUR 4 million as stipulated in No. 9) and
accepts the validity of the General Engagement Terms with
respect to us
Stuttgart, Feburary 19, 2020
KPMG AG
Wirtschaftsprüfungsgesellschaft
(Orginal German version signed by:)
processes as well as the reliability of reported data based on
a sample of the sites in Tuscaloosa (USA), Bremen and Wörth
(both Germany)
Dr. Thümler
Wirtschaftsprüfer
(German Public Auditor)
Mokler
Wirtschaftsprüfer
(German Public Auditor)
– Assessment of the overall presentation of the disclosures
1 Our engagement applied to the German version of the Report 2019.
This text is a translation of the Independent Assurance Report issued in
the German, whereas the German text is authoritative.
F
Consolidated
Financial
Statements
The Consolidated Financial Statements presented as follows have been pre-
pared in accordance with the International Financial Reporting Standards (IFRS)
as adopted by the European Union (EU). They also comply with additional
requirements set forth in Section 315e Sub section 1 of the German Commercial
Code (HGB).
F | CONSOLIDATED FINANCIAL STATEMENTS | CONTENTS 223
F | Consolidated Financial Statements
224
Consolidated Statement of Income
Consolidated Statement of
Comprehensive Income/Loss
Consolidated Statement of
Financial Position
226
Consolidated Statement of Cash Flows 227
Consolidated Statement of
Changes in Equity
225
228
Notes to the Consolidated Financial
Statements
1. Significant accounting policies
2. Accounting estimates and
management judgments
3. Consolidated Group
4. Revenue
5. Functional costs
6. Other operating income and expense
7. Other financial income/expense, net
8. Interest income and interest expense
9. Income taxes
10. Intangible assets
11. Property, plant and equipment
12. Equipment on operating leases
13. Equity-method investments
14. Receivables from financial services
15. Marketable debt securities and
similar investments
16. Other financial assets
17. Other assets
18. Inventories
19. Trade receivables
20. Equity
230
230
245
247
249
250
251
251
251
251
254
256
258
259
264
267
267
267
268
268
270
21. Share-based payment
22. Pensions and similar obligations
23. Provisions for other risks
24. Financing liabilities
25. Other financial liabilities
26. Deferred income
27. Contract and refund liabilities
28. Other liabilities
29. Consolidated statement of cash flows
30. Legal proceedings
31. Contingent liabilities and other
financial obligations
32. Financial instruments
33. Management of financial risks
34. Segment reporting
35. Capital management
36. Earnings per share
37. Related party disclosures
38. Remuneration of the members of the Board
of Management and the Supervisory Board
39. Auditor fees
40. Events after the reporting period
41. Additional information
271
275
280
280
282
282
283
283
284
285
288
289
299
308
311
312
312
313
314
314
314
s
t
n
e
t
n
o
C
i
d
e
n
b
m
o
C
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
s
n
o
i
s
i
v
i
D
e
h
T
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
t
r
o
p
e
R
l
i
a
c
n
a
n
F
-
n
o
N
i
d
e
t
a
d
i
l
o
s
n
o
C
s
t
n
e
m
e
t
a
t
S
l
i
a
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
r
u
F
224 F | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF INCOME
Consolidated Statement of Income
F.01
In millions of euros
Revenue
Cost of sales
Gross profit
Selling expenses
General administrative expenses
Research and non-capitalized development costs
Other operating income
Other operating expense
Profit on equity-method investments, net
Other financial income/expense, net
Interest income
Interest expense
Profit before income taxes1
Income taxes
Net profit
thereof profit attributable to non-controlling interests
thereof profit attributable to shareholders of Daimler AG
Earnings per share (in euros)
for profit attributable to shareholders of Daimler AG
Basic
Diluted
1 The reconciliation of Group EBIT to profit before income taxes is presented in Note 34.
Note
2019
2018
4
5
5
5
5
6
6
13
7
8
8
9
36
172,745
167,362
-143,580
-134,295
29,165
-12,801
-4,050
-6,586
2,837
-4,469
479
-262
397
-880
3,830
-1,121
2,709
332
2,377
33,067
-13,067
-4,036
-6,581
2,330
-1,462
656
210
271
-793
10,595
-3,013
7,582
333
7,249
2.22
2.22
6.78
6.78
The accompanying notes are an integral part of these Consolidated Financial Statements.
F | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/LOSS 225
Consolidated Statement of Comprehensive
Income/Loss1
F.02
In millions of euros
Net profit
Currency translation adjustments
Debt instruments
Unrealized gains/losses (pre-tax)
Taxes on unrealized gains/losses
and on reclassifications
Debt instruments (after tax)
Derivative financial instruments
Unrealized gains/losses (pre-tax)
Reclassifications to profit and loss
(pre-tax)
Taxes on unrealized gains/losses
and on reclassifications
Derivative financial instruments (after tax)
Equity-method investments
Unrealized gains/losses (pre-tax)
Taxes on unrealized gains/losses
and on reclassifications
Equity-method investments
(after tax)
Items that may
be reclassified
to profit/loss
Actuarial gains/losses
on equity-method investments (pre-tax)
Actuarial gains/losses on equity-method investments (after tax)
Actuarial gains/losses
from pensions and similar obligations
(pre-tax)
Taxes on actuarial
gains/losses from pensions
and similar obligations
Actuarial gains/losses
from pensions and similar obligations
(after tax)
Equity instruments
Unrealized gains/losses (pre-tax)
Taxes on unrealized gains/losses
and on reclassifications
Equity instruments (after tax)
Items that will not
be reclassified
to profit/loss
Other comprehensive income/loss, net of taxes
Total comprehensive income
Share-
holders
of
Daimler AG
Non-
controlling
interests
Daimler
Group
Share-
holders
of
Daimler AG
Non-
controlling
interests
Daimler
Group
2019
2019
2019
2018
2018
2018
2,709
475
2,377
458
332
17
7,582
234
7,249
214
333
20
6
-1
5
6
-1
5
-1,616
-1,615
979
186
-451
-26
–
-26
3
-1
-1
978
186
-451
-26
–
-26
-14
-1
-1
-2,403
-2,403
232
232
-2,171
-2,171
7
4
11
6
4
10
–
–
–
-1
1
–
–
–
–
–
-29
9
-20
-29
9
-20
-1,080
-1,081
-722
-722
537
-1,265
537
-1,266
-3
-1
-4
-3
-1
-4
–
–
–
1
–
–
1
–
–
–
17
-1,055
-1,076
21
–
–
–
–
–
1
–
1
-1
-1
-1
-1
-1,627
-1,625
171
171
-1,456
-1,454
-16
12
-4
-15
12
-3
–
–
-2
–
-2
-1
–
-1
-2,161
-2,158
551
-2,162
-2,176
201
1
18
350
-1,461
-2,516
5,066
-1,458
-2,534
4,715
-3
18
351
1 See Note 20 for other information on the Consolidated Statement of Comprehensive Income/Loss.
The accompanying notes are an integral part of these Consolidated Financial Statements.
226 F | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Consolidated Statement of Financial Position
F.03
In millions of euros
Assets
Intangible assets
Property, plant and equipment
Equipment on operating leases
Equity-method investments
Receivables from financial services
Marketable debt securities and similar investments
Other financial assets
Deferred tax assets
Other assets
Total non-current assets
Inventories
Trade receivables
Receivables from financial services
Cash and cash equivalents
Marketable debt securities and similar investments
Other financial assets
Other assets
Assets held for sale
Total current assets
Total assets
Equity and liabilities
Share capital
Capital reserves
Retained earnings
Other reserves
Equity attributable to shareholders of Daimler AG
Non-controlling interests
Total equity
Provisions for pensions and similar obligations
Provisions for other risks
Financing liabilities
Other financial liabilities
Deferred tax liabilities
Deferred income
Contract and refund liabilities
Other liabilities
Total non-current liabilities
Trade payables
Provisions for other risks
Financing liabilities
Other financial liabilities
Deferred income
Contract and refund liabilities
Other liabilities
Liabilities held for sale
Total current liabilities
Total equity and liabilities
The accompanying notes are an integral part of these Consolidated Financial Statements.
At December 31,
Note
2019
2018
10
11
12
13
14
15
16
9
17
18
19
14
15
16
17
20
22
23
24
25
9
26
27
28
23
24
25
26
27
28
15,978
37,143
51,482
5,949
52,880
770
3,347
5,803
1,286
14,801
30,948
49,476
4,860
51,300
722
2,763
4,021
1,115
174,638
160,006
29,757
12,332
50,781
18,883
7,885
2,736
5,426
–
29,489
12,586
45,440
15,853
8,855
2,970
5,889
531
127,800
302,438
121,613
281,619
3,070
11,552
46,329
393
61,344
1,497
62,841
9,728
10,597
99,179
2,112
3,935
1,598
6,060
586
3,070
11,710
49,490
397
64,667
1,386
66,053
7,393
7,734
88,662
2,375
3,762
1,612
5,438
638
133,795
117,614
12,707
10,327
62,601
7,752
1,624
7,571
3,220
–
14,185
7,828
56,240
7,657
1,580
7,081
3,169
212
105,802
302,438
97,952
281,619
F | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF CASH FLOWS 227
Consolidated Statement of Cash Flows1
2019
2018
3,830
7,751
24
-761
99
-346
-1,625
-4,664
-1,156
5,641
1,202
-2,107
7,888
-7,199
-3,636
429
-1,619
394
-5,960
7,014
-30
-10,607
840
63,607
-55,043
-3,477
-263
85
-42
-79
10,595
6,305
-872
-178
-3,850
-884
1,694
-10,257
-1,609
877
1,380
-2,858
343
-7,534
-3,167
644
-780
363
-5,739
6,210
82
-9,921
2,637
71,137
-56,318
-3,905
-315
118
-50
-78
5,628
13,226
121
3,030
15,853
18,883
133
3,781
12,072
15,853
F.04
In millions of euros
Profit before income taxes
Depreciation and amortization/impairments
Other non-cash expense and income
Gains (-)/losses (+) on disposals of assets
Change in operating assets and liabilities
Inventories
Trade receivables
Trade payables
Receivables from financial services
Vehicles on operating leases
Other operating assets and liabilities
Dividends received from equity-method investments
Income taxes paid
Cash provided by operating activities
Additions to property, plant and equipment
Additions to intangible assets
Proceeds from disposals of property, plant and equipment and intangible assets
Investments in shareholdings
Proceeds from disposals of shareholdings
Acquisition of marketable debt securities and similar investments
Proceeds from sales of marketable debt securities and similar investments
Other
Cash used for investing activities
Change in short-term financing liabilities
Additions to long-term financing liabilities
Repayment of long-term financing liabilities
Dividend paid to shareholders of Daimler AG
Dividends paid to non-controlling interests
Proceeds from the issue of share capital
Acquisition of treasury shares
Acquisition of non-controlling interests in subsidiaries
Cash provided by financing activities
Effect of foreign exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
1 See Note 29 for other information on Consolidated Statements of Cash Flows.
The accompanying notes are an integral part of these Consolidated Financial Statements.
228 F | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Consolidated Statement of Changes in Equity1
F.05
Share
capital
Capital
reserves
Retained
earnings2
Currency
translation
Equity
instruments/debt
instruments
In millions of euros
Balance at January 1, 2018
Net profit
Other comprehensive income/loss before taxes
Deferred taxes on other comprehensive income
Total comprehensive income/loss
Dividends
Capital increase/Issue of new shares
Acquisition of treasury shares
Issue and disposal of treasury shares
Changes in ownership interests in subsidiaries
Other
3,070
11,742
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
-32
–
Balance at December 31, 2018
3,070
11,710
Balance at January 1, 2019
Net profit
Other comprehensive income/loss before taxes
Deferred taxes on other comprehensive income
Total comprehensive income/loss
Dividends
Changes in the consolidated group
Capital increase/Issue of new shares
Acquisition of treasury shares
Issue and disposal of treasury shares
Changes in ownership interests in subsidiaries
Other
3,070
11,710
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
-158
–
11,552
47,555
7,249
-1,626
171
5,794
-3,905
–
–
–
–
46
49,490
49,490
2,377
-2,404
232
205
-3,477
-14
–
–
–
–
125
46,329
258
–
214
–
214
–
–
–
–
–
–
472
472
–
458
–
458
–
–
–
–
–
–
–
38
–
-44
21
-23
–
–
–
–
–
–
15
15
–
12
3
15
–
–
–
–
–
–
–
930
30
Balance at December 31, 2019
3,070
1 See Note 20 for other information on changes in equity.
2 Retained earnings also include items that will not be reclassified to the Consolidated Statement of Income. Actuarial losses from pensions and similar
obligations amount to €11,189 million net of tax in 2019 (2018: €9,017 million net of tax).
The accompanying notes are an integral part of these Consolidated Financial Statements.
F | CONSOLIDATED FINANCIAL STATEMENTS | CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 229
Other reserves
items that
may be reclassified
in profit/loss
Derivative
financial
instruments
Share of
investments
accounted
for using
the equity
method
Equity
attributable
to share-
holders of
Daimler AG
Treasury
share
Non-
controlling
interests
Total
equity
1,171
–
-1,803
537
-1,266
–
–
–
–
–
–
-95
-95
–
-637
186
-451
–
–
–
–
–
–
–
9
–
-3
-1
-4
–
–
–
–
–
–
5
5
–
-26
–
-26
–
–
–
–
–
–
–
-546
-21
In millions of euros
63,843
7,249
-3,262
728
4,715
-3,905
–
-50
50
-32
46
1,282
333
18
–
351
-315
80
–
–
-13
1
65,125
Balance at January 1, 2018
7,582
Net profit
-3,244
Other comprehensive income/loss before taxes
728
Deferred taxes on other comprehensive income
5,066
Total comprehensive income/loss
-4,220
Dividends
80
-50
50
-45
47
Capital increase/Issue of new shares
Acquisition of treasury shares
Issue and disposal of treasury shares
Changes in ownership interests in subsidiaries
Other
64,667
1,386
66,053
Balance at December 31, 2018
64,667
2,377
-2,597
421
201
-3,477
-14
–
-42
42
-158
125
1,386
332
18
–
350
-288
5
54
–
–
-16
6
66,053
Balance at January 1, 2019
2,709
-2,579
421
551
Net profit
Other comprehensive income/loss before taxes
Deferred taxes on other comprehensive income
Total comprehensive income/loss
-3,765
Dividends
-9
54
-42
42
-174
131
Changes in the consolidated group
Capital increase/Issue of new shares
Acquisition of treasury shares
Issue and disposal of treasury shares
Changes in ownership interests in subsidiaries
Other
61,344
1,497
62,841
Balance at December 31, 2019
–
–
–
–
–
–
–
-50
50
–
–
–
–
–
–
–
–
–
–
–
-42
42
–
–
–
230 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
1. Significant accounting policies
General information
The Consolidated Financial Statements of Daimler AG and
its subsidiaries (“Daimler” or “the Group”) have been prepared
in accordance with Section 315e of the German Commercial
Code (HGB) and comply with the International Financial Report-
ing Standards (IFRS) as adopted by the European Union (EU).
Daimler AG is a stock corporation organized under the laws
of the Federal Republic of Germany. The Company is entered
in the Commercial Register of the Stuttgart District Court
under No. HRB 19360 and its registered office is located at
Mercedesstraße 120, 70372 Stuttgart, Germany.
The Consolidated Financial Statements of Daimler AG are pre-
sented in euros (€). Unless otherwise stated, all amounts
are stated in millions of euros. All figures shown are rounded in
accordance with standard business rounding principles.
The Board of Management authorized the Consolidated
Financial Statements for publication on February 19, 2020.
Basis of preparation
Applied IFRS
The accounting policies applied in the Consolidated Financial
Statements comply with the IFRS required to be applied in the
EU as of December 31, 2019.
IFRS issued, EU endorsed and initially adopted in the
reporting period
In January 2016, the IASB published IFRS 16 Leases, replacing
IAS 17 Leases and IFRIC 4 Determining Whether an Arrange-
ment Contains a Lease and other interpretations. IFRS 16 abol-
ishes for lessees the previous classification of leasing agree-
ments as either operating or finance leases. Instead, IFRS 16
introduces a single lessee accounting model, requiring lessees
to recognize assets for the right to use as well as leasing
liabilities for the outstanding lease payments. This means that
as of January 1, 2019 all leases have to be reported in the
Consolidated Statement of Financial Position – very similar to
the former accounting of finance leases.
According to IFRS 16, a lessee may elect, for leases with a
lease term of 12 months or less (short-term leases) and
for leases for which the underlying asset is of low value, not to
recognize a right-of-use asset and a lease liability. Daimler
applies both recognition exemptions. The lease payments
associated with those leases are generally recognized as an
expense on a straight-line basis over the lease term or
another systematic basis if appropriate.
Right-of-use assets, which are included under property, plant
and equipment, are measured at cost less any accumulated
depreciation and, if necessary, any accumulated impairment.
The cost of a right-of-use asset comprises the present value of
the outstanding lease payments plus any lease payments made
at or before the commencement date less any lease incentives
received, any initial direct costs and an estimate of costs to
be incurred in dismantling or removing the underlying asset. In
this context, Daimler also applies the practical expedient that
the payments for non-lease components are generally recog-
nized as lease payments. If the lease transfers ownership of
the underlying asset to the lessee at the end of the lease term
or if the cost of the right-of-use asset reflects that the lessee
will exercise a purchase option, the right-of-use asset is depre-
ciated to the end of the useful life of the underlying asset.
Otherwise, the right-of-use asset is depreciated to the end of
the lease term.
Lease liabilities, which are assigned to financing liabilities, are
measured initially at the present value of the lease payments.
Subsequent measurement of a lease liability includes the
increase of the carrying amount to reflect interest on the lease
liability and reducing (while affecting other comprehensive
income) the carrying amount to reflect the lease payments made.
According to IFRS 16, the depreciation of right-of-use assets
is recognized within functional costs. The interest due on the
lease liability is a component of interest expense. The lease
expenses of leases classified according to IAS 17 as operating
leases have been fully recognized within functional costs.
With the introduction of lessee accounting, payments of lease
liabilities excluding interest of €701 million are presented in
the Consolidated Statement of Cash Flows under cash flows
from financing activities, while the interest portion is pre-
sented under cash flows from operating activities – as total
lease expenses previously were.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 231
Lease accounting for lessors has been taken over almost
identically from IAS 17 into IFRS 16.
Daimler applies IFRS 16 for the first time at January 1, 2019. In
compliance with the transition regulations, Daimler does
not adjust the prior-year figures and presents the not significant
accumulated transitional effects in retained earnings.
F.06
Reconciliation to lease liabilities in accordance with IFRS 16
In millions of euros
Other financial obligations resulting from rental
agreements and operating leases in accordance with
IAS 17 at December 31, 2018
Daimler as lessee uses the following practical expedients of
IFRS 16 at the date of initial application:
Exemptions for short-term leases
Exemptions for leases of low-value assets
– With leases previously classified as operating leases accord-
ing to IAS 17, the lease liability is measured at the present
value of the outstanding lease payments, discounted by the
incremental borrowing rate at January 1, 2019. The weighted
average incremental borrowing rate was 2.27%. The respec-
tive right-of-use asset is generally recognized at an amount
equal to the lease liability.
– An impairment review is not performed. Instead, a right-
of-use asset is adjusted by the amount of any provision for
onerous leases recognized in the Statement of Financial
Position at December 31, 2018.
Payments related to options
to extend or terminate a lease
Payments related to non-lease components
Others
Obligations from operating lease arrangements
(undiscounted)
Discounting
Obligations from operating lease arrangements
(discounted)
Carrying amount of liabilities from finance leases
in accordance with IAS 17 at December 31, 2018
Carrying amount of lease liabilities in
accordance with IFRS 16 at January 1, 2019
3,800
-226
-36
256
77
75
3,946
-503
3,443
347
3,790
– Regardless of their original lease term, leases for which
the lease term ends at the latest on December 31, 2019 are
recognized as short-term leases.
Right-of-use assets and lease liabilities include assets and
liabilities, which were recognized until December 31, 2018 as
finance leases in accordance with IAS 17.
– At the date of initial application, the measurement of a
right-of-use asset excludes the initial direct costs.
– Current knowledge is given due consideration when
determining the lease term if the contract contains options
to extend or terminate the lease.
In the context of the transition to IFRS 16, right-of-use assets
of €3,777 million (including finance leases of €335 million) and
lease liabilities of €3,790 million were recognized at January 1,
2019. The following reconciliation (see F.06) to the opening
balance for lease liabilities as at January 1, 2019 is based
on the other financial obligations from rental agreements and
operating leases at December 31, 2018.
Certain interest rate benchmarks such as the London Inter-
bank Offered Rate (for USD, GBP, CHF and JPY) will be globally
reformed and replaced by alternative risk-free interest rates
by the end of 2021. As a reaction to the uncertainty arising from
the transition, the IASB has published amendments to IFRS 9,
IAS 39 and IFRS 7 (Interest Rate Benchmark Reform:
Amendments to IFRS 9, IAS 39 and IFRS 7). These amend-
ments contain exceptions to specific hedge accounting
requirements, which allow the hedge to be continued as if the
reference rates on which the hedged item and hedging instru-
ment are based were not changed by the benchmark reform.
Application is mandatory for reporting periods beginning on
or after January 1, 2020. Application ends when the uncertainty
arising from the interest benchmark reform is no longer
present with respect to the timing and the amount of the inter-
est rate benchmark-based cash flows of the hedged item and
the hedging instrument. Daimler adopts the amendments early
and avoids the hedge accounting implications that could
have been caused by the replacement of the interest rate bench-
marks in the form of ineffectiveness or de-designation.
232 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
IFRS issued but neither EU endorsed nor yet adopted
In May 2017, the IASB issued IFRS 17 Insurance Contracts.
IFRS 17 replaces the currently applicable IFRS 4. It establishes
more transparency and comparability with regard to the recog-
nition, measurement, presentation and disclosure of insurance
contracts with the insurer. The application of IFRS 17 is manda-
tory for reporting periods beginning on or after January 1, 2021.
Early adoption is permitted. Daimler currently does not expect
any material impacts on the Group’s profitability, liquidity and
capital resources or financial position due to the application
of IFRS 17. Early adoption is not currently planned.
In addition, further standards and interpretations have been
approved which are not expected to have a material impact on
the Consolidated Financial Statements.
Presentation
Presentation in the Consolidated Statement of Financial
Position differentiates between current and non-current assets
and liabilities. Assets and liabilities are classified as current
if they are expected to be realized or settled within one year or
within a longer and normal operating cycle. Deferred tax assets
and liabilities as well as assets and provisions for pensions
and similar obligations are generally presented as non-current
items.
The Consolidated Statement of Income is presented using the
cost-of-sales method.
Measurement
The Consolidated Financial Statements have been prepared on
the historical-cost basis with the exception of certain items
such as financial assets measured at fair value through profit or
loss, derivative financial instruments, hedged items, and
pensions and similar obligations. The measurement models
applied to those exceptions are described below.
Principles of consolidation
The Consolidated Financial Statements include the financial
statements of Daimler AG and the financial statements of all
subsidiaries, including structured entities, which are directly
or indirectly controlled by Daimler AG. Control exists if the
parent company has the power of decision over a subsidiary
based on voting rights or other rights, if it participates in
positive and negative variable returns from a subsidiary, and
if it can affect these returns by its power of decision.
Structured entities which are controlled also have to be
consolidated. Accordingly, the assets and liabilities remain in
the Consolidated Statement of Financial Position. Structured
entities are entities which have been designed so that voting
or similar rights are not relevant in deciding who controls
the entity. This is the case for example if voting rights relate
to administrative tasks only and the relevant activities are
directed by means of contractual arrangements.
The financial statements of consolidated subsidiaries which
are included in the Consolidated Financial Statements are gen-
erally prepared as of the reporting date of the Consolidated
Financial Statements. The financial statements of Daimler AG
and its subsidiaries included in the Consolidated Financial
Statements are prepared using uniform recognition and mea-
surement principles. All intercompany assets and liabilities,
equity, income and expenses as well as cash flows from trans-
actions between consolidated entities are entirely eliminated
in the course of the consolidation process.
Business combinations are accounted for using the purchase
method.
Changes in equity interests in Group subsidiaries that reduce
or increase Daimler’s percentage ownership without change of
control are accounted for as an equity transaction between
owners.
Investments in associated companies, joint ventures or
joint operations
An associated company is an entity over which the Group
has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of
the investee. Associated companies are generally accounted
for using the equity method.
For entities over which Daimler has joint control together with
a partner (joint arrangements), it is necessary to differentiate
whether a joint operation or a joint venture exists. In a joint
venture, the parties that have joint control of the arrangement
have rights to the net assets of the arrangement. For joint
ventures, the equity method has to be applied. A joint operation
exists when the jointly controlling parties have direct rights
to the assets and obligations for the liabilities. In this case, the
prorated assets and liabilities and the prorated income and
expenses are generally to be recognized (proportionate consol-
idation). Joint operations that have no significant impact on
the Consolidated Financial Statements are generally accounted
for using the equity method.
In the special event that the financial statements of associated
companies, joint ventures or joint operations should not be
available in good time, the Group’s proportionate share of the
results of operations is included in Daimler’s Consolidated
Financial Statements with a one to three-month time lag. Sig-
nificant events or transactions are accounted for without a
time lag, however (see E Note 13).
Subsidiaries measured at amortized cost
Subsidiaries, associated companies, joint ventures and joint
operations whose business is non-active or of low volume and
that individually and in sum are not material for the Group and
the fair presentation of profitability, liquidity and capital
resources, and financial position are generally measured at
amortized cost in the Consolidated Financial Statements.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 233
Foreign currency translation
Transactions in foreign currency are translated at the relevant
foreign exchange rates prevailing at the transaction date. In
subsequent periods, assets and liabilities denominated in for-
eign currency are translated using period-end exchange rates;
gains and losses from this measurement are recognized in
profit and loss (except for gains and losses resulting from the
translation of equity instruments measured at fair value
through other comprehensive income, which are recognized
in other comprehensive income/loss).
Assets and liabilities of foreign companies for which the func-
tional currency is not the euro are translated into euros using
period-end exchange rates. The translation adjustments are
presented in other comprehensive income/loss. The components
of equity are translated using historical rates. The statements
of income and cash flows are translated into euros using average
exchange rates during the respective periods.
The exchange rates of the US dollar, the British pound, the
Japanese yen and the Chinese renminbi – the most significant
foreign currencies for Daimler – are as shown in table F.07.
Hyperinflation
To determine whether a country is to be considered as in
hyperinflation, Daimler refers to the list published by the Inter-
national Practices Task Force (IPTF) of the Center of the
Audit Quality or other relevant international publications. If a
country is in hyperinflation, IAS 29 Financial Reporting in
Hyperinflationary Economies has to be applied from the begin-
ning of the respective reporting period, i.e. from January 1
of the respective reporting year.
As a consequence of the assessment that Argentina is in
hyperinflation, Daimler applies IAS 29 to our Argentinian busi-
ness since January 1, 2018. This application does not have
a material impact on the Group’s profitability, liquidity and
capital resources and financial position.
F.07
Exchange rates
USD
1 € =
GBP
1 € =
JPY
1 € =
2019
CNY
1 € =
USD
1 € =
GBP
1 € =
JPY
1 € =
2018
CNY
1 € =
Average exchange rate on December 31
1.1234
0.8508
121.9400
7.8205
1.1450
0.8945
125.8500
7.8751
Average exchange rates during the
respective period
First quarter
Second quarter
Third quarter
Fourth quarter
1.1358
1.1237
1.1119
1.1071
0.8725
125.0800
0.8748
123.4700
0.9021
119.3200
0.8608
120.3200
7.6635
7.6721
7.8000
7.8012
1.2292
1.1918
1.1629
1.1414
0.8834
133.1700
0.8762
130.0900
0.8924
129.6100
0.8867
128.8200
7.8154
7.6035
7.9151
7.8953
234 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Accounting policies
Revenue recognition
Revenue from sales of vehicles, service parts and other related
products is recognized when control of the goods is trans-
ferred to the customer. This generally occurs at the time the
customer takes possession of the products.
Generally, payment from sales of vehicles, service parts
and other related products is made when the customer obtains
control of these products.
Dealers may finance their vehicle inventory by dealer inventory
financing provided by Daimler Mobility (formerly Daimler
Financial Services). Furthermore end-customers may be credit
financed by Daimler Mobility. Receivables from sales financing
with end-customers and dealers are presented in receivables
from financial services. Further information is provided in
E Note 14.
Revenue recognition from the sale of vehicles for which the
Group enters into a repurchase obligation is dependent on the
form of the repurchase agreement:
– Sales of vehicles in the form of a forward (Daimler’s obli-
gation to repurchase the asset) and a call option (Daimler’s
right to repurchase the asset) are reported as operating
leases.
– Sales of vehicles including a put option (an entity’s obliga-
tion to repurchase the asset at the customer’s request) are
reported as operating leases if the customer has a signifi-
cant economic incentive to exercise that right at contract
inception. Otherwise a sale with a right of return is reported.
Daimler considers several factors when assessing whether
the customer has a significant economic incentive to exercise
his right. Amongst others, these are the relation between
the agreed repurchase price and the expected future market
value (at the time of repurchase) of the asset, or historical
return rates.
Arrangements such as when Daimler provides customers with
a guaranteed minimum resale value that they receive on resale
(residual-value guarantee) do not constraint the customers
in their ability to direct the use of, and obtain substantially all
of the benefits from, the asset. At contract inception of a sale
with a residual-value guarantee, revenue therefore has to be
recognized. However, a potential compensation payment to
the customer has to be considered (revenue deferral).
Under a contract manufacturing agreement, Daimler sells
assets to a third-party manufacturer from which Daimler buys
back the manufactured products after completion of the
commissioned work. If the sale of the assets is not accompanied
by the transfer of control to the third-party manufacturer, no
revenue will be recognized under IFRS 15.
The Group offers extended, separately priced warranties for
certain products as well as service and maintenance con-
tracts. Revenue from these contracts is deferred insofar as a
customer has made an advance payment and is generally
recognized over the contract period in proportion to the costs
expected to be incurred based on historical information. A
loss on these contracts is recognized in the current period if the
expected costs for outstanding services under the contract
exceed unearned revenue. Usually, those contracts are paid in
advance or in equal instalments over the contract term.
For multiple-element arrangements, such as when vehicles
are sold with free or reduced-in-price maintenance programs
or with free online services, the Group generally allocates
revenue to the various elements based on their estimated rela-
tive stand-alone selling prices. To determine stand-alone sell-
ing prices, Daimler primarily uses price lists with consideration
of average price reductions granted to its customers.
Vehicles may be initially sold to non-Group dealers. Sub-
sequently a customer decides to enter into a leasing contract
with Daimler Mobility regarding such a vehicle. The vehicle is
therefore sold by the non-Group dealer to Daimler Mobility and
a leasing contract is entered into with the customer. When
control of the vehicle is transferred to the non-Group dealer
Daimler recognizes revenue from the sale of the vehicle.
The incremental cost of obtaining contracts is recognized
as an expense when incurred if the amortization period would
be no longer than one year.
Daimler does not adjust the promised amount of consideration
for the effects of a significant financing component if at
contract inception it is expected that the period between the
transfer of a promised good or service to a customer and pay-
ment by the customer is no longer than one year.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 235
Revenue also includes revenue from the rental and leasing
business as well as interest from the financial services business
at Daimler Mobility. Revenue generated from operating leases
is recognized on a straight-line basis over the periods of the
contracts. In addition, sales revenue is generated at the end of
lease contracts from the subsequent sale of the vehicles.
Revenue from receivables from financial services is recognized
using the effective interest method.
Daimler uses a variety of sales promotion programs dependent
on various market conditions in individual countries as well
as the respective product life cycles and product-related factors
(such as amounts of discounts offered by competitors, excess
industry production capacity, the intensity of market competi-
tion and consumer demand for the products). These programs
comprise cash offers to dealers and customers as well as lease
subsidies or loans at reduced interest rates which are reported
as follows:
– Revenue is recognized net of sales reductions such as cash
discounts and sales incentives granted.
– When loans are issued below market rates, related receiv-
ables are recognized at present value (using market rates)
and revenue is reduced for the interest incentive granted.
– If subsidized leasing fees are agreed upon in connection
with finance leases, revenue from the sale of a vehicle is
reduced by the amount of the interest incentive granted.
Research and non-capitalized development costs
Expenditure for research and development that does not meet
the conditions for capitalization according to IAS 38 Intangible
Assets is expensed as incurred.
Borrowing costs
Borrowing costs are expensed as incurred unless they are
directly attributable to the acquisition, construction or produc-
tion of a qualifying asset and are therefore part of the cost
of that asset. Depreciation of the capitalized borrowing costs
is presented within cost of sales.
Government grants
Government grants related to assets are deducted from the
carrying amount of the asset and are recognized in earnings
over the life of a depreciable asset as a reduced depreciation
expense. Government grants which compensate the Group for
expenses are recognized as other operating income in the
same period as the expenses themselves.
Profit/loss on equity-method investments
This item includes all income and expenses in connection
with investments accounted for using the equity method. In
addition to the prorated profits and losses from financial
investments, it also includes profits and losses resulting from
the sale of equity interests or the remeasurement of equity
interests following a loss of significant influence or joint con-
trol. Daimler’s share of dilution gains and losses occurring if
the Group or other owners do not participate in capital increases
of companies in which shares are held and accounted for
using the equity method are also included in profit/loss on
equity-method investments. This item also includes impair-
ment losses and/or gains on the reversal of such impairments
of equity-method investments.
Other financial income/expense, net
Other financial income/expense, net includes all income
and expense from financial transactions which are included
neither in interest income nor in interest expense, and which
for Daimler Mobility are included neither in revenue nor in cost
of sales. For example, expense from the compounding of inter-
est on provisions for other risks is recorded in this line item.
Furthermore, income and expenses from equity interests
are included in other financial income/expense, net, if such
in-come or expenses are not presented under equity-method
investments.
Interest income and interest expense
Interest income and interest expense include interest income
from investments in securities, cash and cash equivalents as
well as interest expense from liabilities. Furthermore, interest
and changes in fair values related to interest rate hedging
activities as well as income and expense resulting from the
allocation of premiums and discounts are included. The inter-
est components of defined benefit pension obligations and
other similar obligations as well as of the plan assets available
to cover these obligations and interest on supplementary
income tax payments or reimbursements are also presented
in this line item.
For the segment Daimler Mobility interest income and expense
and gains or losses from derivative financial instruments
from financial services business are disclosed under revenue
and cost of sales respectively.
236 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Income taxes
Income taxes are comprised of current income taxes and
deferred taxes.
Current income taxes are calculated based on the respective
local taxable income and local tax rules for the period. In addi-
tion, current income taxes presented for the period include
adjustments for uncertain tax payments or tax refunds for
periods not yet finally assessed, however, excluding interest
expenses and interest refunds and penalties on the underpay-
ment of taxes. For the case it is probable that amounts
declared as expenses in the tax returns might not be recognized
(uncertain tax positions), a liability for income taxes is
recognized. The amount is based on the best estimate of the
expected tax payment (expected value or most likely amount).
Tax refund claims from uncertain tax positions are recognized
when it is probable that they can be realized. Only in the case
of tax loss carryforwards or unused tax credits, no liability for
taxes or tax claim is recognized for these uncertain tax posi-
tions. Instead, the deferred tax assets for the unused tax loss
carryforwards or tax credits are to be adjusted.
In the year 2019, a clarification regarding the presentation
of income taxes in the statement of financial position was pub-
lished by the IFRIC. As a result of this clarification, the former
provisions for income taxes now have to be shown as income
tax liabilities which are part of the other liabilities. As a result,
the current and non-current provisions for income taxes recog-
nized at December 31, 2018 (€823 million and €628 million)
were reclassified to current and non-current liabilities. The
reclassification has no impact on the Group’s profitability
or liquidity and capital resources.
Changes in deferred tax assets and liabilities are generally rec-
ognized through profit and loss in deferred taxes in the Con-
solidated Statement of Income, except for changes recognized
in other comprehensive income/loss or directly in equity.
Deferred tax assets or liabilities are calculated on the basis of
temporary differences between the tax basis and the financial
reporting of assets and liabilities including differences from
consolidation, on unused tax loss carryforwards and unused
tax credits. Measurement is based on the tax rates expected
to be effective in the period in which an asset is recognized or
a liability is settled. For this purpose, the tax rates and tax
rules are used which have been enacted at the reporting date
or are soon to be enacted. Daimler recognizes a valuation
allowance for deferred tax assets when it is unlikely that a cor-
responding amount of future taxable profit will be available
against which the deductible temporary differences, tax loss
carryforwards and tax credits can be utilized. Deferred tax
liabilities for taxable temporary differences in connection with
investments in subsidiaries, branches, associates and inter-
ests in joint arrangements are not recognized if the Group is
able to control the timing of the reversal of the temporary
difference and it is probable that the temporary difference will
not reverse in the foreseeable future.
Earnings per share
Basic earnings per share are calculated by dividing profit attribut-
able to shareholders of Daimler AG by the weighted average
number of shares outstanding. As nothing occurred in the years
2019 and 2018 that resulted in any dilution, diluted earnings
per share were the same as basic earnings per share in those
years.
Intangible assets
Intangible assets are measured at acquisition or manufacturing
cost less accumulated amortization. If necessary, accumulated
impairment losses are recognized.
Intangible assets with indefinite useful lives are reviewed
annually to determine whether indefinite-life assessment con-
tinues to be appropriate. If not, the change in the useful-life
assessment from indefinite to finite is made on a prospective
basis.
Development costs for vehicles and components are recognized
if the conditions for capitalization according to IAS 38 are
met. Subsequent to initial recognition, the asset is carried at
cost less accumulated amortization and accumulated impair-
ment losses. Capitalized development costs include all direct
costs and allocable overheads and are amortized on a straight-
line basis over the expected product life cycle (a maximum
of ten years). Amortization of capitalized development costs is
an element of manufacturing costs and is allocated to those
vehicles and components by which they were generated and is
included in cost of sales when the inventory (vehicles) is sold.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 237
Other intangible assets with finite useful lives are generally
amortized on a straight-line basis over their useful lives (three
to ten years). The amortization period for intangible assets
with finite useful lives is reviewed at least at each year-end.
Changes in expected useful lives are treated as changes in
accounting estimates. The amortization expense on intangible
assets with finite useful lives is recorded in functional costs.
With acquisitions, goodwill represents the excess of the
consideration transferred over the fair values assigned to the
identifiable assets proportionally acquired and liabilities
assumed. Goodwill is accounted for at the subsidiaries in the
functional currency of those subsidiaries.
In connection with obtaining control, non-controlling interest
in the acquiree is principally recognized at the proportionate
share of the acquiree’s identifiable assets, which are measured
at fair value.
Property, plant and equipment
Property, plant and equipment are measured at acquisition
or manufacturing costs less accumulated depreciation. If nec-
essary, accumulated impairment losses are recognized.
The costs of internally produced equipment and facilities
include all direct costs and allocable overheads. Acquisition or
manufacturing costs include the estimated costs, if any,
of dismantling and removing the item and restoring the site.
F.08
Useful lives of property, plant and equipment
Buildings and site improvements
Technical equipment and machinery
Other equipment, factory and office equipment
10 to 50 years
5 to 25 years
3 to 30 years
In the case of an operating lease, the lease payments or
rental payments were expensed on a straight-line basis in the
Consolidated Statement of Income.
Assets carried as finance leases were measured at the begin-
ning of the (lease) contract at the lower of the present value of
the minimum lease payments and the fair value of the leased
object, and in the following periods less accumulated deprecia-
tion and other accumulated impairment losses. Depreciation
was on a straight-line basis; residual values of the assets were
given due consideration. Payment obligations resulting from
future lease payments were discounted and disclosed under
financing liabilities.
Since January 1, 2019 the Group as a lessee has recognized
right-of-use assets and the lease liabilities for the payment
obligations entered into for generally all leases in the state-
ment of financial position at present value. The lease liabilities
include the following lease payments:
Property, plant and equipment are depreciated over the useful
lives as shown in table F.08.
– fixed payments including defacto fixed payments, less lease
incentives receivables from the lessor;
Leasing
Leases include all contracts that transfer the right to use a
specified asset for a stated period of time in exchange for con-
sideration, even if the right to use such asset is not explicitly
described in the contract. The Group is a lessee mainly of real
estate properties and a lessor of its products.
Daimler as lessee
Until December 31, 2018 it was evaluated on the basis of the
risks and rewards of a leased asset according to IAS 17
whether the ownership of the leased asset is attributed to the
lessee (so-called finance lease) or to the lessor (so-called
operating lease).
– variable lease payments linked to an index or interest rate;
– amounts expected to be payable under residual value
guarantees;
– the exercise price of purchase options, when exercise is
estimated to be reasonably certain and
– contractual penalties for the termination of a lease if
the lease term reflects the exercise of a termination option.
Lease payments are discounted at the rate implicit in the lease
if that rate can readily be determined. Otherwise, discounting
is at the incremental borrowing rate. The incremental borrow-
ing rate, which is mainly applied at Daimler, is based on risk-
adjusted interest rates and determined for the respective lease
terms and currencies. As the cash flow pattern of the refer-
ence interest rates (bullet bonds) does not correspond to the
cash flow pattern of a lease contract (annuity), we use a dura-
tion adjustment in order to account for that difference.
238 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Daimler generally also applies the option for contracts
comprising lease components as well as non-lease components
not to split these components.
Extension and termination options are part of a number
of leases particularly of real estate. Such contract terms offer
Daimler the greatest possible flexibility. In determining
the lease term, all facts and circumstances offering economic
incentives for exercising extension options or not exercising
termination options are taken into account. In determining the
lease term, those options are only considered if they are
reasonably certain.
– Sales of vehicles including a put option (an entity’s obliga-
tion to repurchase the asset at the customer’s request) are
reported as operating leases if the customer has a signifi-
cant economic incentive to exercise that right. Otherwise a
sale with a right of return is reported. Daimler considers
several factors when assessing whether a customer has a
significant economic incentive to exercise his right at
contract inception. Amongst others these are the relation
between repurchase price and the expected future market
value (at the time of repurchase) of the asset or historical
return rates.
Sale and leaseback
In a sale and leaseback transaction, the requirements of
IFRS 15 are applied, to ascertain whether the transfer of an
asset has to be accounted for as a sale.
If the transfer of an asset does not satisfy the requirements
of IFRS 15 to be accounted for as a sale of the asset, the trans-
ferred asset is still recognized and a financial liability is recog-
nized equal to the transfer proceeds in accordance with IFRS 9.
If the transfer of an asset is accounted for as a sale, the
lessee accounting principles described above apply to those
sold assets if Daimler leases them back from the buyer.
Daimler as lessor
Based on the risk and rewards associated with a leased asset,
it is assessed whether economic ownership of the leased
asset is transferred to the lessee (so-called finance leases) or
remains with the lessor (so-called operating leases).
Operating leases, i.e. by which the economic ownership of the
vehicle remains at Daimler, relate to vehicles that the Group
produces itself and leases to third parties. Additionally an
operating lease may have to be reported with sales of vehicles
for which the Group enters into a repurchase obligation:
– Sales of vehicles in the form of a forward (an entity’s obli-
gation to repurchase the asset) and a call option (an entity’s
right to repurchase the asset) are reported as operating
leases.
As part of the established residual-value management process,
especially for operating lease contracts, certain assumptions
are regularly made at local and corporate levels regarding the
expected level of prices, based upon which the cars to be
returned in the leasing business are evaluated. If changing
market developments lead to a negative deviation from
assumptions, there is a risk of lower residual values of used
cars. Depending on the region and the current market situa-
tion, the measures taken generally include continuous market
monitoring as well as, if required, price-setting strategies or
sales-promotion measures designed to regulate vehicle inven-
tories. The quality of market forecasts is verified by regular
comparisons of internal and external sources, and, if required,
the determination of residual values is adjusted and further
developed with regard to methods, processes and systems.
In the case of accounting as an operating lease, these vehicles
are capitalized at (depreciated) cost of production under
leased equipment and are depreciated over the contract term
on a straight-line basis with consideration of the expected
residual values. Changes in the expected residual values lead
either to prospective adjustments of the scheduled deprecia-
tion or to an impairment loss if necessary. The vehicles are
allocated to the segment which bears substantially all of the
residual value risk.
Operating leases also relate to vehicles, primarily Group prod-
ucts that Daimler Mobility acquires from non-Group dealers
or other third parties and leases to end customers. These vehi-
cles are presented at (amortized) cost of acquisition under
leased equipment in the Daimler Mobility segment. If these
vehicles are Group products and are subsidized, the subsidies
are deducted from the cost of acquisition. After revenue is
received from the sale to independent dealers, these Group
products generate revenue from lease payments and sub-
sequent resale on the basis of the separate leasing contracts.
The revenue received from the sale of Group products to the
dealers is estimated by the Group as being of the magnitude of
the respective addition to leased equipment at Daimler Mobil-
ity. In 2019, additions to leased equipment from these vehicles
at Daimler Mobility amounted to approximately €14 billion
(2018: approximately €13 billion).
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 239
In the case of finance leases, the Group presents the receiv-
ables under receivables from financial services in an amount
corresponding to the net investment of the lease agreements.
The net investment of a lease agreement is the gross invest-
ment (future lease payments and non-guaranteed residual value)
discounted at the rate upon which the lease agreement is
based.
Equity-method investments
On the date of acquisition, a positive difference between cost
of acquisition and Daimler’s share of the fair values of the
identifiable assets and liabilities of the associated company or
joint venture is determined and recognized as investor level
goodwill. The goodwill is included in the carrying amount of the
equity-method investment. If an equity interest in an existing
associated company is increased without change in significant
influence, goodwill is determined only for the additionally
acquired interest; the previous investment is not remeasured
at fair value.
Daimler reviews on each reporting date whether there is any
objective indication of impairments or impairment reversals of
equity-method investments. If such indications exist, the
Group determines the impairment loss or reversal to be recog-
nized. If the carrying amount exceeds the recoverable amount
of an investment, the carrying amount is written down to the
recoverable amount. The recoverable amount is the greater of
fair value less costs to sell and value in use. An impairment
reversal is carried out if there is objective evidence for an impair-
ment reversal. If such an assessment is made, the recoverable
amount is remeasured. An impairment reversal is recognized
to the extent that the recoverable amount has increased sub-
sequent to the impairment and is limited to the amount by
which an asset has been impaired.
Gains or losses (to be eliminated) from transactions with com-
panies accounted for using the equity method are recognized
through profit and loss with corresponding adjustments of the
investments’ carrying amounts. Deconsolidation effects from
the contribution of interests in subsidiaries to investments
which are measured using the equity method are also subject
to elimination adjustments to the carrying amount of the
investment.
Impairment of non-current non-financial assets
Daimler assesses at each reporting date whether there is
an indication that an asset may be impaired or whether there is
an indication that a previously recognized impairment loss
may be reversed. If such indication exists, Daimler estimates the
recoverable amount of the asset. The recoverable amount is
determined for each individual asset unless the asset generates
cash inflows that are not largely independent of those from
other assets or groups of assets (cash-generating units). Good-
will and other intangible assets with indefinite useful lives are
tested at least annually for impairment; this takes place at the
level of the cash-generating units. If the carrying amount of
an asset or of a cash-generating unit exceeds the recoverable
amount, an impairment loss is recognized for the difference.
The recoverable amount is the higher of fair value less costs of
disposal and value in use. For cash-generating units, Daimler
in a first step determines the respective recoverable amount as
value in use and compares it with the respective carrying
amount (including goodwill). The cash-generating units are
generally defined as the reporting segments.
Value in use is measured by discounting expected future cash
flows from the continuing use of the cash-generating units
using a risk-adjusted interest rate. Future cash flows are deter-
mined on the basis of the long-term planning, which is
approved by management and which is valid at the date when
the impairment test is conducted. This planning is based
on expectations regarding future market shares, the general
development of respective markets as well as the products’
profitability. The multi-year planning comprises a planning hori-
zon until 2026 and therefore mainly covers the product life
cycles of the automotive business. The rounded risk-adjusted
interest rates used to discount cash flows, which are calcu-
lated for each cash-generating unit, are unchanged from the
previous year at 8% after taxes for the cash-generating units of
the automotive business. For the cash-generating unit Daimler
Mobility, a risk-adjusted interest rate of 9% after taxes is
applied (unchanged from the previous year). Whereas the dis-
count rate for the cash-generating unit Daimler Mobility
represents the cost of equity, the risk-adjusted interest rate for
the cash-generating units of the automotive business is based
on the weighted average cost of capital (WACC). These are cal-
culated based on the capital asset pricing model (CAPM)
taking into account current market expectations. In calculating
the risk-adjusted interest rate for impairment test purposes,
specific peer group information is used for beta factors, capital-
structure data and cost of debt. Periods not covered by the
forecast are taken into account by recognizing a residual value
(terminal value), which does not consider any growth rates.
In addition, several sensitivity analyses are conducted. These
show that even in the case of more unfavorable premises for
main influencing factors with respect to the original planning,
no need for impairment exists. If value in use is lower than
the carrying amount, fair value less costs of disposal is addi-
tionally calculated to determine the recoverable amount.
240 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Upon initial recognition, financial instruments are measured
at fair value. For the purpose of subsequent measurement,
financial instruments are allocated to one of the categories
mentioned in IFRS 9 Financial Instruments (financial assets
measured at amortized cost, financial assets measured at fair
value through other comprehensive income and financial
assets measured at fair value through profit or loss). Transac-
tion costs directly attributable to acquisition or issuance are
considered by determining the carrying amount if the financial
instruments are not measured at fair value through profit
or loss.
Financial assets
Financial assets primarily comprise receivables from financial
services, trade receivables, receivables from banks, cash
on hand, derivative financial assets, marketable securities and
similar investments and financial investments. The classifica-
tion of financial instruments is based on the business model in
which these instruments are held and on their contractual
cash flows.
The determination of the business model is made at the
portfolio level and is based on management’s intention and
past transaction patterns. Assessments of the contractual
cash flows are made on an instrument by instrument basis.
Financial assets at fair value through profit or loss.
Financial assets at fair value through profit or loss include
financial assets with cash flows other than those of principal
and interest on the nominal amount outstanding. Furthermore,
financial assets that are held in a business model other than
“hold to collect” or “hold to collect and sell” are included here.
An assessment for assets other than goodwill is made at each
reporting date as to whether there is any indication that
previously recognized impairment losses may no longer exist
or may be reversed. If this is the case, Daimler records a
partial or entire reversal of the impairment; the carrying amount
is thereby increased to the recoverable amount. However,
the increased carrying amount may not exceed the carrying
amount that would have been determined (net of deprecia-
tion) had no impairment loss been recognized in prior years.
Non-current assets held for sale and disposal groups
The Group classifies non-current assets or disposal groups as
held for sale if the carrying amount will be recovered princi-
pally through a sale transaction rather than through continuing
use. In this case, the assets or disposal groups are no longer
depreciated but measured at the lower of carrying amount and
fair value less costs to sell. Immediately before the classifica-
tion, the carrying amount is determined in accordance with the
applicable requirements. If fair value less costs to sell subse-
quently increases, any impairment loss previously recognized
is reversed. This reversal is restricted to the impairment loss
previously recognized for the assets or disposal group con-
cerned. The Group generally discloses these assets or disposal
groups separately in the Consolidated Statement of Financial
Position.
Inventories
Inventories are measured at the lower of acquisition or manu-
facturing cost and net realizable value. The net realizable value
is the estimated selling price less estimated costs of comple-
tion and estimated costs to sell. The acquisition or manufactur-
ing costs of inventories are generally based on the specific
identification method and include costs incurred in acquiring
the inventories and bringing them to their existing location
and condition. Acquisition or manufacturing costs for large
numbers of inventories that are interchangeable are allocated
under the average cost formula. In the case of manufactured
inventories and work in progress, manufacturing cost also
includes production overheads based on normal capacity.
Financial instruments
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity. Financial instruments in the
form of financial assets and financial liabilities are generally
presented separately. Financial instruments are recognized
as soon as Daimler becomes a party to the contractual provi-
sions of the financial instrument. In the case of purchases or
sales of financial assets through the regular market, Daimler
uses the transaction date as the date of initial recognition
or derecognition.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 241
assets at fair value through other comprehensive income is
generally reported as interest income using the effective inter-
est method. Changes in the fair value of equity instruments
measured at fair value through other comprehensive income
are not recycled to profit or loss. Dividends are recognized in
profit or loss when the right of payment has been established.
Impairment of financial assets
At each reporting date, a loss allowance is recognized for
financial assets, loan commitments and financial guarantees
other than those to be measured at fair value through
profit or loss reflecting expected losses for these instruments.
Expected credit losses are allocated using three stages:
Stage 1: expected credit losses within the next twelve months
Stage 1 includes all contracts with no significant increase
in credit risk since initial recognition and usually includes new
acquisitions and contracts with fewer than 31 days past
due date. The portion of the lifetime expected credit losses
resulting from default events possible within the next 12
months is recognized.
Stage 2: expected credit losses over the lifetime – not credit
impaired
If a financial asset has a significant increase in credit risk since
initial recognition but is not yet credit impaired, it is moved
to stage 2 and measured at lifetime expected credit loss, which
is defined as the expected credit loss that results from all
possible default events over the expected life of a financial
instrument.
Stage 3: expected credit losses over the lifetime – credit
impaired
If a financial asset is defined as credit-impaired or in default,
it is transferred to stage 3 and measured at lifetime expected
credit loss. Objective evidence for a credit-impaired financial
asset includes 91 days past due date and other information
about significant financial difficulties of the borrower.
In addition, derivatives, including embedded derivatives sepa-
rated from the host contract, which are not classified as
hedging instruments in hedge accounting, as well as financial
assets acquired for the purpose of selling in the short term
that are classified as held for trading, are included here. Gains
or losses on these financial assets are recognized in profit or
loss.
Financial assets at amortized cost. Financial assets at amor-
tized cost are non-derivative financial assets with contractual
cash flows that consist solely of payments of principal and
interest on the nominal amount outstanding and which are
held with the aim of collecting the contractual cash flows, such
as receivables from financial services, trade receivables or
cash and cash equivalents (business model “hold to collect”).
Cash and cash equivalents consist primarily of cash on hand,
checks and demand deposits at banks, as well as debt instru-
ments and certificates of deposits with a remaining term
when acquired of up to three months, which are not subject to
any material value fluctuations. Cash and cash equivalents
correspond with the classification in the Consolidated State-
ment of Cash Flows.
After initial recognition, financial assets at amortized cost are
subsequently carried at amortized cost using the effective
interest method less any loss allowances. Gains and losses are
recognized in the Consolidated Statement of Income when
the financial assets at amortized cost are impaired or derecog-
nized. Interest effects on the application of the effective
interest method are also recognized in profit or loss as well as
effects from foreign currency translation.
Financial assets at fair value through other comprehensive
income. Financial assets at fair value through other comprehen-
sive income are non-derivative financial assets with contrac-
tual cash flows that consist solely of payments of principal and
interest on the nominal amount outstanding which are held
to collect the contractual cash flows as well as to sell the finan-
cial assets, e.g. to achieve a defined liquidity target (business
model “hold to collect and sell”). This category also includes
equity instruments not held for trading for which the option to
present changes in the fair value of the instrument within
other comprehensive income has been applied.
After initial measurement, financial assets at fair value through
other comprehensive income are measured at fair value,
with unrealized gains or losses being recognized in other com-
prehensive income/loss. Upon disposal of financial assets,
the accumulated gains and losses recognized in other compre-
hensive income/loss resulting from measurement at fair value
are recognized in profit or loss. Interest earned on financial
242 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The determination of whether a financial asset has experienced
a significant increase in credit risk is based on an assessment
of the probability of default, which is made at least quarterly,
incorporating external credit rating information as well as
internal information on the credit quality of the financial asset.
For debt instruments that are not receivables from financial
services, a significant increase in credit risk is assessed mainly
based on past-due information or the probability of default.
A financial asset is migrated to stage 2 if the asset’s credit
risk has increased significantly compared to its credit risk at
initial recognition. The credit risk is assessed based on
the probability of default. For trade receivables, the simplified
approach is applied whereby all trade receivables are allocated
to stage 2 initially. Hence, no determination of significant
increases in credit risk is necessary.
Daimler applies the low credit risk exception to the stage
allocation to quoted debt instruments with investment-grade
ratings. These debt instruments are always allocated to stage 1.
In stage 1 and 2, the effective interest revenue is calculated
based on gross carrying amounts. If a financial asset becomes
credit impaired in stage 3, the effective interest revenue is
calculated based on its net carrying amount (gross carrying
amount adjusted for any loss allowance).
Measurement of expected credit losses. Expected credit losses
are measured in a way that reflects:
a)
the unbiased and probability-weighted amount;
b) the time value of money and
c)
reasonable and supportable information (if available
without undue cost or effort) at the reporting date about
past events, current conditions and forecasts of future
economic conditions.
Expected credit losses are measured as the probability-
weighted present value of all cash shortfalls over the expected
life of each financial asset. For receivables from financial
services, expected credit losses are mainly calculated with a
statistical model using three major risk parameters: pro-
bability of default, loss given default and exposure at default.
The estimation of these risk parameters incorporates all
available relevant information, not only historical and current
loss data, but also reasonable and supportable forward-look-
ing information reflected by the future expectation factors.
This information includes macroeconomic factors (e.g., gross
domestic product growth, unemployment rate, cost perfor-
mance index) and forecasts of future economic conditions. For
receivables from financial services, these forecasts are
performed using a scenario analysis (basic scenario, optimistic
scenario and pessimistic scenario). The impairment amount
for trade receivables is predominantly determined on a collec-
tive basis.
A financial instrument is written off when there is no reasonable
expectation of recovery, for example at the end of insol-
vency proceedings or after a court decision of uncollectibility.
Significant modification (e.g., that leads to a change in the
present value of the contractual cash flows of 10%) leads
to derecognition of financial assets. This is estimated to be rare
and immaterial for receivables from financial services. If the
terms of a contract are renegotiated or modified and this does
not result in derecognition of the contract, then the gross
carrying amount of the contract has to be recalculated and a
modification gain or loss has to be recognized in profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net
amount is presented in the Consolidated Statement of Finan-
cial Position provided that an enforceable right currently exists
to offset the amounts involved, and there is an intention either
to carry out the offsetting on a net basis or to settle a liability
when the related asset is sold.
Financial liabilities
Financial liabilities primarily include trade payables, liabilities
to banks, bonds, derivative financial liabilities and other
liabilities.
Financial liabilities measured at amortized cost. After initial
recognition, financial liabilities are subsequently measured at
amortized cost using the effective interest method.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 243
Financial liabilities at fair value through profit or loss. Financial
liabilities at fair value through profit or loss include financial
liabilities held for trading. Derivatives (including embedded
derivatives separated from the host contract) which are not
used as hedging instruments in hedge accounting are classi-
fied as held for trading. Gains or losses on liabilities held for
trading are recognized in profit or loss.
Derivative financial instruments and hedge accounting
The Group uses derivative financial instruments exclusively for
hedging financial risks that arise from its operating or financing
activities or liquidity management. These are mainly currency
risks, interest rate risks and commodity price risks.
Embedded derivatives are principally separated from the host
contract and recognized separately. However, embedded
derivatives are not separated from the host contract if that host
contract is a financial asset, if Daimler chooses to measure
a hybrid contract at fair value through profit or loss, or if the
embedded derivative is closely related to the host contract.
Derivative financial instruments are measured at fair value
upon initial recognition and at each subsequent reporting date.
The fair value of listed derivatives is equal to their positive
or negative market value. If a market value is not available, fair
value is calculated using standard financial valuation models
such as discounted cash flow or option-pricing models. Deriva-
tives are presented as assets if their fair value is positive and
as liabilities if the fair value is negative.
If the requirements for hedge accounting set out in IFRS 9 are
met, Daimler designates and documents the hedge relation-
ship from the date a derivative contract is entered into as a fair
value hedge, a cash flow hedge or a hedge of a net investment
in a foreign business operation. In a fair value hedge, the
changes in the fair value of a recognized asset or liability or an
unrecognized firm commitment are hedged. In a cash flow
hedge, the variability of cash flows to be received or paid from
expected transactions related to a recognized asset or
liability or a highly probable forecast transaction is hedged. The
documentation of the hedging relationship includes the objec-
tives and strategy of risk management, the type of hedging
relationship, the nature of the risk being hedged, the identifica-
tion of the eligible hedging instrument and the eligible hedged
item, as well as an assessment of the effectiveness require-
ments comprising the risk mitigating economic relationship, the
absence of deteriorating effects from credit risk and the appro-
priate hedge ratio. Hedging transactions are regularly assessed
to determine whether the effectiveness requirements are met
while they are designated.
Changes in fair value of non-designated derivatives are recog-
nized in profit or loss. For fair value hedges, changes in the
fair value of the hedged item and the derivative are recognized
in profit or loss. For cash flow hedges, fair value changes in
the effective portion of the hedging instrument are recognized
after tax in other comprehensive income.
Under IFRS 9, for cash flow hedges in procurement trans-
actions expected with a high degree of probability, designation
can be made for separable risk components of these non-
financial hedged items.
Under IFRS 9, with cash flow hedges, amounts recognized in
other comprehensive income as effective hedging gains
or losses from hedging instruments are removed from the
reserves for derivative financial instruments and directly
included in the initial cost or carrying amount of the hedged
item at initial recognition if a hedged forecast transaction
results in the recognition of a non-financial asset or non-
financial liability.
For other cash flow hedges, the accumulated hedging gains or
losses from hedging instruments are reclassified from the
reserves for derivative financial instruments to the Consolidated
Statement of Income when the hedged item affects profit or
loss. The ineffective portions of fair value changes are recog-
nized directly in profit or loss.
For derivative instruments designated in a hedge relationship,
certain components can be excluded from designation and the
changes in these components’ fair value are then deferred in
other comprehensive income under IFRS 9. This may apply for
example to the time value of options, the forward element of
a forward contract or cross currency basis spreads.
Hedge relationships are to be discontinued prospectively if
a particular hedge relationship ceases to meet the qualifying
criteria for hedge accounting under IFRS 9. Instances that
require discontinuation of hedge accounting are, among others,
loss of the economic relationship between the hedged item
and the hedging instrument, disposal or termination of the
hedging instrument, or a revision of the documented risk man-
agement objective of a particular hedge relationship. Accu-
mulated hedging gains and losses from cash flow hedges are
retained and are reclassified from equity as described at
maturity if the hedged future cash flows are still expected to
occur. Otherwise, accumulated hedging gains and losses
are immediately reclassified to profit or loss.
244 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Provisions for other risks
A provision is recognized when a liability to third parties
has been incurred, an outflow of resources is probable and the
amount of the obligation can be reasonably estimated. The
amount recognized as a provision represents the best estimate
of the obligation at the reporting date. Provisions with an
original maturity of more than one year are discounted to the
present value of the expenditures expected to settle the
obligation at the end of the reporting period. If the criteria of
the regulations on recognition and measurement of pro-
visions are not fulfilled and the possibility of a cash outflow
upon settlement is not unlikely, the item is to be presented
as a contingent liability, insofar as it is adequately measurable.
The amount disclosed as a contingent liability represents
the best estimate of the possible obligation at the reporting
date. Provisions and contingent liabilities are regularly
reviewed and adjusted as further information becomes avail-
able or circumstances change.
A provision for expected warranty costs is recognized when
a product is sold or when a new warranty program is initiated.
Estimates for accrued warranty costs are primarily based on
historical experience.
Restructuring provisions are set up in connection with programs
that materially change the scope of business performed by
a segment or business unit or the manner in which business is
conducted. In most cases, restructuring expenses include
termination benefits and compensation payments due to the
termination of agreements with suppliers and dealers.
Restructuring provisions are recognized when the Group has a
detailed formal plan that has either commenced implemen-
tation or been announced.
If derivative financial instruments do not or no longer qualify
for hedge accounting because the qualifying criteria for
hedge accounting are not or are no longer met, the derivative
financial instruments are classified as held for trading and
are measured at fair value through profit or loss.
Pensions and similar obligations
The measurement of defined benefit plans for pensions and
other post-employment benefit obligations (medical care)
in accordance with IAS 19 Employee Benefits is based on the
projected unit credit method. Plan assets invested to cover
defined benefit pension obligations and other post-employment
benefit obligations (medical care) are measured at fair value
and offset against the corresponding obligations. Differences
between the assumptions made and actual developments as
well as changes in actuarial assumptions for the measurement
of defined benefit plans and similar obligations result in
actuarial gains and losses, which have a direct impact on the
Consolidated Statement of Financial Position or on the
Consolidated Statement of Comprehensive Income/Loss.
The balance of defined benefit plans for pensions and other
post-employment benefit obligations and plan assets (net
pension obligation or net pension assets) accrues interest at
the discount rate used as a basis for the measurement of
the gross pension obligation. The resulting net interest expense
or income is recognized in profit and loss under interest
expense or interest income in the Consolidated Statement of
Income. The other expenses resulting from pension obliga-
tions and other post-employment benefit obligations (medical
care), which mainly result from entitlements acquired during
the year under review, are taken into consideration in the func-
tional costs in the Consolidated Statement of Income.
The discount factors used to calculate the present values
of defined benefit pension obligations are to be determined –
with maturities and currencies matching the pension pay-
ments – by reference to market yields at the end of the report-
ing period on high-quality corporate bonds in the respective
markets. For very long maturities, there are no high-quality
corporate bonds available as a benchmark. The respective
discount factors are estimated by extrapolating current market
rates along the yield curve.
Gains or losses on the curtailment or settlement of a
defined benefit plan are recognized in profit or loss when the
curtailment or settlement occurs.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 245
2. Accounting estimates and management
judgments
In the Consolidated Financial Statements, to a certain degree,
estimates and management judgments have to be made which
can affect the amounts and reporting of assets and liabilities,
the reporting of contingent assets and liabilities on the balance
sheet date, and the amounts of income and expense reported
for the period. The major items affected by such estimates and
management judgments are described as follows. Actual
amounts may differ from the estimates. Changes in the estimates
and management judgments can have a material impact on
the Consolidated Financial Statements.
Recoverable amounts of cash-generating units and
equity-method investments
In the context of impairment tests for non-financial assets,
estimates have to be made to determine the recoverable
amounts of cash-generating units. Assumptions have to be
made in particular with regard to future cash inflows and
outflows for the planning period and the following periods.
The estimates include assumptions regarding future market
shares and the growth of the respective markets as well
as regarding the products’ profitability. On the basis of the
impairment tests carried out in 2019, the recoverable
amounts are substantially larger than the net assets of the
Group’s cash-generating units.
When objective evidence of impairment or impairment reversal is
present, estimates and assessments also have to be made to
determine the recoverable amount of an equity-method invest-
ment. The determination of the recoverable amount is based
on assumptions regarding future business developments for the
determination of the expected future cash flows of that finan-
cial investment. See E Note 13 for the presentation of carry-
ing amounts and fair values of equity-method investments in
listed companies.
Contract and refund liabilities
Contract liabilities. A contract liability is an entity’s obligation
to transfer goods or services to a customer for which the entity
has received consideration (or the amount is due) from the
customer.
Contract liabilities occur at Daimler especially in the following
circumstances:
– deferred revenue for service and maintenance contracts
and for extended warranties, and
– advance payments received on contracts in the scope of
IFRS 15.
Refund liabilities. A refund liability occurs if Daimler receives
consideration from a customer and expects to refund some or
all of that consideration to the customer. A refund liability
is measured at the amount of consideration received for which
Daimler does not expect to be entitled and is thus not included
in the transaction price.
Refund liabilities occur at Daimler especially in the following
circumstances:
– obligations from sales transactions (especially performance
bonuses, discounts and other price concessions) in the
scope of IFRS 15, and
– sales with the right of return and residual-value guarantees.
Share-based payment
Share-based payment comprises cash-settled liability awards.
Liability awards are measured at fair value at each balance sheet
date until settlement and are classified as provisions. The
profit or loss of the period equals the addition to and/or the
reversal of the provision during the reporting period and
the dividend equivalent paid during the period, and is included
in the functional costs.
Presentation in the Consolidated Statement of Cash Flows
Interest paid as well as interest and dividends received
are classified as cash provided by/used for operating activities.
The cash flows from short-term marketable debt securities
with high turnover rates and significant amounts are offset and
presented within cash provided by/used for investing activities.
246 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Recoverable amount of equipment on operating leases
Daimler regularly reviews the factors determining the values of
its leased vehicles. In particular, it is necessary to estimate
the residual values of vehicles at the end of their leases, which
constitute a substantial part of the expected future cash flows
from leased assets. In this context, assumptions are made
regarding major influencing factors, such as the expected num-
ber of returned vehicles, the latest remarketing results and
future vehicle model changes. Those assumptions are deter-
mined either by qualified estimates or by publications provided
by expert third parties; qualified estimates are based, as
far as publicly available, on external data with consideration of
internally available additional information such as historical
experience of price developments and recent sale prices. The
residual values thus determined serve as a basis for depre-
ciation; changes in residual values lead either to prospective
adjustments of the depreciation or, in the case of a significant
decline in expected residual values, to an impairment. If depre-
ciation is prospectively adjusted, changes in estimates of
residual values do not have a direct effect but are equally dis-
tributed over the remaining periods of the lease contracts.
Collectability of receivables from financial services
The Group regularly estimates the risk of default on receivables
from financial services. Many factors are taken into consider-
ation in this context, including historical loss experience, the
size and composition of certain portfolios, current economic
events and conditions and the estimated fair values and ade-
quacy of collaterals. In addition to historical and current
information on losses, appropriate and reliable forward-looking
information on factors is also included. This information
includes macroeconomic factors (e.g. GDP growth, unemploy-
ment rate, cost-performance index) and forecasts of future
economic conditions. For receivables from financial services,
these forecasts are determined using a scenario analysis
(baseline scenario, optimistic and pessimistic scenario). Changes
to the estimation and assessment of these factors influence
the allowance for credit losses with a resulting impact on the
Group’s net profit. See also E Notes 14 and 33 for further
information.
Product warranties
The recognition and measurement of provisions for product
warranties is generally connected with estimates.
The Group provides various types of product warranties depend-
ing on the type of product and market conditions. Provisions
for product warranties are generally recognized when vehicles
are sold or when new warranty programs are initiated. Based
on historical warranty claim experience, assumptions have to
be made on the type and extent of future warranty claims and
customer goodwill, as well as on possible recall campaigns for
each model series. These assessments are based on experi-
ence of the frequency and extent of vehicle faults and defects
in the past. In addition, the estimates also include assumptions
on the amounts of potential repair costs per vehicle and the
effects of possible time or mileage limits. The provisions are
regularly adjusted to reflect new information. Further infor-
mation on provisions for other risks is provided in E Note 23.
Liability and litigation risks and regulatory proceedings
Various legal proceedings, claims and governmental investiga-
tions are pending against Daimler AG and its subsidiaries on
a wide range of topics. If the outcome of such legal proceedings
is detrimental to Daimler, the Group may be required to pay
substantial compensatory and punitive damages, to undertake
service actions or recall campaigns, to pay fines or to carry
out other costly actions. Litigation and governmental investiga-
tions often involve complex legal issues and are connected
with a high degree of uncertainty. Accordingly, the assessment
of whether an obligation exists on the balance sheet date as
a result of an event in the past, and whether a future cash out-
flow is likely and the obligation can be reliably estimated,
largely depends on estimations by the management. Daimler
regularly evaluates the current stage of legal proceedings,
also with the involvement of external legal counsel. It is there-
fore possible that the amounts of provisions for pending or
potential litigation will have to be adjusted due to future devel-
opments. Changes in estimates and premises can have a
material effect on the Group’s future profitability. It is also pos-
sible that provisions accrued for some legal proceedings
may turn out to be insufficient once such proceedings have
ended. Daimler may also become liable for payments in
legal proceedings no provisions were established for. Although
the final resolution of any such proceedings could have a
material effect on Daimler’s operating results and cash flows
for a particular reporting period, Daimler believes that it
should not materially affect the Group’s financial position. Fur-
ther information on liability and litigation risks and regulatory
proceedings is provided in E Note 30.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 247
Pensions and similar obligations
The calculation of provisions for pensions and similar obliga-
tions and the related pension cost are based on various
actuarial valuations. The calculations are subject to various
assumptions on matters such as current actuarially devel-
oped probabilities (e.g. discount factors and cost-of-living
increases), future fluctuations with regard to age and period of
service, and experience with the probability of occurrence
of pension payments, annuities or lump sums. As a result of
changed market or economic conditions, the probabilities
on which the influencing factors are based, may differ from
current developments. The financial effects of deviations
of the main factors are calculated with the use of sensitivity
analyses. See E Note 22 for further information.
Income taxes
The calculation of income taxes of Daimler AG and its subsid-
iaries is based on the legislation and regulations applicable in
the various countries. Due to their complexity, the tax items
presented in the Consolidated Financial Statements are possi-
bly subject to different interpretation by taxpayers on the one
hand and local tax authorities on the other hand. Different
interpretations can occur especially in connection with the rec-
ognition and measurement of balance sheet items as well as
in connection with the tax assessment of expenses and income.
For the calculation of deferred tax assets, assumptions have
to be made regarding future taxable income and the time of
realization of the deferred tax assets. In this context, Daimler
takes into consideration, among other things, the projected
earnings from business operations, the effects on earnings of
the reversal of taxable temporary differences, and realizable
tax strategies. As future business developments are uncertain
and are sometimes beyond Daimler’s control, the assumptions
to be made in connection with accounting for deferred tax
assets are connected with a substantial degree of uncertainty.
On each balance sheet date, Daimler carries out impairment
tests on deferred tax assets on the basis of the planned taxable
income in future financial years; if Daimler assesses that
the probability of future tax advantages being partially or fully
unrealized is more than 50%, the deferred tax assets are
impaired. Further information is provided in E Note 9.
F.09
Composition of the Group
Consolidated subsidiaries
Germany
International
Unconsolidated subsidiaries
Germany
International
Joint operations accounted for
using proportionate consolidation
Germany
International
Joint operations accounted for
using the equity method
Germany
International
Joint ventures accounted for
using the equity method
Germany
International
Associated companies accounted for
using the equity method
Germany
International
Joint operations,
joint ventures,
associated companies
and material other
investments accounted
for at (amortized) cost
Germany
International
At December 31,
2018
2019
375
65
310
94
39
55
1
–
1
1
–
1
16
3
13
16
4
12
34
13
21
537
376
70
306
126
36
90
1
–
1
3
1
2
16
4
12
16
4
12
32
13
19
570
3. Consolidated Group
Composition of the Group
Table F.09 shows the composition of the Group.
The aggregate totals in the statement of financial position of
the subsidiaries, associated companies, joint ventures and
joint operations accounted for at amortized cost whose business
is non-active or of low volume and which are not material for
the Group and the fair presentation of its profitability, liquidity
and capital resources, and financial position would amount
to approximately 1% of the Group’s total assets; the aggregate
revenues and the aggregate net profit would amount to approx-
imately 1% of the Group’s revenue and net profit.
A detailed list of the companies included in the Consolidated
Financial Statements and of the equity investments of Daimler
Group pursuant to Section 313 of the German Commercial
Code (HGB) is provided in the statement of investments. Further
information is provided in E Note 41.
248 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
New group structure with Daimler AG as parent company
On May 22, 2019, the Annual Shareholders’ Meeting of
Daimler AG resolved to hive down the Mercedes-Benz Cars
and Mercedes-Benz Vans divisions and the Daimler Trucks
and Daimler Buses divisions into legally independent entities.
Upon the hive-downs taking effect, the assets to be hived
down as defined in the hive-down agreement and other assets
and liabilities were transferred to Mercedes-Benz AG and
Daimler Truck AG on the basis of the provisions of the hive-down
agreement. These hive-downs did not affect the consolidated
Group. Outside Germany, business activities were hived down
or transferred to newly founded and in the year 2019 for
the first time consolidated companies in the context of “Project
Future.”
As of January 1, 2020, changes have been made in connection
with the internal management and reporting structure and
thus with the reportable segments. As of that date, the Group’s
activities are divided into the segments Mercedes-Benz
Cars, Mercedes-Benz Vans, Daimler Trucks & Buses and Daimler
Mobility. For external reporting purposes, the Mercedes-Benz
Cars and Mercedes-Benz Vans segments are combined into
the reportable segment Mercedes-Benz Cars & Vans in accor-
dance with the nature of the products and services offered, as
well as the brands, distribution channels and customer profiles.
Structured entities
The structured entities of the Group are rental companies,
asset-backed-securities (ABS) companies and special funds.
The purpose of the rental companies primarily is the acquisi-
tion, renting and management of assets. The ABS companies
are primarily used for the Group’s refinancing. The assets
transferred to structured entities usually result from the Group’s
leasing and sales financing business. Those entities refinance
the purchase price by issuing securities. The special funds are
set up in particular in order to diversify the capital investment
strategy.
At the reporting date, the Group has business relationships
with 24 (2018: 18) controlled structured entities, of which
24 (2018: 18) are fully consolidated. In addition, the Group has
relationships with 8 (2018: 7) non-controlled structured entities.
The unconsolidated structured entities are not material for
the Group’s profitability, liquidity and capital resources and
financial position.
Equity-method investments/assets and
liabilities held for sale
In March 2018, the Daimler Group and the BMW Group signed
an agreement to merge their business units for mobility
services. At December 31, 2018, the assets and liabilities held
for sale were presented separately in the Consolidated
Statement of Financial Position. The disposal group’s assets
then amounted to €531 million and its liabilities amounted
to €212 million.
Following approval by the antitrust authorities, the transactions
were completed on January 31, 2019. As a result, 21 consoli-
dated and 24 unconsolidated subsidiaries left the consolidated
group and five operating joint ventures were established. In
the Daimler Mobility segment, those transactions had a positive
impact on other operating income of €718 million. This
resulted in a net cash outflow of €713 million primarily from
capital increases in the joint ventures.
The joint ventures resulting from the transaction are aggregated
under YOUR NOW and are accounted for using the equity
method in the Consolidated Financial Statements. Further infor-
mation is provided in E Note 13.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 249
F.10
Revenue
In millions of euros
2019
Europe
NAFTA
Asia
Other markets
Revenue according to IFRS 15
Other revenue
Total revenue
In millions of euros
2018
Europe
NAFTA
Asia
Other markets
Revenue according to IFRS 15
Other revenue
Total revenue
Mercedes-
Benz Cars
Daimler
Trucks
Mercedes-
Benz Vans
Daimler
Buses
Daimler
Mobility
Total
segments
Recon-
ciliation
Daimler
Group
38,240
19,037
31,018
3,865
92,160
1,717
93,877
10,129
18,982
6,609
3,869
9,818
2,074
821
1,132
39,589
13,845
646
956
40,235
14,801
2,966
228
336
849
4,379
354
4,733
4,606
6,244
145
150
11,145
17,501
28,646
65,759
46,565
38,929
9,865
161,118
21,174
182,292
-4,681
-1,038
-36
-190
-5,945
-3,602
-9,547
61,078
45,527
38,893
9,675
155,173
17,572
172,745
Mercedes-
Benz Cars
Daimler
Trucks
Mercedes-
Benz Vans
Daimler
Buses
Daimler
Mobility
Total
segments
Recon-
ciliation
Daimler
Group
36,902
18,488
30,859
3,950
90,199
2,904
93,103
10,775
16,622
6,503
3,661
37,561
712
38,273
8,937
1,666
844
1,130
12,577
1,049
13,626
2,851
255
227
777
4,110
419
4,529
4,269
5,366
230
203
10,068
16,201
26,269
63,734
42,397
38,663
9,721
154,515
21,285
175,800
-3,810
-903
-19
-187
-4,919
-3,519
-8,438
59,924
41,494
38,644
9,534
149,596
17,766
167,362
4. Revenue
Revenue disclosed in the Consolidated Statement of Income
includes revenue from contracts with customers and other
revenue not in the scope of IFRS 15.
Revenue from contracts with customers (revenue according to
IFRS 15) is disaggregated by the two categories – type of
products and services and geographical region – and presented
in table F.10. The category type of products and services
corresponds to the reportable segments.
Other revenue primarily comprises revenue from the rental
and leasing business of €12,747 million (2018: €12,085 million),
interest from the financial services business at Daimler Mobility
in an amount of €5,811 million (2018: €5,188 million) and effects
from currency hedging. The interest from financial services
business includes finance income on the net investment in
leases of €1,519 million (2018: €1,242 million).
Revenue according to IFRS 15 includes revenue that was included
in contract liabilities at December 31, 2018 in an amount of
€3,775 million (2018: €3,583 million) and revenue from per-
formance obligations fully (or partially) satisfied in previous
periods in an amount of €309 million (2018: €434 million).
Revenue that is expected to be recognized within three years
related to performance obligations that are unsatisfied (or
partially unsatisfied) amounted to €8,701 million at December 31,
2019 (2018: €7,642 million). This revenue is mainly derived
from long-term service and maintenance contracts and extended
warranties. It does not include performance obligations from
customer contracts that have initial expected durations of one
year or less. Long-term performance obligations of minor
importance to the overall contract value of a bundled contract
are not considered in assessing the initial duration of the
bundled contract.
Revenue by segment F.91 and region F.93 is presented in
tables in E Note 34.
250 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.11
Cost of sales
In millions of euros
Expense of goods sold
Depreciation of equipment
on operating leases
Refinancing costs at Daimler Mobility
Impairment losses on
receivables from financial services
Other cost of sales
F.12
Average number of employees
Mercedes-Benz Cars1, 2
Daimler Trucks2
Mercedes-Benz Vans2
Daimler Buses2
Daimler Mobility
Other2
2019
2018
-123,180
-117,508
-9,047
-3,114
-495
-7,744
-8,567
-2,747
-382
-5,091
-143,580
-134,295
2019
2018
153,753
153,413
84,392
21,796
17,808
12,811
11,279
80,720
21,925
17,477
13,739
11,191
301,839
298,465
1 Proportionally including 2,126 (2018: 1,856) employees from
a proportionately consolidated company.
2 Adjustment of the number of employees in 2018 due to the
changed intercompany allocation of employees.
F.13
Other operating income
In millions of euros
Income from costs recharged to
third parties
Government grants and subsidies
Gains on sales of property,
plant and equipment
Rental income
not relating to sales financing
Income from company transactions
at consolidated companies
Other miscellaneous income
2019
2018
840
122
75
173
729
898
2,837
821
102
140
159
11
1,097
2,330
5. Functional costs
Cost of sales
Items included in cost of sales are shown in table F.11.
Amortization expense of capitalized development costs in
the amount of €1,793 million (2018: €1,538 million) is presented
in expense of goods sold.
In 2019, a reassessment of risks relating to ongoing govern-
mental and legal proceedings and measures taken with regard
to Mercedes-Benz diesel vehicles in various regions and
markets as well as expenses in connection with an updated risk
assessment for an expanded recall of vehicles with Takata
airbags adversely affected cost of sales at the Mercedes-Benz
Cars and Mercedes-Benz Vans segments. Cost of sales also
includes expenses in connection with a review and prioritization
of the product portfolio at the Mercedes-Benz Vans segment.
The expenses from the review and prioritization of the product
portfolio are related to the planned discontinuation of pro-
duction of the X-Class at the end of May 2020.
Selling expenses
In 2019, selling expenses amounted to €12,801 million (2018:
€13,067 million). Selling expenses consist of direct selling
costs as well as selling overhead expenses and comprise per-
sonnel expenses, material costs and other selling costs.
General administrative expenses
General administrative expenses amounted to €4,050 million
in 2019 (2018: €4,036 million). They consist of expenses which
are not attributable to production, sales or research and
development functions, and comprise personnel expenses,
depreciation and amortization of fixed and intangible assets,
and other administrative costs.
Research and non-capitalized development costs
Research and non-capitalized development costs were
€6,586 million in 2019 (2018: €6,581 million) and primarily
comprise personnel expenses and material costs.
Personnel expenses and average number of employees
Personnel expenses included in the Consolidated Statement of
Income amounted to €22,657 million in 2019 (2018:
€22,432 million). The personnel expenses comprise wages and
salaries in the amount of €18,336 million (2018: €18,329 million),
social contributions in the amount of €3,536 million (2018:
€3,332 million) and expenses from pension obligations in the
amount of €785 million (2018: €771 million). The average
numbers of people employed are shown in table F.12.
Information on the total remuneration in 2019 of the members
of the Board of Management and the Supervisory Board who
were active in 2019 is provided in E Note 38.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 251
6. Other operating income and expense
The composition of other operating income is shown in table
F.13.
Income from costs recharged to third parties includes income
from licenses and patents, shipping costs and other costs
charged to third parties, with related expenses primarily within
the functional costs.
Income from corporate transactions at consolidated companies
primarily comprises income of €718 million resulting from
the merger of the business units for mobility services of Daimler
Group and BMW Group in the year 2019. See E Note 3 for
further information.
Government grants and subsidies mainly comprise reimburse-
ments relating to current early retirement part-time contracts
and subsidies for alternative drive systems. In the year 2018,
other miscellaneous income included insurance compensation
of €219 million.
The composition of other operating expense is shown in table
F.14.
Other miscellaneous expense primarily comprises changes in
provisions for other risks. Compared with the prior year, it
includes higher expenses in connection with ongoing govern-
mental and legal proceedings and measures taken in the
segments Mercedes-Benz Cars and Mercedes-Benz Vans relat-
ing to Mercedes-Benz diesel vehicles in various regions
and markets.
7. Other financial income/expense, net
Table F.15 shows the components of other financial income/
expense, net.
In 2019, the measurement at fair value of the minority interest
in Aston Martin Lagonda Global Holdings plc resulted in an
expense of €72 million (2018: income of €111 million). After the
initial public offering, which took place at the beginning of
October 2018, the interest was measured at the current stock-
market price of the shares. The expense/income are included
in miscellaneous other financial income/expense, net and have
been assigned to the segment results of Mercedes-Benz Cars.
8. Interest income and interest expense
Table F.16 shows the components of interest income and
interest expense.
9. Income taxes
Profit before income taxes is comprised as shown in table
F.17.
F.14
Other operating expense
In millions of euros
Losses on sales of property,
plant and equipment
Other miscellaneous expense
F.15
Other financial income/expense, net
In millions of euros
Income and expense from
compounding and effects from
changes in discount rates of
provisions for other risks
Miscellaneous other financial income/
expense, net
F.16
Interest income and interest expense
In millions of euros
Interest income
Net interest income on the net assets of
defined benefit pension plans
Interest and similar income
Interest expense
Net interest expense on the net obligation
from defined benefit pension plans
Interest and similar expense
F.17
Profit before income taxes
In millions of euros
German companies
Non-German companies
2019
2018
-180
-4,289
-4,469
-106
-1,356
-1,462
2019
2018
-238
-24
-262
-31
241
210
2019
2018
4
393
397
-197
-683
-880
3
268
271
-133
-660
-793
2019
2018
-4,113
7,943
3,830
2,932
7,663
10,595
252 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.18
Components of income taxes
In millions of euros
Current taxes
German companies
Non-German companies
Deferred taxes
German companies
Non-German companies
F.19
Components of deferred tax expense
In millions of euros
Deferred taxes
due to temporary differences
due to tax loss carryforwards
and tax credits
Profit before income taxes in Germany includes profit/loss
on equity-method investments if the equity interests in those
companies are held by German companies.
2019
2018
Table F.18 shows the components of income taxes.
-51
-2,331
1,127
134
-1,121
-1,116
-1,127
125
-895
-3,013
2019
2018
The current tax expense includes tax benefits recognized for
prior periods at German and foreign companies of €244 million
(2018: €529 million).
The deferred tax expense/benefit is comprised of the
components shown in table F.19.
For German companies, in 2019 and 2018, deferred taxes were
calculated using a federal corporate income tax rate of 15%,
a solidarity tax surcharge of 5.5% on each year’s federal corpo-
rate income taxes, and a trade tax rate of 14%. In total, the
tax rate applied for the calculation of German deferred taxes in
both years amounted to 29.825%. For non-German companies,
the deferred taxes at period-end were calculated using the tax
rates of the respective countries.
1,261
-56
1,317
-770
-510
-260
Table F.20 shows a reconciliation of expected income
tax expense to actual income tax expense determined using
the unchanged applicable German combined statutory tax
rate of 29.825%.
F.20
Reconciliation of expected income tax expense
to actual income tax expense
In millions of euros
2019
2018
Expected income tax expense
-1,142
-3,160
Foreign tax rate differential
Trade tax rate differential
Tax law changes
Change of valuation allowance on
deferred tax assets
Tax-free income and
non-deductible expenses
Other
347
41
-42
-209
21
-137
326
37
11
-101
14
-140
Actual income tax expense
-1,121
-3,013
F.21
Deferred tax assets and liabilities
In millions of euros
Deferred tax assets
Deferred tax liabilities
Deferred tax assets, net
At December 31,
2018
2019
5,803
-3,935
1,868
4,021
-3,762
259
The Group impaired deferred tax assets in 2019 and 2018.
The resulting tax expenses are included in the line item change
of valuation allowance on deferred tax assets.
Tax-free income and non-deductible expenses include all other
effects at foreign and German companies relating to tax-free
income and non-deductible expenses, for instance tax-free gains
included in net periodic pension costs at the German com-
panies and tax-free results of the equity-method investments.
Deferred tax assets and deferred tax liabilities are offset if
the deferred tax assets and liabilities relate to income taxes
levied by the same taxation authority and if there is the right to
set off current tax assets against current tax liabilities. In the
presentation of deferred tax assets and liabilities in the Consol-
idated Statement of Financial Position, no difference is made
between current and non-current. In the Consolidated State-
ment of Financial Position, deferred tax assets and liabilities
are presented as shown in table F.21.
In respect of each type of temporary difference and in
respect of each type of unutilized tax loss carryforwards and
unutilized tax credits, the deferred tax assets and liabilities
before offset are summarized in table F.22.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 253
F.22
Split of deferred tax assets and liabilities before offset
In millions of euros
Intangible assets
Property, plant and equipment
Equipment on operating leases
Inventories
Receivables from financial services
Miscellaneous assets, mainly other
financial assets
Tax loss carryforwards and
unused tax credits
Provisions for pensions and
similar obligations
Other provisions
Liabilities
Deferred income
Miscellaneous liabilities
Valuation allowances
thereof on temporary differences
thereof on tax loss carryforwards and
tax credits
Deferred tax assets, gross
Development costs
Other intangible assets
Property, plant and equipment
Equipment on operating leases
Inventories
Receivables from financial services
Miscellaneous assets
Provisions for pensions and
similar obligations
Other provisions
Miscellaneous liabilities
Deferred tax liabilities, gross
Deferred tax assets, net
At December 31,
2018
2019
60
239
1,990
999
356
30
154
1,808
1,017
341
5,231
4,837
3,110
1,538
673
1,851
3,564
809
20
18,902
-2,075
-743
-1,332
16,827
-3,718
-129
-2,879
-5,220
-58
-939
-361
592
1,692
2,092
1,084
2
15,187
-1,299
-213
-1,086
13,888
-3,352
-115
-1,757
-5,092
-78
-793
-321
-1,044
-1,572
-222
-389
-233
-316
-14,959
-13,629
1,868
259
The development of deferred tax assets, net, is shown in table
F.23.
Including the items recognized in other comprehensive income/
loss (including items from equity-method investments),
the expense for income taxes is comprised as shown in table
F.24.
In the Consolidated Statement of Financial Position, the valuation
allowances on deferred tax assets increased by €776 million
compared to December 31, 2018. This is partially a result of
the additional valuation allowances of €209 million recognized
in net profit. Furthermore, valuation allowances of €530 million
were recognized without an impact on net profit for deferred
tax assets recognized in other comprehensive income/loss in
2019 and prior years. Additionally, the valuation allowance
changed without an impact on net profit, among other things due
to currency translation, tax rate changes in a few countries
and adjustments of prior year tax loss carryforwards.
At December 31, 2019, the valuation allowance on deferred tax
assets relates, among other things, to corporate income
tax loss carryforwards (€926 million). €3 million of the deferred
tax assets for corporate income tax loss carryforwards
adjusted by a valuation allowance relates to tax loss carryfor-
wards which expire in 2020, €177 million relates to tax loss
carryforwards which expire at various dates from 2021 through
2024, €47 million relates to tax loss carryforwards which
expire at various dates from 2025 through 2029, €8 million
relates to tax loss carryforwards which expire later than 2035 and
€691 million relates to tax loss carryforwards which can be
carried forward indefinitely. Valuation allowances of €64 million
relate to tax loss carryforwards with regard to capital losses
which can be carried forward indefinitely. With regard to trade
tax loss carryforwards in Germany, valuation allowances of
€190 million relate to loss carryforwards which can be carried
forward indefinitely. Furthermore, a large proportion of the
valuation allowances relates to temporary differences as well
as loss carryforwards for state and local taxes at the US-
companies. Daimler believes that it is more likely than not that
it will not be able to utilize those deferred tax assets or cannot
reliably document that sufficient future taxable income will
be available against which the deductible temporary differences,
tax loss carryforwards and tax credits can be offset. As the
probability of more than 50% required by IAS 12 is therefore not
fulfilled, valuation allowances were recognized on deferred
tax assets also in countries with tax loss carryforwards that can
be carried forward indefinitely.
The Group had tax losses at the German tax group in 2019 and
at several subsidiaries in several countries in 2019 and prior
years. After offsetting the deferred tax assets with deferred tax
liabilities, the deferred tax assets not subject to valuation
allowances amounted to €2,169 million for those entities.
Daimler believes it is more likely than not that future taxable
income will be sufficient to allow utilization of these deferred
tax assets. Daimler’s current estimate of the amount of
deferred tax assets that is considered realizable may change in
the future, necessitating higher or lower valuation allowances.
254 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.23
Change of deferred tax assets, net
In millions of euros
Deferred tax assets, net
as of January 1
Deferred tax expense/benefit in the
Consolidated Statement of Income
Change of deferred tax
assets/liabilities on equity instruments/
debt instruments included in other
comprehensive income/loss
Change of deferred tax
assets/liabilities on derivative
financial instruments included
in other comprehensive income/loss
Change of deferred tax
assets/liabilities on actuarial
gains/losses from defined benefit
pension plans included
in other comprehensive income/loss
Other changes1
Deferred tax assets, net
as of December 31
2019
2018
259
1,261
497
-770
3
21
186
537
232
-73
1,868
171
-197
259
1 The other changes primarily relate to effects from currency
translation.
As of today, the retained earnings of non-German subsidiaries
are largely intended to be reinvested in those operations.
The Group did not recognize deferred tax liabilities on retained
earnings of non-German subsidiaries of €29,988 million (2018:
€28,514 million) which are intended to be reinvested. If those
earnings were paid out as dividends, an amount of 5% would be
taxed under German taxation rules and, if applicable, with
non-German withholding tax. Additionally, income tax conse-
quences might arise if the dividends first have to be distributed
by a non-German subsidiary to a non-German holding com-
pany. Normally, the distribution would lead to an additional
income tax expense. It is not practicable to estimate the
amount of taxable temporary differences for these undistrib-
uted foreign earnings.
The Group has various unresolved issues concerning open
income tax years with the tax authorities in a number of
jurisdictions. Daimler believes that it has recognized adequate
liabilities for any future income taxes that may be owed for
all open tax years. Nevertheless, it cannot be ruled out that tax
payments might exceed the liabilities recognized in the finan-
cial statements.
As a result of future adjudications or changes in the opinions of
the fiscal authorities, it cannot be ruled out that Daimler might
receive tax refunds for previous years.
F.24
Tax expense in equity
In millions of euros
10. Intangible assets
2019
2018
Intangible assets developed as shown in table F.25.
Income tax expense in the Consolidated
Statement of Income
-1,121
-3,013
Income tax
expense/benefit recorded
in other reserves
421
-700
728
-2,285
At December 31, 2019, goodwill of €541 million (2018:
€418 million) relates to the Daimler Trucks segment, goodwill
of €433 million (2018: €433 million) relates to the Daimler
Mobility segment and goodwill of €177 million (2018: €168 mil-
lion) relates to the Mercedes-Benz Cars segment.
Non-amortizable intangible assets primarily relate to goodwill
and development costs for projects which have not yet
been completed (carrying amount at December 31, 2019:
€5,634 million; 2018: €4,029 million). In addition, other intan-
gible assets with a carrying amount of €273 million (2018:
€270 million) are not amortizable. These non-amortizable intan-
gible assets are distribution rights in the vehicle segments
with indefinite useful lives as well as trademarks in the Daimler
Trucks segment with indefinite useful lives. The Group plans
to continue to use these assets unchanged.
Table F.26 shows the line items of the Consolidated
Statement of Income in which total amortization expense for
intangible assets is included.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 255
F.25
Intangible assets
In millions of euros
Acquisition/manufacturing costs
Balance at January 1, 2018
Additions due to business combinations
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2018
Additions due to business combinations
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2019
Depreciation/impairment
Balance at January 1, 2018
Additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2018
Additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2019
Carrying amount at December 31, 2018
Carrying amount at December 31, 2019
Goodwill
(acquired)
Development
costs (internally
generated)2
Other
intangible
assets
(acquired)
1,386
–
1
–
–
-31
1,356
117
–
–
–
20
1,493
271
–
–
–
3
274
–
–
–
2
276
1,082
1,217
16,192
–
2,535
–
-282
6
18,451
–
3,083
–
-1,386
6
20,154
5,912
1,553
–
-277
6
7,194
1,809
–
-1,379
5
7,629
11,257
12,525
4,619
–
640
–
-432
57
4,884
66
560
–
-790
45
4,765
2,279
476
–
-373
40
2,422
588
–
-512
31
2,529
2,462
2,236
Total
22,197
–
3,176
–
-714
32
24,691
183
3,643
–
-2,176
71
26,412
8,462
2,029
–
-650
49
9,890
2,397
–
-1,891
38
10,434
14,801
15,978
1 Primarily changes from currency translation.
2 Including capitalized borrowing costs on development costs of €31 million (2018: €41 million).
Amortization amounted to €16 million (2018: €15 million).
F.26
Amortization expense for intangible assets in the
Consolidated Statement of Income
In millions of euros
Cost of sales
Selling expenses
General administrative expenses
Research and non-capitalized
development costs
Other operating expense
2019
2018
2,258
1,820
50
56
32
1
85
57
66
1
2,397
2,029
256 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. Property, plant and equipment
Property, plant and equipment as shown on the Consolidated
Statement of Financial Position with a carrying amount of
€37,143 million also includes right-of-use assets from lessee
accounting.
Property, plant and equipment, excluding right-of-use assets,
developed as shown in table F.27.
In 2019, government grants of €52 million (2018: €51 million)
were deducted from property, plant and equipment.
At December 31, 2018 property, plant and equipment also
included leased buildings, technical equipment and other
equipment with a total carrying amount of €335 million, which
were assigned to the Group as economic owner due to the
design of the underlying leasing contracts (so called finance
leases). Additions to and depreciation of the leased equipment
in the year 2018 amounted to €17 million and €33 million
respectively.
F.27
Property, plant and equipment
(excluding right-of-use assets)
In millions of euros
Acquisition or manufacturing costs
Balance at January 1, 2018
Additions due to business acquisitions
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2018
Additions due to business acquisitions
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2019
Depreciation/impairment
Balance at January 1, 2018
Additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2018
Additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2019
Carrying amount at December 31, 2018
Carrying amount at December 31, 2019
1 Primarily changes from currency translation.
Land, leasehold
improvements and
buildings including
buildings on land
owned by others
Technical
equipment and
machinery
Other
equipment,
factory and
office equipment
Advance payments
relating to plant
and equipment
and construction
in progress
16,987
25,964
27,398
–
309
612
-336
84
17,656
–
626
1,159
-124
-377
18,940
8,743
385
1
-175
-39
8,915
402
–
-69
-167
9,081
8,741
9,859
–
888
988
-634
-30
27,176
–
1,096
1,379
-1,029
61
28,683
16,630
1,633
-12
-558
-18
17,675
1,750
-3
-902
50
–
1,932
1,536
-661
172
30,377
–
1,992
1,479
-881
105
33,072
21,465
2,273
11
-540
129
23,338
2,540
3
-745
72
18,570
25,208
4,470
–
4,341
-3,136
-104
96
5,667
–
3,517
-3,999
-170
58
5,073
–
–
–
–
–
–
–
–
–
–
–
9,501
10,113
7,039
7,864
5,667
5,073
Total
74,819
–
7,470
–
-1,735
322
80,876
–
7,231
18
-2,204
-153
85,768
46,838
4,291
–
-1,273
72
49,928
4,692
–
-1,716
-45
52,859
30,948
32,909
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 257
Table F.28 shows the composition of the right-of-use assets
which are accounted for at January 1, 2019. The right-of-use
assets include finance leases, which were shown in property,
plant and equipment at December 31, 2018.
The tables F.29, F.30and F.31 show additional
disclosures related to lessee accounting.
Further information on lessee accounting is provided in
E Notes 1, 24 and 33.
F.28
Right-of-use assets
In millions of euros
Land, leasehold improvements
and buildings
Technical equipment and machinery
Other equipment, factory and
office equipment
F.29
Additions and depreciations for right-of-use assets
In millions of euros
Additions to right-of-use assets
Depreciation for
Land, leasehold improvements
and buildings
Technical equipment and machinery
Other equipment, factory and
office equipment
F.30
Expenses related to lessee accounting
In millions of euros
Interest expense from lease transactions
Expenses from short-term leases
Expenses from leases of low-value assets
Expenses from variable lease payments
F.31
Cash outflows related to lessee accounting
In millions of euros
Total cash outflow for lease contracts
Future cash outflows that are not reflected
in the lease liabilities
December 31,
2019
3,956
187
91
4,234
2019
1,075
621
17
40
678
2019
98
82
16
47
2019
890
1,637
258 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. Equipment on operating leases
The development of equipment on operating leases is shown
in table F.32.
At December 31, 2019, equipment on operating leases with a
carrying amount of €10,874 million were pledged as security
for liabilities from ABS transactions related to a securitization
transaction of future lease payments on leased vehicles
(December 31, 2018: €9,804 million) (see also E Note 24).
Leasing payments
Non-cancelable future lease payments to Daimler for equip-
ment on operating leases are due as presented in table F.33
at December 31, 2019, under IFRS 16. Comparison amounts
at December 31, 2018, under IAS 17 are shown in table F.34.
F.32
Equipment on operating leases
In millions of euros
Acquisition or manufacturing costs
Balance at January 1, 2018
Additions due to business acquisitions
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2018
Additions due to business acquisitions
Other additions
Reclassifications
Disposals
Other changes1
Balance at December 31, 2019
Depreciation/impairment
Balance at January 1, 2018
Additions2
Reclassifications
Disposals
Other changes1
Balance at December 31, 2018
Additions2
Reclassifications
Disposals
Other changes1
Balance at December 31, 2019
Carrying amount at December 31, 2018
Carrying amount at December 31, 2019
58,798
–
24,854
–
-21,101
980
63,531
–
26,759
–
-24,824
906
66,372
11,724
8,567
–
-6,431
195
14,055
9,047
–
-8,353
141
14,890
49,476
51,482
1 Primarily changes from currency translation.
2 Comprises impairments of €60 million in 2019 (2018: €133 million).
F.33
Maturity of undiscounted lease payments for equipment
on operating leases (according to IFRS 16)
In millions of euros
Mature in year
2020
2021
2022
2023
2024
2025 and later
At December 31,
2019
8,353
6,529
2,656
931
235
73
18,777
F.34
Maturity of minimum lease payments for
equipment on operating leases (according to IAS 17)
In millions of euros
Maturity
within one year
between one and five years
later than five years
At December 31,
2018
8,376
9,898
62
18,336
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 259
13. Equity-method investments
Table F.35 shows the carrying amounts and profits/losses
from equity-method investments.
Table F.36 presents key figures on interests in associ-
ated companies accounted for using the equity method in the
Group’s Consolidated Financial Statements.
Table F.37 presents key figures on interests in joint
ventures accounted for using the equity method in the
Group’s Consolidated Financial Statements.
F.35
Summarized carrying amounts and profits/losses from equity-method investments
In millions of euros
At December 31, 2019
Equity investment¹
Equity result¹
At December 31, 2018
Equity investment¹
Equity result¹
1 Including investor-level adjustments.
Associated
companies
4,349
1,240
4,230
1,050
Joint ventures
Joint operations
Total
1,582
-778
604
-397
18
17
26
3
5,949
479
4,860
656
F.36
Key figures on interests in associated companies accounted for using the equity method
In millions of euros
At December 31, 2019
Equity interest (in %)
Stock market price¹
Equity investment²
Equity result²
Dividend payment to Daimler⁴
At December 31, 2018
Equity interest (in %)
Stock market price¹
Equity investment²
Equity result²
Dividend payment to Daimler⁵
BBAC
BAIC Motor3
THBV
(HERE)
Others
Total
49.0
–
2,519
1,295
1,137
49.0
–
2,353
1,247
1,024
9.6
387
665
40
19
9.6
353
650
-107
10
29.7
–
475
-114
–
29.6
–
522
-101
–
690
19
705
11
4,349
1,240
4,230
1,050
1 Proportionate stock market prices.
2 Including investor-level adjustments.
3 The proportionate share of earnings of BAIC Motor Corporation Ltd. (BAIC Motor) is included in Daimler’s Consolidated Financial Statements
with a three-month time lag.
4 The dividend from BBAC of €1,137 million was paid out in the year 2019. The payment was €1,131 million.
5 The dividend from BBAC of €1,024 million was partly paid out in the year 2018 with an amount of €930 million.
260 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.37
Key figures on interests in joint ventures accounted for using the equity method
In millions of euros
At December 31, 2019
Equity interest (in %)
Stock market price
Equity investment¹
Equity result¹
Dividend payment to Daimler
At December 31, 2018
Equity interest (in %)
Stock market price
Equity investment¹
Equity result¹
Dividend payment to Daimler
YOUR NOW²
Others
Total
50.0
–
866
-818
–
–
–
–
–
–
716
40
604
-397
1,582
-778
604
-397
1 Including investor-level adjustments.
2 The proportionate share of earnings of the YOUR NOW joint ventures is included in Daimler’s Consolidated Financial Statements with a one-month
time lag. The figures relate to the period of February 1 to November 30.
BBAC
Beijing Benz Automotive Co., Ltd. (BBAC) produces and distrib-
utes Mercedes-Benz passenger cars and spare parts in China.
The investment and the proportionate share in the results
of BBAC are allocated to the Mercedes-Benz Cars segment.
In the second quarter of 2019, the shareholders of BBAC
approved the payout of a dividend for the 2018 financial year.
The amount of €1,137 million attributable to Daimler reduced
the carrying amount of the investment accordingly. The
first part of the dividend was paid in the third quarter of 2019
and led to a cash inflow of €565 million. The remaining part
of the dividend was paid in the fourth quarter of 2019 and led
to a cash inflow of €566 million.
Daimler plans to contribute additional equity of in total
€0.5 billion in accordance with its shareholding ratio in the
years 2020 to 2022.
BAIC Motor
BAIC Motor Corporation Ltd. (BAIC Motor) is the passenger
car division of BAIC Group, one of the leading automotive com-
panies in China. Directly or via subsidiaries, BAIC Motor is
engaged in the business of researching, developing, manufac-
turing, selling, marketing and servicing automotive vehicles
and related parts and components and all related services.
Due to Daimler’s representation on the board of directors of
BAIC Motor and other contractual arrangements, Daimler
classifies this investment as an investment in an associate, to
be accounted for using the equity method; in the segment
reporting, the investment’s carrying amount and its proportion-
ate share of profit or loss are presented in the reconciliation
of total segment’s assets to Group assets and total segments’
EBIT to Group EBIT, respectively.
As a result of the significantly reduced stock-exchange price
of shares in BAIC Motor in 2018, Daimler assessed if there was
any objective indication of an impairment of its investment in
BAIC Motor. This assessment did indicate a need for an impair-
ment in the amount of €150 million in the fourth quarter
of 2018. The loss is included in the line item profit/loss on
equity-method investments, net.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 261
Because of the similarity of the business models, the joint ven-
ture companies were already managed in combination and
therefore reported on jointly in the interim financial statements
in 2019. The investment in the joint ventures merged into
YOUR NOW is included in the Consolidated Financial Statements
as joint ventures accounted for using the equity method with
a one-month time lag and is allocated to the Daimler Mobility
segment.
Table F.39 shows summarized IFRS financial information
after purchase price allocation for the significant joint ventures
which were the basis for equity-method accounting in the
Group’s Consolidated Financial Statements.
Other minor equity-method investments
In the second quarter of 2018, the result of joint ventures
accounted for using the equity method includes an expense of
€418 million for Toll Collect, primarily related to the settlement
of the arbitration proceedings. The expense is allocated to the
Daimler Mobility segment. Further information is provided
in E Note 30.
Table F.40 shows summarized aggregated financial infor-
mation for the other minor equity-method investments after
purchase price allocation and on a pro rata basis.
Further information on equity-method investments is provided
in E Notes 3 and 37.
THBV (HERE)
There Holding B.V. (THBV) holds an interest in HERE Interna-
tional B.V. (HERE). HERE is one of the biggest manufacturers of
digital roadmaps for navigation systems worldwide. Future
expected high-resolution maps will be one of the fundamentals
for future autonomous driving. THBV is accounted for in the
Consolidated Financial Statements of Daimler AG as an associ-
ated company using the equity method, and is allocated to
the Mercedes-Benz Cars segment.
THBV carried out a capital increase in the first quarter of 2019.
Daimler participated in the capital increase with a total of
€69 million, whereby the equity interest attributable to Daimler
increased by 0.1% to 29.7%. The capital contribution increased
the carrying amount of the investment accordingly.
Table F.38 shows summarized IFRS financial information
after purchase price allocation for the significant associated
companies, which were the basis for equity-method account-
ing in the Group’s Consolidated Financial Statements.
YOUR NOW
In March 2018, Daimler Group and BMW Group signed an
agreement for the merger of their business units for mobility
services, with the goal of offering customers a comprehensive
mobility ecosystem that is intelligent, seamlessly connected
and available at the touch of a fingertip.
After being approved by the antitrust authorities in December
2018, the transaction was completed on January 31, 2019.
The existing services for on-demand mobility in the fields of
car sharing, ride hailing, parking, charging and the multimodal
mobility platform were combined in five joint ventures,
(REACH NOW (platform for on-demand mobility and multimodal-
ity), CHARGE NOW (charging), FREE NOW (ride hailing),
PARK NOW (parking) and SHARE NOW (car sharing)), which are
equally held by Daimler Group and BMW Group and will be
strategically expanded in the future. Further information is pro-
vided in E Note 3.
In the year 2019, an impairment loss of €261 million on joint
ventures is included, mainly resulting from the adjustment of
earnings forecasts for individual mobility services.
At the end of the year 2019, the joint ventures were merged by
way of contribution to YOUR NOW Holding GmbH (YOUR NOW),
whose shares are also equally held by Daimler Group and BMW
Group. The contribution had no effect on earnings.
262 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.38
Summarized IFRS financial information on significant associated companies
accounted for using the equity method
2019
BBAC¹
2018
BAIC Motor²
2019
2018
2019
In millions of euros
Information on the statement of income
Revenue
Profit/loss from continuing operations after taxes
Profit/loss from discontinued operations after taxes
Other comprehensive income/loss
Total comprehensive income/loss
Information on the statement of financial position and
reconciliation to equity-method carrying amounts
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Equity (including non-controlling interests)
Equity (excluding non-controlling interests) attributable to the Group
Unrealized profit (-)/loss (+) on sales to/purchases from
Other reconciling items including equity-method goodwill and
impairments on the investment
Carrying amount of equity-method investment
1 BBAC:
20,177
2,702
17,433
2,570
–
-7
–
7
2,695
2,577
6,272
8,874
1,008
8,716
5,422
2,657
-137
–1
2,519
5,458
7,156
967
6,625
5,022
2,461
-107
–1
2,353
22,900
1,739
–
-134
1,605
14,008
13,733
3,194
13,859
10,688
756
-12
–79
665
THBV³
(HERE)
2018
–
-337
–
-7
-344
1,763
2
–
1
20,085
1,802
–
–
–
-383
–
1
1,802
-382
13,825
10,753
3,545
10,663
10,370
738
-8
–80
650
1,131
467
–
1
1,597
1,764
475
522
–
–
–
–
475
522
Figures for the statement of income relate to the period of January 1 to December 31.
Figures for the statement of financial position and the reconciliation to equity-method carrying amounts relate to the balance sheet date December 31.
2 BAIC Motor:
Daimler recognizes its proportionate share of profits or losses of BAIC Motor Corporation Ltd. (BAIC Motor) with a three-month time lag.
Figures for the statement of income relate to the period of October 1 to September 30.
Figures for the statement of financial position and the reconciliation to equity-method carrying amounts relate to the balance sheet date of September
30.
3 THBV:
Figures for the statement of income relate to the period of January 1 to December 31.
Figures for the statement of financial position and the reconciliation to equity-method carrying amounts relate to the balance sheet date December 31.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 263
F.39
Summarized IFRS financial information on significant joint ventures accounted for using the equity method
In millions of euros
Information on the statement of income
Revenue
Depreciation and amortization
Interest income
Interest expense
Income taxes
Profit/loss from continuing operations after taxes
Profit/loss from discontinued operations after taxes
Other comprehensive income/loss
Total comprehensive income/loss
Information on the statement of financial position and reconciliation to equity-method carrying amounts
Non-current assets
Current assets
thereof cash and cash equivalents
Non-current liabilities
thereof non-current financial liabilities
Current liabilities
thereof current financial liabilities
Equity (including non-controlling interests)
Equity (excluding non-controlling interests) attributable to the Group
Unrealized profit (-)/loss (+) on sales to/purchases from
Other reconciling items including equity-method goodwill and impairments on the investment
Carrying amount of equity-method investment
YOUR NOW1
2019
459
-99
–
-9
9
-616
–
13
-603
1,066
1,185
892
400
259
475
3
1,376
680
–
186
866
1 Daimler recognizes its proportionate share of profits or losses of the YOUR NOW joint ventures with a one-month time lag.
Figures for the statement of income relate to the period of February 1 to November 30.
Figures for the statement of financial position and the reconciliation to equity-method carrying amounts relate to the balance sheet date of November 30.
F.40
Summarized aggregated financial information on minor equity-method investments
In millions of euros
Summarized aggregated financial information (pro rata)
Profit/loss from continuing operations after taxes
Profit/loss from discontinued operations after taxes
Other comprehensive income/loss
Total comprehensive income/loss
Associated companies
Joint ventures
2019
2018
2019
2018
-29
–
-13
-42
33
–
-6
27
-90
–
–
-90
1
–
-1
–
264 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Receivables from financial services
Table F.41 shows the components of receivables from
financial services.
Loss allowances
The development of loss allowances for receivables from
financial services due to expected credit losses is shown in
table F.44.
Types of receivables
Receivables from sales financing with customers include
receivables from credit financing for customers who purchased
their vehicle either from a dealer or directly from Daimler.
Receivables from sales financing with dealers represent loans
for floor financing programs for vehicles sold by the Group’s
automotive businesses to dealers or loans for assets purchased
by dealers from third parties, primarily, used vehicles traded
in by dealers’ customers or real estate such as dealers’ show-
rooms.
Receivables from finance lease contracts consist of receiv-
ables from leasing contracts for which all substantial risks and
rewards incidental to the leasing objects are transferred to
the lessee.
All cash flow effects attributable to receivables from financial
services are presented within cash provided by/used for oper-
ating activities in the Consolidated Statement of Cash Flows.
Table F.42 shows the maturities of the future contractual
lease payments and the development of lease payments
to the carrying amounts of receivables from finance lease con-
tracts at December 31, 2019, according to IFRS 16. Compar-
ison amounts at December 31, 2018, under IAS 17 are shown
in table F.43.
In 2019, Daimler recognized a gain of €478 million as the
difference between the additions to receivables from finance
lease contracts and the carrying amounts of the underlying
assets (especially in connection with the delivery of vehicles to
consolidated companies).
The carrying amounts of receivables from financial services
based on modified contracts that are shown in stage 2 and 3,
amounted to €387 million at December 31, 2019 (December 31,
2018: €184 million). In addition, carrying amounts of €314 mil-
lion (December 31, 2018: €127 million) in connection with
contractual modifications were reclassified from stage 2 and 3
into stage 1.
Credit risks
Information on credit risks included in receivables from
financial services is shown in table F.45.
Longer overdue periods regularly lead to higher allowances.
At the beginning of the contracts, collaterals of usually at
least 100% of the carrying amounts were agreed, which are
backed by the vehicles based on the underlying contracts.
Over the contract terms, the amounts of the collaterals are
included in the calculation of the risk provisioning, so the
carrying amounts of the credit impaired contracts are primarily
backed by the underlying vehicles.
Further information on financial risks and nature of risks is
provided in E Note 33.
At December 31, 2019, receivables from financial services
with a carrying amount of €8,941 million (December 31, 2018:
€8,106 million) were pledged as collateral for liabilities from
ABS transactions (see also E Note 24).
F.41
Receivables from financial services
In millions of euros
Sales financing with customers
Sales financing with dealers
Finance lease contracts
Gross carrying amount
Loss allowances
Net carrying amount
Current
At December 31, 2019
Total
Non-current
Current
At December 31, 2018
Total
Non-current
18,963
21,016
11,461
51,440
-659
50,781
30,627
3,573
19,329
53,529
-649
49,590
24,589
30,790
104,969
-1,308
52,880
103,661
18,452
18,549
8,976
45,977
-537
45,440
30,029
3,782
18,038
51,849
-549
51,300
48,481
22,331
27,014
97,826
-1,086
96,740
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 265
F.42
Development of the finance lease contracts
(according to IFRS 16)
In millions of euros
Contractual future lease payments
thereof due in the year
2020
2021
2022
2023
2024
2025 and later
Unguaranteed residual values
Gross investment
Unearned finance income
Gross carrying amount
Loss allowances
Net carrying amount
At December 31,
2019
30,807
12,021
8,869
4,821
3,338
1,156
602
3,049
33,856
-3,066
30,790
-456
30,334
F.43
Maturities of the finance lease contracts (according to IAS 17)
In millions of euros
Contractual future lease payments
Unguaranteed residual values
Gross investment
Unearned finance income
Gross carrying amount
Loss allowances
Net carrying amount
< 1 year
9,389
704
10,093
-1,117
8,976
-140
8,836
1 year up to
5 years
At December 31, 2018
> 5 years
Total
16,583
2,716
19,299
-1,672
17,627
-212
17,415
437
14
451
-40
411
-2
409
26,409
3,434
29,843
-2,829
27,014
-354
26,660
266 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.44
Development of loss allowances for receivables from financial services due to expected credit losses
12-month expected credit loss
Lifetime expected credit loss
Total
In millions of euros
Balance at January 1, 2018
Additions
Change in remeasurement
Utilization
Reversals
Change in models/risk parameters
Transfer to stage 1
Transfer to stage 2
Transfer to stage 3
Currency translation and other changes
Balance at December 31, 2018
Additions
Change in remeasurement
Utilization
Reversals
Change in models/risk parameters
Transfer to stage 1
Transfer to stage 2
Transfer to stage 3
Currency translation and other changes
Balance at December 31, 2019
not credit
impaired
(Stage 2)
credit
impaired
(Stage 3)
(Stage 1)
361
197
-25
-33
-160
–
73
-28
-4
8
389
204
11
-4
-179
–
72
-28
-6
3
462
152
59
148
-17
-122
–
-47
51
-30
1
195
60
81
-19
-72
–
-51
57
-35
3
219
413
130
237
-116
-160
–
-26
-23
34
13
502
228
241
-136
-199
–
-21
-29
41
–
627
926
386
360
-166
-442
–
–
–
–
22
1,086
492
333
-159
-450
–
–
–
–
6
1,308
F.45
Credit risks included in receivables from financial services
12-month expected credit loss
Lifetime expected credit loss
Total
In millions of euros
At December 31, 2019
Gross carrying amount
thereof
not past due
past due 30 days and less
past due 31 to 60 days
past due 61 to 90 days
past due 91 to 180 days
past due more than 180 days
At December 31, 2018
Gross carrying amount
thereof
not past due
past due 30 days and less
past due 31 to 60 days
past due 61 to 90 days
past due 91 to 180 days
past due more than 180 days
not credit
impaired
(Stage 2)
credit
impaired
(Stage 3)
5,558
3,902
799
639
216
2
–
5,798
4,295
819
448
232
4
–
1,854
104,969
346
117
104
71
561
655
1,274
405
44
121
84
209
411
100,872
1,846
745
288
563
655
97,826
94,667
1,633
577
319
216
414
(Stage 1
97,557
96,624
930
2
1
–
–
90,754
89,967
770
8
3
3
3
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 267
15. Marketable debt securities and similar
investments
The marketable debt securities and similar investments with a
carrying amount of €8,655 million (2018: €9,577 million) are
part of the Group’s liquidity management and comprise financial
instruments recognized at fair value through other compre-
hensive income, fair value through profit and loss or recognized
at amortized cost.
When a short-term liquidity requirement is covered with
quoted securities, those securities are presented as current
assets.
Other financial assets recognized at fair value through profit or
loss relate exclusively to derivative financial instruments which
are not used in hedge accounting.
At December 31, 2019, receivables with a carrying amount of
€464 million (2018: €511 million) were pledged as collateral for
liabilities (see also E Note 24).
Further information on other financial assets is provided in
E Note 32.
17. Other assets
Further information on marketable debt securities and similar
investments is provided in E Note 32.
Non-financial other assets are comprised as shown in table
F.47.
16. Other financial assets
The line item other financial assets presented in the Consoli-
dated Statement of Financial Position is comprised as shown
in table F.46.
Other expected reimbursements predominantly relate to
recovery claims from our suppliers in connection with issued
product warranties.
F.46
Other financial assets
In millions of euros
Current
At December 31, 2019
Total
Non-current
Current
At December 31, 2018
Total
Non-current
Equity instruments and debt instruments
Recognized at fair value through other
comprehensive income
Recognized at fair value through profit or loss
–
–
–
860
482
378
860
482
378
Derivative financial instruments used in hedge accounting
185
1,006
1,191
–
–
–
524
91
748
364
384
509
18
748
364
384
1,033
109
3,843
5,733
7
20
27
2,544
2,736
1,461
3,347
4,005
6,083
2,355
2,970
1,488
2,763
Other financial assets recognized at fair value
through profit or loss
Other receivables and miscellaneous other
financial assets
F.47
Other assets
In millions of euros
Reimbursements due to income tax refunds
Reimbursements due to other tax refunds
Other expected reimbursements
Prepaid expenses
Others
Current
At December 31, 2019
Total
Non-current
Current
At December 31, 2018
Total
Non-current
618
3,097
232
682
797
380
261
225
69
351
5,426
1,286
998
3,358
457
751
1,148
6,712
981
3,152
229
712
815
254
136
281
126
318
5,889
1,115
1,235
3,288
510
838
1,133
7,004
268 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.48
Inventories
In millions of euros
Raw materials and manufacturing supplies
Work in progress
Finished goods, parts and products held
for resale
Advance payments to suppliers
F.49
Trade receivables
In millions of euros
Gross carrying amount
Loss allowances
Net carrying amount
At December 31,
2018
2019
3,321
4,290
21,922
224
29,757
3,130
4,674
21,351
334
29,489
At December 31,
2018
2019
12,575
-243
12,332
12,826
-240
12,586
18. Inventories
Inventories are comprised as shown in table F.48.
The amount of write-down of inventories to net realizable value
recognized as an expense in cost of sales was €413 million in
2019 (2018: €333 million). Inventories that are expected to be
recovered or settled after more than twelve months amounted
to €1,159 million at December 31, 2019 (December 31, 2018:
€1,047 million) and are primarily spare parts.
As collateral for certain vested employee benefits in
Germany, the value of company cars and demonstration cars
at Mercedes-Benz Cars and Mercedes-Benz Vans included
in inventories is pledged as collateral to the Daimler Pension
Trust e.V. in an amount of €1,083 million at December 31,
2019 (December 31, 2018: €952 million).
In addition, inventories with a carrying amount of €302 million
at December 31, 2019 (December 31, 2018: €367 million) were
pledged as collateral for liabilities from ABS transactions (see
also E Note 24).
The carrying amount of inventories recognized during the
period by taking possession of collateral held as security
amounted to €48 million at December 31, 2019 (December 31,
2018: €21 million). Those assets are utilized in the context
of normal business operations.
19. Trade receivables
Trade receivables are comprised as shown in table F.49.
At December 31, 2019, €47 million of the trade receivables
mature after more than one year (December 31, 2018:
€29 million).
Trade receivables are receivables from contracts with
customers in scope of IFRS 15.
Loss allowances
The development of loss allowances due to expected credit
losses for trade receivables is shown in table F.50.
Credit risks
Information on credit risks included in trade receivables is
shown in table F.51.
Further information on financial risk and types of risk is
provided in E Note 33.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 269
F.50
Development of loss allowances for trade receivables due to expected credit losses
In millions of euros
Balance at January 1, 2018
Additions
Change in remeasurement
Utilization
Reversals
Change in models/risk parameters
Transfer to stage 2
Transfer to stage 3
Currency translation and other changes
Balance at December 31, 2018
Additions
Change in remeasurement
Utilization
Reversals
Change in models/risk parameters
Transfer to stage 2
Transfer to stage 3
Currency translation and other changes
Balance at December 31, 2019
F.51
Credit risks included in trade receivables
In millions of euros
At December 31, 2019
Gross carrying amount
thereof
not past due
past due 30 days and less
past due 31 to 60 days
past due 61 to 90 days
past due 91 to 180 days
past due more than 180 days
At December 31, 2018
Gross carrying amount
thereof
not past due
past due 30 days and less
past due 31 to 60 days
past due 61 to 90 days
past due 91 to 180 days
past due more than 180 days
Lifetime expected credit loss
Total
not credit
impaired
(Stage 2)
credit
impaired
(Stufe 3)
168
45
1
-19
-57
–
2
-1
-14
125
38
1
-12
-39
–
-13
-1
-1
98
128
60
5
-18
-36
–
-2
1
-23
115
106
6
-35
-60
–
13
1
-1
145
296
105
6
-37
-93
–
–
–
-37
240
144
7
-47
-99
–
–
–
-2
243
Lifetime expected credit loss
Total
not credit
impaired
(Stage 2)
credit
impaired
(Stage 3)
12,177
10,058
1,407
207
99
168
238
12,463
10,456
1,315
190
115
142
245
398
192
13
4
2
39
148
363
112
36
3
1
73
138
12,575
10,250
1,420
211
101
207
386
12,826
10,568
1,351
193
116
215
383
270 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In order to fulfill the conditions of the above-mentioned autho-
rization, the Annual Shareholders’ Meeting on April 1, 2015
also resolved to increase the share capital conditionally by an
amount of up to €500 million (Conditional Capital 2015).
This authorization to issue convertible and/or warrant bonds
has not yet been exercised.
Treasury shares
By resolution of the Annual Shareholders’ Meeting on April 1,
2015, the Company is authorized until March 31, 2020 to
acquire treasury shares in a volume up to 10% of the share cap-
ital issued as of the day of the resolution to be used for all
legal purposes. The shares can be used, amongst other things
excluding shareholders’ subscription rights, for business
combinations or to acquire companies or to be sold to third
parties for cash at a price that is not significantly lower
than the stock-exchange price of the Company’s shares. The
acquired shares can also be used to fulfill obligations from
issued convertible bonds and/or bonds with warrants and to
be issued to employees of the Company and employees
and board members of the Company’s affiliates pursuant to
Sections 15 et seq. of the German Stock Corporation Act (AktG).
The treasury shares can also be canceled.
The Board of Management is further authorized, with the
consent of the Supervisory Board, to exclude shareholders’
subscription rights in other defined cases. In a volume up
to 5% of the share capital issued as of the day of the resolution
of the Annual Shareholders’ Meeting, the Company was also
authorized to acquire treasury shares also by using derivatives
(put options, call options, forward purchases or a combination
of these instruments), whereby the term of a derivative must not
exceed 18 months and must not end later than March 31, 2020.
The authorization to acquire treasury shares has not yet been
exercised.
As was the case at December 31, 2018, no treasury shares are
held by Daimler AG at December 31, 2019.
Employee share purchase plan
In 2019, as in the previous year without utilizing the authori-
zation to acquire treasury shares granted by the Annual Share-
holders’ Meeting on April 1, 2015, 0.8 million Daimler shares
representing €2.4 million or 0.08% of the share capital were
purchased for a price of €42 million and reissued to employees
(2018: 0.7 million Daimler shares representing €2.1 million
or 0.07% of the share capital were purchased for a price of
€50 million).
20. Equity
See also the Consolidated Statement of Changes in Equity
F.05.
Share capital
The share capital (authorized capital) is divided into no-par-value
shares. All shares are fully paid up. Each share confers the
right to one vote at the Annual Shareholders’ Meeting of Daimler
AG and, if applicable, with the exception of any new shares
potentially not entitled to dividends, to an equal portion of the
profits as defined by the dividend distribution decided upon
at the Annual Shareholders’ Meeting. Each share represents a
proportionate amount of approximately €2.87 of the share
capital.
Since January 1, 2018, there has been no change in the number
of shares outstanding/issued. The number at December 31,
2019 is 1,070 million, unchanged from December 31, 2018.
Approved capital
The Annual Shareholders’ Meeting held on April 5, 2018
authorized the Board of Management, with the consent of the
Supervisory Board, to increase the share capital of Daimler AG
in the period until April 4, 2023 by a total of €1.0 billion in
one lump sum or by separate partial amounts at different times
by issuing new, registered no-par-value shares in exchange
for cash and/or non-cash contributions (Approved Capital 2018).
The new shares are generally to be offered to the shareholders
for subscription (also by way of indirect subscription pursuant
to Section 186 Subsection 5 Sentence 1 of the German Stock
Corporation Act (AktG). Among other things, the Board of Man-
agement was authorized with the consent of the Supervisory
Board to exclude shareholders’ subscription rights under certain
conditions and within defined limits.
Approved Capital 2018 has not yet been utilized.
Conditional capital
By resolution of the Annual Shareholders’ Meeting on April 1,
2015, the Board of Management is authorized, with the
consent of the Supervisory Board, until March 31, 2020 to issue
convertible and/or warrant bonds or a combination of these
instruments (“bonds”) with a total face value of up to €10.0 bil-
lion and a maturity of no more than ten years. The Board of
Management is allowed to grant the holders of these bonds con-
version or warrant rights for new registered no-par-value
shares in Daimler AG with an allocable portion of the share
capital of up to €500 million in accordance with the details
defined in the terms and conditions of the bonds. The bonds
can be offered in exchange for cash and/or non-cash con-
tributions, in particular for shares in other companies. The terms
and conditions of the bonds can include warranty obligations or
conversion obligations. The bonds can be issued once or sev-
eral times, wholly or in installments, or simultaneously in various
tranches as well by affiliates of the Company within the mean-
ing of Sections 15 et seq. of the German Stock Corporation Act
(AktG). Among other things, the Board of Management was
authorized to exclude shareholders’ subscription rights for the
bonds under certain conditions and within defined constraints
with the consent of the Supervisory Board.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 271
Capital reserves
Capital reserves primarily comprise premiums arising on the
issue of shares as well as expenses relating to the exercise
of the up to 2014 exercisable stock option plans and the issue
of employee shares, effects from changes in ownership inter-
ests in consolidated entities and directly attributable related
transaction costs.
Retained earnings
Retained earnings comprise the accumulated net profits and
losses of all companies included in Daimler’s Consolidated
Financial Statements, less any profits distributed. In addition,
the effects of remeasuring defined benefit plans as well as
the related deferred taxes are presented within retained earn-
ings. In addition the effects of hyperinflation in Argentina
are included in the line item “Other” of the Consolidated State-
ment of Changes in Equity.
Dividend
Under the German Stock Corporation Act (AktG), the dividend
is paid out of the distributable profit reported in the annual
financial statements of Daimler AG (parent company only) in
accordance with the German Commercial Code (HGB). For
the year ended December 31, 2019, the Daimler management
will propose to the shareholders at the Annual Shareholders’
Meeting to pay out €963 million of the distributable profit of
Daimler AG as a dividend to the shareholders, equivalent
to €0.90 per no-par-value share entitled to a dividend (2018:
€3,477 million and €3.25 per no-par-value share entitled
to a dividend respectively).
Other reserves
Other reserves comprise accumulated unrealized gains/losses
from currency translation of the financial statements of the
consolidated foreign companies and accumulated unrealized
gains/losses on financial assets, derivative financial instru-
ments and equity-method investments.
Table F.02 shows the details of changes in other reserves in
other comprehensive income/loss.
21. Share-based payment
At December 31, 2019, the Group has the 2016-2019 Perfor-
mance Phantom Share Plans (PPSP) outstanding. The PPSP are
cash-settled share-based payment instruments and are mea-
sured at their respective fair values at the balance sheet date.
The PPSP are paid out at the end of the stipulated holding
period; earlier, pro-rated payoff is possible in the case of bene-
fits leaving the Group only if certain defined conditions are
met. PPSP 2015 was paid out as planned in the first quarter of
2019.
Moreover, 50% of the annual bonus of the members of the
Board of Management is paid out after a waiting period of one
year. The actual payout is determined by the development
of Daimler shares compared to an automobile related index
(Auto-STOXX). The fair value of this medium-term annual
bonus, which depends on this development, is measured by
using the intrinsic value at the reporting date.
The pre-tax effects of share-based payment arrangements for
the executive managers of the Group and the members of
the Board of Management of Daimler AG on the Consolidated
Statement of Income and Consolidated Statement of Financial
Position are shown in table F.52.
Table F.53 shows expenses in the Consolidated Statement
of Income resulting from the rights of current members of the
Board of Management.
The details shown in table F.53 do not represent any paid or
committed remuneration, but refer to expenses calculated
according to IFRS. Details of the remuneration of the members
of the Board of Management in 2019 can be found in the
Remuneration Report. E Management Report from page 108
F.52
Effects of share-based payment
2019
Expense
2018
At December 31,
2018
2019
Provision
In millions of euros
PPSP
-70
-13
124
112
Medium-term compo-
nent of annual bonus
of the members of the
Board of Management
-1
-71
-2
-15
3
127
10
122
272 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.53
Expenses in the Consolidated Statement of Income resulting from share-based payments of current members of the Board of Management
In millions of euros
PPSP
Medium-term component of the annual bonus
In millions of euros
PPSP
Medium-term component of the annual bonus
In millions of euros
PPSP
Medium-term component of the annual bonus
In millions of euros
PPSP
Medium-term component of the annual bonus
Ola Källenius
Martin Daum
Renata Jungo Brüngger
2019
2018
2019
2018
2019
2018
-1.0
-0.1
-0.1
-0.2
-0.6
-0.1
-0.2
-0.2
-0.8
-0.1
-0.2
-0.2
Wilfried Porth
Markus Schäfer1
Britta Seeger
2019
2018
2019
2018
2019
2018
-0.8
-0.1
-0.1
-0.2
-0.4
-0.1
–
–
-0.6
-0.1
-0.3
-0.2
Hubertus Troska
Harald Wilhelm2
Dr. Dieter Zetsche³
2019
2018
2019
2018
2019
2018
-0.8
-0.1
-0.1
-0.2
-0.2
-0.1
–
–
-4.4
-0.1
-0.4
-0.5
Bodo Uebber³
2019
2018
-2.1
–
-0.2
-0.2
1 Appointed to the Board of Management as of May 22, 2019.
2 Appointed to the Board of Management as of April 1, 2019.
3 Appointment to the Board of Management ended on May 22, 2019, service contract benefits continued until the respective service contract expired
on December 31, 2019. Expense in 2019 also includes the complete vesting of granted rights from 2017 to 2019.
Performance Phantom Share Plans
In 2019, the Group adopted a Performance Phantom Share
Plan (PPSP), similar to those used in previous years, under
which eligible employees are granted phantom shares entitling
them to receive cash payments after four years. During
the four-year period between the allocation of the preliminary
phantom shares and the payout of the plan at the end of
the term, the phantom shares earn a dividend equivalent in the
amount of the actual dividend paid on ordinary Daimler
shares. The amount of cash paid to eligible employees at the
end of the holding period is based on the number of vested
phantom shares (determined over a three-year performance
period) multiplied by the quoted price of Daimler’s ordinary
shares (calculated as an average price over a specified period
at the end of the four–year plan period). The vesting period
is therefore four years. For the existing plans, the quoted price
of Daimler’s ordinary shares to be used for the payout is
limited to 2.5 times the Daimler share price at the date of grant.
Furthermore, the payout for the members of the Board of
Management is also limited to 2.5 times the allotment value
used to determine the preliminary number of phantom shares.
The limitation of the payout for the members of the Board of
Management also includes the dividend equivalent.
The number of phantom shares that vest of the PPSPs granted
in 2015 to 2019 is based on the relative share performance,
which measures the development of the price of a share price
index based on a competitor group including Daimler, and
the return on sales (RoS) compared with the average RoS of a
competitor group. In addition, beginning with plan PPSP 2018,
the average RoS of the competitor group is revenue-weighted.
Special rules apply for the members of the Board of Manage-
ment: Daimler’s RoS must be not equal to but higher than that
of the competitors in order to achieve the same target achieve-
ment as the other plan participants. For the PPSP granted in
2015 and until 2019, an additional limit on target achievement
was agreed upon for the reference parameter RoS for the
members of the Board of Management. In the case of target
achievement between 195% and 200%, an additional com-
parison is made on the basis of the RoS achieved in absolute
terms. If the actual RoS for the automotive business is
below the strategic target (currently 9%) in the third year of the
performance period, target achievement is limited to 195%.
The Group recognizes a provision for awarding the PPSP in the
Consolidated Statement of Financial Position. Since payment
per vested phantom share depends on the quoted price of
Daimler’s ordinary shares, that quoted price essentially repre-
sents the fair value of each phantom share. The proportionate
remuneration expenses from the PPSP recognized in the
individual years are measured based on the price of Daimler
ordinary shares and the estimated target achievement.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 273
22. Pensions and similar obligations
Table F.54 shows the composition of provisions for pension
benefit plans and similar obligations.
At the Daimler Group, defined benefit pension obligations
exist as well as, to a smaller extent, defined contribution pen-
sion obligations, specific to the various countries. In addition,
healthcare benefit obligations are recognized outside Germany.
Defined benefit pension plans
Provisions for pension obligations are made for defined com-
mitments to active and former employees of the Daimler Group
and their survivors. The defined benefit pension plans provided
by Daimler generally vary according to the economic, tax
and legal circumstances of the country concerned. Most of the
defined benefit pension plans also provide benefits in the case
of invalidity and death.
The Group’s main German and non-German pension plans are
described below.
German pension plans and pension plan assets
Most employees in Germany have defined benefit pension
plans; most of the pension plans for the active workforce are
based on individual retirement benefit accounts, to which
the Company makes annual contributions. The amount of the
contributions for employees paid according to wage-tariff
agreements depends on the tariff classification in the respec-
tive year or on their respective income, and for executives
it depends on their respective income. For the commitments
to retirement benefits made until 2011, the contributions
continue to be converted into capital components and credited
to the individual pension account with the application of fixed
factors related to each employee’s age. The conversion factors
include a fixed value increase. The pension plans were newly
structured for new entrants in 2011 to reduce the risks associ-
ated with defined benefit plans. New entrants now benefit
from value increases of the contributions through an invest-
ment fund with a special lifecycle model. The Company
guarantees at a minimum the value of the contributions paid
in. Pension payments are made either as a life annuity,
twelve annual installments, or a single lump sum.
In addition, previously concluded defined benefit plans
exist which primarily depend on employees’ wage-tariff classi-
fication upon transition into the benefit phase and which
foresee a life annuity.
As well as the employer-financed pension plans granted
by German companies, the employees of some companies are
also offered various earnings-conversion models.
Most of the pension obligations in Germany relating to defined
benefit pension plans are funded by investment funds. Con-
tractual trust arrangements (CTA) exist between Daimler AG as
well as some subsidiaries in Germany and the Daimler Pension
Trust e.V. The Daimler Pension Trust e.V. acts as a collateral
trust fund.
In 2018, Daimler AG transferred certain defined benefit
obligations and plan assets of retired employees to Daimler
Pensionsfonds AG (pension fund). These benefits will be
administrated by that non-insurance-like pension fund, which
falls under the scope of the Act on the Supervision of Insur-
ance Undertakings and is therefore subject to the oversight of
the Federal Financial Supervisory Agency (BaFin). Insofar
as in the future, BaFin rules that a deficit has occurred in the
pension fund, a supplementary contribution will be required
from Daimler AG.
In Germany, there are normally no statutory or regulatory
minimum funding requirements.
Non-German pension plans and pension plan assets
Significant plans exist primarily in the United States and
Japan. They comprise plans relating to final salaries as well as
plans relating to salary-based components. Most of the
obligations outside Germany from defined benefit pension
plans are funded by investment funds.
Risks from defined benefit pension plans and
pension plan assets
The general requirements with regard to retirement benefit
models are laid down in the Pension Plan Design Policy, which
has Group-wide validity. Accordingly, the committed benefits
are intended to contribute to additional financial security
during retirement, and in the case of death or invalidity to be
capable of being planned and fulfilled by the respective
company of the Group and to have a low-risk structure. In
addition, a committee exists that approves new pension
plans and amendments to existing pension plans as well as
guidelines relating to company retirement benefits.
The obligations from defined benefit pension plans and the
pension plan assets can be subject to fluctuations over time.
This can cause the funded status to be negatively or positively
impacted. Fluctuations in the defined benefit pension obliga-
tions result at the Daimler Group in particular from changes in
financial assumptions such as discount rates and increases
in the cost of living, but also from changes in demographic
assumptions such as adjusted life expectancies. With most of
the German plans, expected long-term wage and salary
increases do not have an impact on the amount of the obligation.
The fair value of plan assets is predominantly determined by
the situation on the capital markets. Unfavorable develop-
ments, especially of equity prices and fixed-interest securities,
could reduce that fair value. The diversification of investment
funds, the engagement of asset managers using quantitative and
qualitative analyses, and the continual monitoring of perfor-
mance and risk help to reduce associated investment risk. The
Group regularly makes additional contributions to the plan
assets in order to cover future obligations from defined benefit
pension plans.
As a general principle, it is the Group’s objective to design
new pension plans as defined benefit plans based on capital
components or on annual contributions, or as defined con-
tribution plans.
274 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.54
Composition of provisions for pensions and similar obligations
At December 31,
2019
2018
In millions of euros
Provision for pension benefits
8,518
6,298
Provision for other
post-employment benefits
1,210
9,728
1,095
7,393
Reconciliation of the net obligation from defined
benefit pension plans
The development of the relevant factors is shown in table
F.55.
Composition of plan assets
Plan assets are used solely to perform pension benefits and
to cover the administration costs of the plan assets. The
composition of the Group’s pension plan assets is shown in
table F.56.
Market prices are available for equities and bonds due to
their listing in active markets. Most of the bonds have invest-
ment grade ratings. They include government bonds of very
good creditworthiness.
The investment strategy is reviewed regularly and adjusted if
deemed necessary. The investment strategy is determined
by Investment Committees, which are generally composed of
representatives of the Finance and Human Resources depart-
ments. The pension plan assets are generally oriented towards
the structure of the pension obligations.
Pension cost
The components of pension cost included in the Consolidated
Statement of Income are shown in table F.57.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 275
F.55
Present value of defined benefit pension obligations and fair value of plan assets
In millions of euros
Present value of the defined benefit
obligation at January 1
Current service cost
Interest cost
Contributions by plan participants
Actuarial gains (-)/losses from changes
in demographic assumptions
Actuarial gains (-)/losses from changes
in financial assumptions
Actuarial gains (-)/losses from
experience adjustments
Actuarial gains (-)/losses
Past service cost, curtailments and settlements
Pension benefits paid
Currency exchange-rate changes and other changes
Present value of the defined benefit obligation
at December 31
At December 31, 2019
At December 31, 2018
Total
German Plans
Non-
German Plans
Total
German Plans
Non-
German Plans
31,645
27,852
3,793
31,744
27,746
3,998
714
636
52
11
4,214
-32
4,193
-118
-972
45
609
479
46
1
3,682
-52
3,631
–
-782
-65
105
157
6
10
532
20
562
-118
-190
110
700
616
60
175
-228
-32
-85
-76
600
481
55
202
75
-17
260
-71
-1,385
71
-1,211
-8
100
135
5
-27
-303
-15
-345
-5
-174
79
36,195
31,770
4,425
31,645
27,852
3,793
Fair value of plan assets at January 1
25,462
22,532
2,930
Interest income from plan assets
Actuarial gains/ losses (-)
Actual result on plan assets
Contributions by the employer
Contributions by plan participants
Settlements
Pension benefits paid
Currency exchange-rate changes and other changes
502
1,936
2,438
663
51
-105
-911
162
387
1,584
1,971
582
46
–
-745
68
115
352
467
81
5
-105
-166
94
Fair value of plan assets at December 31
27,760
24,454
3,306
Funded status
thereof recognized in other assets
thereof recognized in provisions
for pensions and similar obligations
-8,435
83
-7,316
–
-1,119
83
-8,518
-7,316
-1,202
-6,298
-5,320
27,215
529
-1,781
-1,252
696
60
–
-1,323
66
25,462
-6,183
115
24,197
426
-1,551
-1,125
585
55
–
-1,171
-9
22,532
-5,320
–
3,018
103
-230
-127
111
5
–
-152
75
2,930
-863
115
-978
276 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.56
Composition of plan assets
In millions of euros
Equities¹
Government bonds
Corporate bonds
Securitized bonds
Bonds
Other exchange-traded instruments
At December 31, 2019
At December 31, 2018
Total
German Plans
Non-
German Plans
Total
German Plans
Non-
German Plans
7,399
5,797
11,305
59
17,161
1
6,379
4,895
10,355
43
15,293
–
1,020
902
950
16
1,868
1
2,889
170
108
56
83
417
3,306
6,766
5,176
9,746
49
14,971
19
21,756
498
486
351
2,371
3,706
25,462
5,945
4,308
8,924
29
13,261
16
19,222
340
388
260
2,322
3,310
22,532
821
868
822
20
1,710
3
2,534
158
98
91
49
396
2,930
Total exchange-traded instruments
24,561
21,672
Alternative investments²
Real estate
Other non-exchange-traded instruments
Cash and cash equivalents
Total non-exchange-traded instruments
Fair value of plan assets
424
488
566
1,721
3,199
27,760
254
380
510
1,638
2,782
24,454
1 Including the shares in Renault and Nissan in the amount of €1,188 (in 2018: €1,528) million.
2 Alternative investments mainly comprise private equity.
F.57
Pension cost
In millions of euros
Current service cost
Past service cost, curtailments and settlements
Net interest expense
Net interest income
Total
German Plans
2019
Non-
German Plans
Total
German Plans
2018
Non-
German Plans
-714
13
-138
4
-835
-609
–
-92
–
-701
-105
13
-46
4
-134
-700
76
-90
3
-711
-600
71
-55
–
-584
-100
5
-35
3
-127
Measurement assumptions
The measurement date for the Group’s defined benefit pension
obligations and plan assets is generally December 31. The
measurement date for the Group’s net periodic pension cost is
generally January 1. The assumptions used to calculate the
defined benefit obligations vary according to the economic con-
ditions of the countries in which the pension plans are situated.
The calculations carried out by actuaries were done in isolation
for the evaluation parameters regarded as important. This
means that if there is a simultaneous change in several param-
eters, the individual results cannot be summed due to correla-
tion effects. With a change in the parameters, the sensitivities
shown cannot be used to derive a linear development of the
defined benefit obligation.
Calculation of the defined benefit obligations uses life expec-
tancy for the German plans based on the 2018 G mortality
tables of K. Heubeck. Comparable country-specific calculation
methods are used for non-German plans.
For the calculation of the sensitivity of life expectancy, by
means of fixed (non-age-dependent) factors for a reference
person, a life expectancy one year higher or one year lower
is arrived at.
Table F.58 shows the significant weighted average measure-
ment factors used to calculate pension benefit obligations.
Sensitivity analysis
An increase or decrease in the main actuarial assumptions
would affect the present value of the defined benefit pension
obligations as shown in table F.59.
Effect on future cash flows
Daimler currently plans to make contributions of €0.8 billion to
its pension plans for the year 2020; the final amount is usually
set in the fourth quarter of a financial year. In addition, the
Group expects to make pension benefit payments of €1.0 billion
in 2020.
The weighted average duration of the defined benefit
obligations is shown in table F.60.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 277
Defined contribution pension plans
Other post-employment benefits
Under defined contribution pension plans, Daimler makes
defined contributions to external insurance policies or invest-
ment funds. There are fundamentally no further contractual
obligations or risks for Daimler in excess of the defined contri-
butions. The Group also pays contributions to governmental
pension schemes. In 2019, the total cost from defined contri-
bution plans amounted to €1.6 billion (2018: €1.6 billion). Of
those payments €1.5 billion (2018: €1.5 billion) were related to
governmental pension plans.
Certain foreign subsidiaries of Daimler, mainly in the United
States, provide their employees with post-employment health
care benefits with defined entitlements, which have to be
accounted for as defined benefit plans. Table F.61 shows key
data for other post-employment benefits.
Significant risks in connection with commitments for other
post-employment benefits (medical care) relate to rising
healthcare costs and lower contributions to those costs from
the public sector. In addition, these plans are subject to
the usual risks for defined benefit plans, in particular the risk
of changes in discount rates.
F.58
Significant factors for the calculation of pension benefit obligations
In percent
Discount rates
Expected increase in cost of living1
At December 31,
At December 31,
2019
2018
2019
2018
German Plans
German Plans
Non-
German Plans
Non-
German Plans
1.0
1.7
1.8
1.8
3.2
–
4.4
–
1 For German plans, expected increases in cost of living may affect – depending on the design of the pension plan – the obligation to the Group’s
active employees as well as retirees and their survivors. For most non-German plans, expected increases in cost of living do not have a material
impact on the amount of the obligation.
F.59
Sensitivity analysis for the present value of defined benefit pension obligation
In millions of euros
At December 31, 2019
At December 31, 2018
Total
German Plans
Non-
German Plans
Total
German Plans
Non-
German Plans
Sensitivity for discount rates
Sensitivity for discount rates
Sensitivity for expected increases
in cost of living
Sensitivity for expected increases
in cost of living
Sensitivity for life expectancy
Sensitivity for life expectancy
+ 0.25%
- 0.25%
+ 0.10%
- 0.10%
+ 1 year
- 1 year
-1,412
1,490
113
-112
546
-505
-1,247
1,330
93
-93
463
-405
-165
160
20
-19
83
-100
-1,174
1,252
98
-95
464
-417
-1,047
1,115
83
-82
393
-345
-127
137
15
-13
71
-72
278 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.60
Weighted average duration of the defined benefit obligations
In years
German plans
Non-German plans
2019
2018
17
16
16
16
F.61
Key data for other post-employment benefits
In millions of euros
2019
2018
Present value of defined benefit obligations
Fair value of reimbursement rights
Funded status
Net periodic cost for other post-employment
benefits
1,210
12
-1,198
1,095
27
-1,068
-11
-66
23. Provisions for other risks
Liability and litigation risks and regulatory proceedings
Provisions for liability and litigation risks and regulatory pro-
ceedings comprise costs for various legal proceedings, claims
and governmental investigations, which can lead in particular
to payments of compensation, punitive damages or other costly
actions. Additions in the financial year 2019 mainly resulted
from risks from litigation and regulatory proceedings in relation
to Mercedes-Benz diesel vehicles. The cash outflows in rela-
tion to non-current provisions are primarily expected within a
period until 2022.
Further information on liability and litigation risks and
regulatory proceedings is provided in E Note 30.
Other
Provisions for other risks primarily comprise expected costs
for other taxes, provisions for environmental protection and
obligations from outstanding commission for example to trade
representatives, provided that no revenue has been realized
with the recipient of the commission under IFRS 15. They also
include provisions for anticipated losses on contracts and
various other risks which cannot be allocated to any other class
of provision. The increase in other provisions results in particu-
lar from the review and prioritization of the product portfolio at
the Mercedes-Benz Vans segment.
The development of provisions for other risks is summarized
in table F.62.
24. Financing liabilities
The composition of financing liabilities is shown in table
F.63.
Lease liabilities include assets and liabilities which were recog-
nized until December 31, 2018 as finance leases in accordance
with IAS 17. Future minimum lease payments under finance
leases amounted to €477 million at December 31, 2018. The
reconciliation of future minimum lease payments from
finance lease arrangements to the corresponding liabilities at
December 31, 2018 is shown in table F.64.
At December 31, 2019, lease liabilities include effects from
first-time adoption of IFRS 16. Information on the adjustments
is disclosed in E Note 1 of the Notes to the Consolidated
Financial Statements. Information on the maturities of lease
liabilities is provided in E Note 33.
Product warranties
Daimler issues various types of product warranties, under which
it generally guarantees the performance of products delivered
and services rendered for a certain period. The provision for
these product warranties covers expected costs for legal and
contractual warranty claims as well as expected costs for
goodwill concessions and recall campaigns. This also includes
measures relating to Mercedes-Benz diesel vehicles in various
regions as well as recalls, in particular from an updated risk
assessment for an extended recall of Takata airbags. The utili-
zation date of product warranties depends on the incidence
of the warranty claims and can span the entire term of the
product warranties. The cash outflow for non-current product
warranties are primarily expected within a period until 2022.
Personnel and social costs
Provisions for personnel and social costs primarily comprise
expected expenses of the Group for employee anniversary
bonuses, profit sharing arrangements and management bonuses
as well as early retirement and partial retirement plans. The
additions recorded to the provisions for profit sharing and man-
agement bonuses in the reporting year usually result in cash
outflows in the following year. The cash outflow for non-current
provisions for personnel and social costs is primarily expected
within a period until 2030.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 279
F.62
Provisions for other risks
In millions of euros
Balance at December 31, 2018
thereof current
thereof non-current
Additions
Utilizations
Reversals
Compounding and effects from changes in discount rates
Currency translation and other changes
Balance at December 31, 2019
thereof current
thereof non-current
F.63
Financing liabilities
In millions of euros
Notes/bonds
Commercial paper
Liabilities to financial institutions
Deposits in the direct banking business
Liabilities from ABS transactions
Lease liabilities
Loans, other financing liabilities
Product
warranties
Personnel and
social costs
Litigation risks
and regulatory
proceedings
Other
Total
7,043
3,080
3,963
5,215
-3,423
-210
45
38
8,708
3,744
4,964
4,261
1,971
2,290
1,694
-1,810
-152
155
100
4,248
1,522
2,726
2,147
1,149
998
2,876
-103
-62
17
27
4,902
2,498
2,404
2,111
1,628
483
2,233
-955
-296
21
-48
3,066
2,563
503
15,562
7,828
7,734
12,018
-6,291
-720
238
117
20,924
10,327
10,597
At December 31, 2019
At December 31, 2018
Current
Non-current
Total
Current
Non-current
Total
17,806
3,278
23,043
9,713
6,911
703
1,147
67,819
–
16,768
3,406
7,021
3,537
628
85,625
3,278
39,811
13,119
13,932
4,240
1,775
15,090
2,835
21,068
9,677
6,782
27
761
61,400
–
18,332
2,097
5,670
320
843
76,490
2,835
39,400
11,774
12,452
347
1,604
62,601
99,179
161,780
56,240
88,662
144,902
F.64
Reconciliation of minimum lease payments to liabilities from finance lease arrangements
In millions of euros
Maturity
within one year
between one and five years
later than five years
Future minimum
lease payments
Interest included in future
minimum lease payments
Liabilities from finance
lease arrangements
At December 31, 2018
38
162
277
477
11
56
63
130
27
106
214
347
280 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. Other financial liabilities
The composition of other financial liabilities is shown in
table F.65.
Financial liabilities measured at fair value through profit or
loss relate exclusively to derivative financial instruments which
are not used in hedge accounting.
Further information on other financial liabilities is provided in
E Note 32.
26. Deferred income
The composition of deferred income is shown in table F.66.
F.65
Other financial liabilities
In millions of euros
Derivative financial instruments
used in hedge accounting
Financial liabilities recognized
at fair value through profit or loss
Liabilities from residual value guarantees
Liabilities from wages and salaries
Accrued interest expenses
Deposits received
Other
Miscellaneous other financial liabilities
F.66
Deferred income
In millions of euros
At December 31, 2019
At December 31, 2018
Current
Non-current
Total
Current
Non-current
Total
899
45
1,138
1,165
1,065
568
2,872
6,808
7,752
287
7
921
33
–
585
279
1,818
2,112
1,186
52
2,059
1,198
1,065
1,153
3,151
8,626
9,864
633
51
1,149
1,267
1,105
504
2,948
6,973
7,657
461
5
943
25
–
542
399
1,909
2,375
1,094
56
2,092
1,292
1,105
1,046
3,347
8,882
10,032
At December 31, 2019
At December 31, 2018
Current
Non-current
Total
Current
Non-current
Total
Deferral of sales revenue received from sales
with residual-value guarantees
Deferral of advance rental payments received
from operating lease arrangements
Other deferred income
306
1,009
309
1,624
565
927
106
1,598
871
1,936
415
3,222
391
890
299
584
929
99
1,580
1,612
975
1,819
398
3,192
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 281
27. Contract and refund liabilities
Table F.67 shows the composition of contract and refund
liabilities.
F.67
Contract and refund liabilities
28. Other liabilities
Table F.68 shows the composition of other liabilities.
In millions of euros
Service and maintenance contracts
and extended warranties
Other contract liabilities
Contract liabilities
Obligations from sales transactions
Other refund liabilities
Refund liabilities
Contract and refund liabilities
thereof long-term
thereof short-term
At December 31,
2019
2018
6,504
1,337
7,841
5,200
590
5,790
5,868
1,167
7,035
4,931
553
5,484
13,631
12,519
6,060
7,571
5,438
7,081
F.68
Other liabilities
In millions of euros
Income tax liabilities
Other tax liabilities
Miscellaneous other liabilities
At December 31, 2019
At December 31, 2018
Current
Non-current
Total
Current
Non-current
Total
1,128
1,909
183
3,220
582
–
4
586
1,710
1,909
187
3,806
1,095
1,905
169
3,169
636
1
1
638
1,731
1,906
170
3,807
282 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.69
Changes in other operating assets and liabilities
In millions of euros
Provisions
Financial instruments
Miscellaneous other assets and liabilities
2019
2018
5,217
104
320
5,641
742
-36
171
877
F.70
Cash flows included in cash provided by operating activities
In millions of euros
Interest paid
Interest received
Dividends received from
equity-method investments
Dividends received from other shareholdings
2019
2018
-725
337
1,202
94
-678
257
1,380
49
F.71
Assets and liabilities disposed
In millions of euros
Intangible assets
Equipment on operating leases
Other assets
Financial liabilities
Other liabilities
2019
219
27
297
140
79
29. Consolidated Statement of Cash Flows
Calculation of funds
At December 31, 2019, cash and cash equivalents included
restricted funds of €64 million (2018: €0 million). The
restricted funds primarily relate to subsidiaries where exchange
controls apply so that the Group has restricted access to
the funds.
Cash provided by operating activities
Changes in other operating assets and liabilities are shown in
table F.69.
The change in provisions in comparison to the prior year pri-
marily resulted from provisions for warranties and customer
goodwill obligations as well as provisions for litigation risks and
regulatory proceedings. The increase relates to ongoing
governmental and legal proceedings and measures taken with
regard to Mercedes-Benz diesel vehicles in several regions,
as well as an updated risk assessment for an expanded recall
of vehicles with Takata airbags. In addition, the other provi-
sions led to an increase especially due to the review and priori-
tization of the product portfolio at the Mercedes-Benz Vans
segment.
Table F.70 shows cash flows included in cash provided by
operating activities. Furthermore, the cash effect of an off-
balance-sheet ABS transaction carried out in 2019 is shown in
the cash flow provided by operating activities. The transaction
resulted in a cash inflow of €0.9 billion.
The line item other non-cash expense and income within the
reconciliation of profit before income taxes to cash provided
by operating activities in the reporting year primarily com-
prised the Group’s share in the profit/loss of companies
accounted for using the equity method and effects due to the
review and prioritization of the product portfolio at the
Mercedes-Benz Vans segment. In the prior year, the line item
primarily comprised the Group’s share in the profit/loss of
companies accounted for using the equity method.
F.72
Changes in liabilities arising from financing activities
In millions of euros
2019
2018
Cash used for investing activities
The table F.71 shows the assets and liabilities disposed of
in connection with the merger of the business units for mobility
services.
Cash flows
9,404
17,456
Obtaining or losing control of subsidiaries
Changes in foreign exchange rates
Fair value changes
Other changes
–
2,130
157
5,310
–
411
-256
16
In addition to the disposal of the assets and liabilities shown in
table F.71 €106 million of cash and cash equivalents were
disposed in connection with establishing the joint ventures due
to the merger of the business units for mobility services.
Cash provided by financing activities
Cash provided by financing activities includes cash flows from
hedging the currency risks of financial liabilities. In 2019,
cash provided by financing activities included payments for the
reduction of outstanding leasing liabilities of €701 million
(2018: €37 million).
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 283
On January 8, 2019, the Arizona State Attorney General filed a
civil complaint in Arizona state court against Daimler AG and
MBUSA making similar allegations that Arizona consumers had
been deliberately deceived in connection with the advertising
of Mercedes-Benz diesel vehicles. The state seeks monetary
penalties for violation of Arizona’s consumer protection laws.
Another consumer class-action lawsuit against Daimler AG and
other companies of the Group containing similar allegations
was filed in Canada in April 2016. On June 29, 2017, the court
granted a procedural motion to certify certain issues for class
treatment, and on March 12, 2018, the court ordered the parties
to send a notice to the class by May 18, 2018, informing class
members that the litigation is ongoing and that they will be
bound by the outcome. That notice was sent, and class members
had until July 20, 2018 to opt out of the class to avoid being
bound by subsequent rulings in the case.
On July 14, 2017, an additional class action was filed in the
Superior Court of California, Los Angeles County, against
Daimler AG and other companies of the Group, alleging claims
similar to the existing US class action. That action was
removed to Federal Court and, on October 31, 2017, was trans-
ferred to the District of New Jersey. On December 21, 2017,
the parties stipulated to dismiss, without prejudice, that lawsuit.
It may be filed again under specific conditions.
Daimler AG and MBUSA, respectively, regard the foregoing
lawsuits in the United States and Canada as being without
merit and will defend against the claims.
In Germany, a multitude of lawsuits by investors alleging the
violation of disclosure requirements is pending. Plaintiffs
con-tend that Daimler AG did not immediately disclose inside
in-formation in connection with the emission behavior of its
diesel vehicles and that it had made false and misleading pub-
lic statements. They further claim that the purchase price of
their Daimler shares would have been lower if Daimler had cor-
rectly complied with its disclosure duties. In this context,
both investors as well as Daimler AG have filed motions to initi-
ate a model proceeding in accordance with the Act on Model
Proceedings in Capital Markets Disputes (KapMuG). Currently,
no model proceeding is pending. Daimler AG also regards
these lawsuits as being without merit and will defend against
the claims.
Table F.72 includes changes in liabilities arising from financ-
ing activities, divided into cash and non-cash components.
The increase in other changes in comparison to the prior year
primarily resulted from the application of lessee accounting
according to IFRS 16.
30. Legal proceedings
Daimler AG and its subsidiaries are confronted with various
legal proceedings, claims as well as governmental investigations
and orders (legal proceedings) on a large number of topics,
including vehicle safety, emissions, fuel economy, financial ser-
vices, dealer, supplier and other contractual relationships,
intellectual property rights, product warranties, environmental
matters, antitrust matters (including actions for damages) and
shareholder matters. Legal proceedings relating to products
deal with claims on account of alleged vehicle defects. Some
of these claims are asserted by way of class action suits. If the
outcome of such legal proceedings is detrimental to Daimler,
the Group may be required to pay substantial compensatory
and punitive damages or to undertake service actions, recall
campaigns, monetary penalties or other costly actions. Legal
proceedings may have an impact on the Group’s reputation.
Diesel emission behavior: class-action and other lawsuits
in the United States, Canada and Germany
As already reported, several consumer class-action lawsuits
were filed against Mercedes-Benz USA, LLC (MBUSA) in Federal
Courts in the United States in early 2016. The main allegation
was the use of devices that impermissibly impair the effective-
ness of emission control systems in reducing nitrogen-oxide
(NOX) emissions and which cause excessive emissions from
vehicles with diesel engines. In addition, plaintiffs alleged that
consumers were deliberately deceived in connection with the
advertising of Mercedes-Benz diesel vehicles. Those consumer
class actions were consolidated into one class action pending
against both Daimler AG and MBUSA in the US District Court
for the District of New Jersey, in which the plaintiffs asserted
various grounds for monetary relief on behalf of a nationwide
class of persons or entities who owned or leased certain mod-
els of Mercedes-Benz diesel vehicles as of February 18, 2016.
Daimler AG and MBUSA moved to dismiss the lawsuit in its
entirety. By order dated December 6, 2016, the court granted
Daimler AG’s and MBUSA’s motion to dismiss and dismissed
the lawsuit without prejudice, based on plaintiffs’ failure to
allege with sufficient specificity the advertising that they con-
tended had misled them. Plaintiffs subsequently filed an
amended class action complaint in the same court making sim-
ilar allegations. The amended complaint also adds as defen-
dants Robert Bosch LLC and Robert Bosch GmbH (collectively;
“Bosch”), and alleges that Daimler AG and MBUSA conspired
with Bosch to deceive US regulators and consumers. On Feb-
ruary 1, 2019, the court granted in part and denied in part
Daimler AG’s and MBUSA’s subsequent motion to dismiss. The
case is ongoing as the court’s decision merely addressed
certain legal aspects of plaintiffs’ claims and did not decide
whether the plaintiffs can ultimately prove their claims,
whether the plaintiffs’ allegations are true, or whether their
claims have merit.
284 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Diesel emission behavior: governmental proceedings
As reported, several federal and state authorities and other
institutions worldwide have inquired about and/or are/have
been conducting investigations and/or administrative proceed-
ings and/or have issued administrative orders or, in the case
of the Stuttgart district attorney’s office, a fine notice. These
particularly relate to test results, the emission control systems
used in Mercedes-Benz diesel vehicles and/or Daimler’s inter-
action with the relevant federal and state authorities as well as
related legal issues and implications, including, but not limited
to, under applicable environmental, criminal and antitrust laws.
These authorities and institutions include, amongst others,
the U.S. Department of Justice (DOJ), which in April 2016
requested that Daimler AG review its certification and admis-
sions processes related to exhaust emissions of diesel vehicles
in the United States by way of an internal investigation in
cooperation with the DOJ, the U.S. Environmental Protection
Agency (EPA), the California Air Resources Board (CARB)
and other US state authorities, the European Commission, the
German Federal Cartel Office (“Bundeskartellamt”), as well
as national antitrust authorities and other authorities of various
foreign states as well as the German Federal Ministry of Trans-
port and Digital Infrastructure (BMVI) and the German Federal
Motor Transport Authority (KBA). In the course of its formal
investigation into possible collusion on clean emission technol-
ogy, the European Commission sent a statement of objections
to Daimler and other automobile manufacturers in April 2019.
In this context, Daimler filed an application for immunity from
fines (leniency application) with the European Commission
some time ago. The Stuttgart district attorney’s office is con-
ducting criminal investigation proceedings against Daimler
employees concerning the suspicion of fraud and criminal
advertising, and, in May 2017, searched the premises of Daimler
at several locations in Germany. In February 2019, the Stutt-
gart district attorney’s office also initiated a formal investigation
proceeding against Daimler AG with respect to an administra-
tive offense. In September 2019, the Stuttgart district attorney’s
office issued a fine notice against Daimler based on a negli-
gent violation of supervisory duties in the amount of €870 mil-
lion which has become legally binding, thereby concluding
the administrative offense proceedings against Daimler.
In the years 2018 and 2019, KBA issued various administrative
orders holding that certain calibrations of specified functional-
ities in certain Mercedes-Benz diesel vehicles are to be quali-
fied as impermissible defeat devices and ordered subsequent
auxiliary provisions for the respective EC type approvals in
this respect, including stops of the first registration and man-
datory recalls. Daimler has filed timely objections against
such administrative orders in order to have the open legal issues
resolved, if necessary, also by a court of law. In the course
of its regular market supervision, KBA is routinely conducting
further reviews of Mercedes-Benz vehicles and is asking
questions about technical elements of the vehicles. In light of
the aforementioned administrative orders issued by KBA, it
is likely that in the course of the ongoing and/or further inves-
tigations, KBA will issue additional administrative orders hold-
ing that other Mercedes-Benz diesel vehicles are also equipped
with impermissible defeat devices. Daimler has (in view of
KBA’s interpretation of the law as a precaution) implemented a
temporary delivery and registration stop with respect to cer-
tain models, also covering the used car, leasing and financing
businesses, and is constantly reviewing whether it can lift
this delivery and registration stop in whole or in part. The new
calibrations requested by KBA are being processed, and for
a certain proportion of the vehicles, the relevant software has
already been approved by KBA; the related recalls have insofar
been initiated. It cannot be ruled out that software updates
may be reworked, further delivery and registration stops may
be ordered or resolved by the Company as a precautionary
measure, also with a view to the used car, leasing and financ-
ing businesses, under the relevant circumstances. Daimler
has initiated further investigations and otherwise continues to
fully cooperate with the authorities and institutions.
Except for the Stuttgart district attorney’s office’s administra-
tive offense proceedings, the aforementioned inquiries,
investigations, administrative proceedings and the replies to
these related information requests, the objection proceed-
ings against the administrative orders as well as Daimler’s
internal investigations are ongoing.
Accounting assessment of the legal proceedings in
connection with diesel emission behavior
With respect to the legal proceedings described in the two
preceding chapters, in accordance with IAS 37.92 no further
information is disclosed with respect to whether, or to what
extent, provisions have been recognized and/or contingent lia-
bilities have been disclosed, so as not to prejudice Daimler’s
position.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 285
On June 23, 2016, the German Federal Cartel Office carried
out dawn raids at several car manufacturers and suppliers,
including Daimler AG, with regard to steel purchasing. Daimler
cooperated in full with the authority. In the fourth quarter of
2019, the proceedings were terminated by way of a settlement.
Class-action lawsuits Takata airbag inflators
As already reported, class actions in connection with Takata
airbags are pending in Canada, the United States and Israel.
The lawsuits are based on the allegation that, along with Takata
entities and many other companies that sold vehicles equipped
with Takata airbag inflators, Daimler entities were allegedly
negligent in selling such vehicles, purportedly not recalling them
quickly enough, and failing to provide an adequate replace-
ment airbag inflator. In detail: In August 2016, Mercedes-Benz
Canada (MB Canada) was added as a defendant to a putative
nationwide class action pending in Ontario Superior Court. In
addition, Daimler AG and MBUSA were named as defendants
along with Takata companies in June 2017, in a US nationwide
class action, which was filed in New Jersey Federal Court.
In the third quarter of 2017, such lawsuit was transferred to
federal court in the Southern District of Florida for consolida-
tion with other multidistrict litigation proceedings. Further
class action lawsuits in the USA were integrated into the multi-
ple district proceedings. In an order entered on June 21, 2019,
the court dismissed all consumer claims against Daimler AG
and some consumer claims against MBUSA. However, one of
the multidistrict litigation complaints has been amended to
assert claims by automotive recyclers who allege injury because
they are not able to re-sell salvaged airbag inflators that are
subject to the Takata recall. The motions to dismiss against
that complaint are still pending. In February 2019, Daimler AG
and its non-subsidiary Israeli distributor (Colmobil) were
named as defendants in an Israel-wide class action alleging
inadequacy of Takata recall efforts in Israel. The previously
reported lawsuit filed by the State of New Mexico against MBUSA
was dismissed without prejudice on June 22, 2017. It may,
however, be filed again under specific conditions. Daimler AG
continues to regard all these lawsuits brought with regard
to Mercedes-Benz vehicles as being without merit, and the
Daimler Group affiliates respectively affected will further
defend themselves against the claims. Contingent liabilities
were disclosed to a low extent for this topic.
Antitrust law proceedings (including actions for damages)
Starting on July 25, 2017, a number of class actions have
been filed in the United States and Canada against Daimler AG
and other manufacturers of automobiles as well as various
of their North American subsidiaries. Plaintiffs allege to have
suffered damages because defendants engaged in anti-
competitive behavior relating to vehicle technology, costs,
suppliers, markets, and other competitive attributes, including
diesel emissions control technology, since the 1990s. On
October 4, 2017, all pending US class actions were centralized
in one proceeding by the Judicial Panel on multidistrict litiga-
tion and transferred to the U.S. District Court for the Northern
District of California. On March 15, 2018, plaintiffs in the US
class action amended and consolidated their complaints into
two pleadings, one on behalf of consumers and the other
on behalf of dealers. On June 1, 2018, the court dismissed
Mercedes-Benz U.S. International, Inc., Mercedes-Benz Vans,
LLC, and Daimler North America Corp., pursuant to the
parties’ stipulation. Daimler AG and Mercedes-Benz USA, LLC
(MBUSA) remain parties in the case. On June 17, 2019, the
court granted motions to dismiss in the consolidated US class
action proceedings, albeit with leave to amend, and on
August 15, 2019, the plaintiffs filed amended complaints making
similar allegations. Daimler AG and MBUSA regard the US
and Canadian lawsuits as being without merit, and will defend
against the claims. This contingent liability cannot currently
be measured.
In this context, Daimler AG may disclose that it filed a leniency
application with the European Commission some time ago.
In late October 2017, the European Commission conducted
preannounced inspections with Daimler in Stuttgart (as well as
further inspections with other manufacturers) in order to fur-
ther clarify the facts of the case. In the third quarter of 2018, the
European Commission opened a formal investigation into
possible collusion on clean emission technology. In the course
of such investigation, the European Commission, in April 2019,
sent a statement of objections to Daimler and other auto-
mobile manufacturers to which Daimler responded in good time.
At present, Daimler does not expect this issue to have any
material impact on the Group’s profitability, cash flow and
financial situation.
Following the settlement decision by the European Commission
adopted on July 19, 2016, concluding the trucks antitrust pro-
ceedings, Daimler AG and Daimler Truck AG facing customers’
claims for damages to a considerable degree. Respective
legal actions, class actions and other forms of legal redress
have been initiated in various states in and outside of Europe
and should further be expected. Daimler is taking appropriate
legal remedies to defend itself. In accordance with IAS 37.92,
no further information is disclosed with respect to whether, or
to what extent, provisions have been recognized and/or con-
tingent liabilities have been disclosed, so as not to prejudice
Daimler’s position.
286 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31. Contingent liabilities and other financial
obligations
Contingent liabilities
At December 31, 2019, the best estimate for obligations from
contingent liabilities was €1,600 million (2018: €761 million).
The increase in contingent liabilities results from possible obli-
gations under the Renewable Energies Act in the context of
lease models, as well as from the legal proceedings described
in E Note 30.
Other financial obligations
At December 31, 2018, the Group reported other financial
obligations from non-cancelable rental agreements and
operating leases of €3,800 million according to IAS 17. At Janu-
ary 1, 2019, Daimler applies IFRS 16 for the first time, replacing
IAS 17. The reconciliation to the opening balance for lease lia-
bilities as at January 1, 2019, is based on other financial
obligations from non-cancelable rental agreements and oper-
ating leases at December 31, 2018, as shown in table
F.06. Further information on financial liabilities is provided
in E Notes 1 and 24.
At December 31, 2019, other financial obligations exist
from the acquisition of intangible assets, property, plant
and equipment and lease property of €4,613 million
(2018: €5,048 million).
In addition, the Group had issued irrevocable loan commit-
ments at December 31, 2019. These loan commitments
had not been utilized as of that date. Further information with
respect to these commitments is provided in E Note 33.
Toll Collect
On July 4, 2018, through its subsidiary Daimler Financial Ser-
vices AG (since July 23, 2019 Daimler Mobility AG), Daimler AG
together with Deutsche Telekom AG notarized a settlement
agreement (hereinafter: settlement) with the Federal Republic
of Germany which settles all arbitration proceedings in con-
nection with the involvement in the Toll Collect consortium,
which have been ongoing since 2004 and on July 6, 2018, the
arbitral tribunal issued an arbitration ruling on agreed terms
terminating the Toll Collect arbitration proceedings on the
basis of the settlement. The final operating permit for the toll
system was granted within the scope of the settlement.
As a result of the settlement, in the second quarter of 2018,
the profit/loss on equity-method investments in the Daimler
Mobility segment includes expenses of €418 million. The EBIT
of the Daimler Mobility segment was reduced in particular due
to the existing 50% obligation of Daimler Financial Services AG
to pay €550 million to Toll Collect GbR, which is partially offset
by provisions recognized in previous years. In the third quar-
ters of 2019 and 2018, Daimler Mobility AG recorded cash out-
flows of €200 million each. The last tranche of €150 million
will be paid in the third quarter of 2020. All known and unknown
claims from the toll agreement that arose until March 31, 2018
are settled under the settlement provided that the related
damage occurred before March 31, 2018.
Irrespective of the settlement, the guarantees relating to the
operating agreement or other additional agreements remain
unchanged. No guarantee claims have been made so far.
Accounting estimates and management judgments
The Group recognizes provisions in connection with pending
or threatened proceedings to the extent a loss is probable and
can be reasonably estimated. Such provisions are recognized
in the Group’s consolidated financial statements and are based
on estimates. If quantifiable, contingent liabilities in connec-
tion with legal proceedings are disclosed in the Group’s con-
solidated financial statements. Risks resulting from legal
proceedings sometimes cannot be assessed reliably or only to
a limited extent. Consequently, provisions recognized for some
legal proceedings may turn out to be insufficient once such
proceedings have ended. The Group may also become liable for
payments in legal proceedings for which no provisions were
recognized and/or contingent liabilities were disclosed. Uncer-
tainty exists with regard to the amounts or due dates of pos-
sible cash outflows. Although the final result of any such pro-
ceedings could materially affect Daimler’s operating results
and cash flows for a particular reporting period, Daimler believes
that it should not exert a sustained influence on the Group’s
financial position.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 287
32. Financial instruments
Carrying amounts and fair values of financial instruments
Table F.73 shows the carrying amounts and fair values
of the respective classes of the Group’s financial instruments.
The fair value of a financial instrument is the price that would
be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the
measurement date. Given the varying influencing factors, the
reported fair values can only be viewed as indicators
of the prices that may actually be achieved on the market.
The fair values of financial instruments were calculated on
the basis of market information available on the balance sheet
date. The following methods and premises were used:
F.73
Carrying amounts and fair values of financial instruments
In millions of euros
Financial assets
Receivables from financial services
Trade receivables
Cash and cash equivalents
Marketable debt securities and similar investments
Recognized at fair value through other comprehensive income
Recognized at fair value through profit or loss
Measured at cost
Other financial assets
Equity instruments and debt instruments
Recognized at fair value through other comprehensive income
Recognized at fair value through profit or loss
Other financial assets recognized at fair value through profit or loss
Derivative financial instruments used in hedge accounting
Other receivables and miscellaneous other financial assets
Financial liabilities
Financing liabilities
Trade payables
Other financial liabilities
Financial liabilities recognized at fair value through profit or loss
Derivative financial instruments used in hedge accounting
Miscellaneous other financial liabilities
Contract and refund liabilities
Obligations from sales transactions
At December 31, 2019
At December 31, 2018
Carrying
amount
Fair value Carrying amount
Fair value
103,661
104,930
12,332
18,883
8,655
5,323
2,858
474
860
482
378
27
1,191
3,328
12,332
18,883
8,655
5,323
2,858
474
860
482
378
27
1,191
3,328
96,740
12,586
15,853
9,577
5,855
3,059
663
748
364
384
109
1,033
3,177
97,144
12,586
15,853
9,577
5,855
3,059
663
748
364
384
109
1,033
3,177
148,937
150,206
139,823
140,227
157,540
12,707
159,288
12,707
144,902
14,185
144,933
14,185
52
1,186
8,491
52
1,186
8,491
56
1,094
8,844
56
1,094
8,844
5,200
185,176
5,200
186,924
4,931
174,012
4,931
174,043
288 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Receivables from financial services
The fair values of receivables from financial services with
variable interest rates are estimated to be equal to the respec-
tive carrying amounts, because the agreed upon interest
rates and those available in the market do not significantly differ.
The fair values of receivables from financial services with
fixed interest rates are determined on the basis of discounted
expected future cash flows.
The discounting is based on the current interest rates at which
similar loans with identical terms could have been obtained at
December 31, 2019 and December 31, 2018.
Trade receivables and cash and cash equivalents
Due to the short terms of these financial instruments and
the fundamentally lower credit risk, it is assumed that their fair
values are equal to the carrying amounts.
Marketable debt securities and similar investments,
other financial assets
Marketable debt securities are recognized at fair value through
other comprehensive income or at fair value through profit
or loss. Similar investments are measured at amortized cost and
are not included in the measurement hierarchy, as their
carrying amount is a reasonable approximation of fair value
due to the short terms of these financial instruments and
the fundamentally lower credit risk.
Equity Instruments are recognized at fair value through other
comprehensive income or at fair value through profit or loss.
The fair values of the equity instruments recognized through
other comprehensive income are included in table F.73 and
comprise Sila Nanotechnologies Inc., BAIC BluePark New
Energy Technology Co., Ltd as well as further investments not
material on an individual basis. Daimler does not generally
intend to sell its equity instruments which are presented at
December 31, 2019.
Marketable debt securities and equity instruments recognized
at fair value were measured using quoted market prices at
the end of the reporting period. If quoted market prices were
not available for these debt and equity instruments, fair
value measurement is based on inputs that are either directly
or indirectly observable in active markets. Fair values are
calculated using recognized financial valuation models such as
discounted cash-flow models or multiples.
Other financial assets recognized at fair value through profit or
loss include derivative financial instruments not used in hedge
accounting. These financial instruments as well as derivative
financial instruments used in hedge accounting comprise:
– derivative currency hedging contracts; the fair values of cross
currency interest rate swaps are determined on the basis
of the discounted estimated future cash flows (taking account
of credit premiums and default risks) using market interest
rates appropriate to the remaining terms of the financial
instruments. The valuation of currency forwards is based on
market quotes of forward curves; currency options are
measured with option-pricing models using market data.
– derivative interest rate hedging contracts; the fair values
of interest rate hedging instruments (e.g. interest rate swaps)
are calculated on the basis of the discounted estimated
future cash flows (taking account of credit premiums and
default risks) using the market interest rates appropriate
to the remaining terms of the financial instruments.
– derivative commodity hedging contracts; the fair values
of commodity hedging contracts (e.g. commodity forwards)
are determined on the basis of current reference prices
with consideration of forward premiums and discounts and
default risks.
Other financial receivables and other financial assets are
carried at amortized cost. Because of the predominantly short
maturities of these financial instruments, it is assumed that
the fair values approximate the carrying amounts.
Financing liabilities
The fair values of bonds, loans, commercial paper, deposits in
the direct banking business and liabilities from ABS transac-
tions are calculated as present values of the estimated future
cash flows (taking account of credit premiums and credit
risks). Market interest rates for the appropriate terms are used
for discounting.
Trade payables
Due to the short maturities of these financial instruments,
it is assumed that their fair values are equal to the carrying
amounts.
Contract and refund liabilities
Contract and refund liabilities include obligations from sales
transactions that qualify as financial instruments. Obligations
from sales transactions should generally be regarded as short
term. Due to the short maturities of these financial instru-
ments, it is assumed that their fair values are equal to their
carrying amounts.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 289
Other financial liabilities
Financial liabilities recognized at fair value through profit or loss
comprise derivative financial instruments not used in hedge
accounting. For information regarding these financial instruments
as well as derivative financial instruments used in hedge
accounting, see the notes above under marketable debt securi-
ties and similar investments, other financial assets.
Miscellaneous other financial liabilities are carried at amortized
cost. Because of the predominantly short maturities of these
financial instruments, it is assumed that the fair values approx-
imate the carrying amounts.
Offsetting of financial instruments
The Group concludes derivative transactions in accordance
with the master netting arrangements (framework agreement)
of the International Swaps and Derivatives Association (ISDA)
and comparable national framework agreements. However,
these arrangements do not meet the criteria for netting in the
Consolidated Statement of Financial Position, as they allow
netting only in the case of future events such as default or
insolvency on the part of the Group or the counterparty.
Table F.74 shows the carrying amounts of the derivative
financial instruments subject to the described arrangements
as well as the possible financial effects of netting in accor-
dance with the master netting arrangements.
Measurement hierarchy
Table F.75 provides an overview of the classification into
measurement hierarchies of financial assets and liabilities rec-
ognized at fair value (according to IFRS 13).
At the end of each reporting period, Daimler reviews the
necessity of reclassification between the measurement hierar-
chies.
For the determination of the credit risk from derivative finan-
cial instruments which are allocated to Level 2 measurement
hierarchy, portfolios managed on basis of net exposure are
applied.
Table F.76 shows into which measurement hierarchies
(according to IFRS 13) the fair values of the financial assets
and liabilities are classified which are not recognized at
fair value in the Consolidated Statement of Financial Position.
F.74
Disclosure for recognized financial instruments that are subject to an enforceable master netting arrangement or similar agreement
At December 31, 2019
At December 31, 2018
Gross and net
amounts of finan-
cial instruments in
the Consolidated
Statement of
Financial Position
Amounts
subject to a
master netting
arrangement
Gross and net
amounts of finan-
cial instruments in
the Consolidated
Statement of
Financial Position
Amounts
subject to a
master netting
arrangement
Net amounts
Net amounts
1,218
1,238
-542
-542
676
696
1,142
1,150
-574
-574
568
576
In millions of euros
Other financial assets1
Other financial liabilities2
1 The other financial assets which are subject to a master netting arrangement comprise derivative financial instruments that are included in hedge
accounting and financial assets recognized at fair value through profit or loss (see Note 16).
2 The other financial liabilities which are subject to a master netting arrangement comprise derivative financial instruments that are included in hedge
accounting and financial liabilities recognized at fair value through profit or loss (see Note 25).
290 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.75
Measurement hierarchy of financial assets and liabilities recognized at fair value
Total
Level 11
At December 31, 2019
Level 33
Level 22
Total
Level 11
At December 31, 2018
Level 33
Level 22
In millions of euros
Financial assets recognized at fair value
Marketable debt securities
8,181
5,254
2,927
Recognized at fair value through
other comprehensive income
Recognized at fair value through
profit or loss
Equity instruments and debt instruments
Recognized at fair value through
other comprehensive income
Recognized at fair value through
profit or loss
Other financial assets recognized
at fair value through profit or loss
Derivative financial instruments
used in hedge accounting
Financial liabilities recognized at fair value
Financial liabilities recognized at fair value
through profit or loss
Derivative financial instruments
used in hedge accounting
5,323
2,396
2,927
2,858
860
482
378
27
1,191
10,259
52
1,186
1,238
2,858
275
205
70
–
–
5,529
–
–
–
–
270
158
112
27
1,191
4,415
52
1,186
1,238
–
–
–
315
119
196
–
–
315
–
–
–
8,914
5,812
3,102
5,855
2,753
3,102
3,059
748
3,059
338
364
384
109
1,033
10,804
56
1,094
1,150
208
130
–
–
6,150
–
–
–
–
304
128
176
109
1,033
4,548
56
1,094
1,150
–
–
–
106
28
78
–
–
106
–
–
–
1 Fair value measurement is based on quoted prices (unadjusted) in active markets for these or identical assets or liabilities.
2 Fair value measurement is based on inputs that are observable on active markets either directly (i.e. as prices) or indirectly (i.e. derived from prices).
3 Fair value measurement is based on inputs for which no observable market data is available.
F.76
Measurement hierarchy of financial assets and liabilities not recognized at fair value
Total
Level 11
At December 31, 2019
Level 33
Level 22
Total
Level 11
At December 31, 2018
Level 33
Level 22
In millions of euros
Fair values of financial assets
measured at cost
Receivables from financial services
104,930
–
104,930
Fair values of financial liabilities
measured at cost
Financing liabilities
thereof bonds
thereof liabilities from ABS transactions
thereof other financing liabilities
159,288
87,139
14,024
58,125
66,203
65,187
1,016
–
93,085
21,952
13,008
58,125
–
–
–
–
–
97,144
–
97,144
144,933
76,468
12,474
55,991
62,961
62,862
99
–
81,972
13,606
12,375
55,991
–
–
–
–
–
1 Fair value measurement is based on quoted prices (unadjusted) in active markets for these or identical assets or liabilities.
2 Fair value measurement is based on inputs that are observable on active markets either directly (i.e. as prices) or indirectly (i.e. derived from prices).
3 Fair value measurement is based on inputs for which no observable market data is available.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 291
Measurement categories
The carrying amounts of financial instruments according to
measurement categories are shown in table F.77.
F.77
Carrying amounts of financial instruments according to mea-
surement categories
The table F.77 does not include the carrying amounts
of derivative financial instruments used in hedge accounting as
these financial instruments are not assigned to a measure-
ment category.
In millions of euros
Assets
Net gains or losses
Table F.78 shows the net gains/losses on financial
instruments included in the Consolidated Statement of Income
(excluding derivative financial instruments used in hedge
accounting).
Net gains/losses on equity and debt instruments recognized at
fair value through profit or loss primarily comprise gains
and losses attributable to changes in the fair values of these
instruments, among others the fair value change of our
equity interest in Aston Martin Lagonda Global Holdings plc.
Net gains/losses on other financial assets and liabilities
recognized at fair value through profit or loss comprise gains
and losses attributable to changes in their fair values.
Net gains/losses on equity instruments recognized at fair
value through other comprehensive income primarily comprise
dividend payments.
Net gains/losses on other financial assets recognized at
fair value through other comprehensive income are primarily
attributable to the effects of currency translation.
Net gains/losses on financial assets measured at (amortized)
cost (without the interest income/expense shown below)
primarily comprise impairment losses (including reversals of
impairment losses) of €551 million (2018: €407 million)
that are charged to cost of sales, selling expenses and other
financial income/expense, net. Foreign currency gains
and losses are also included.
Net gains/losses on financial liabilities measured at (amor-
tized) cost (without the interest income/expense shown below)
primarily comprise the effects of currency translation.
At December 31,
2019
2018
108,344
102,359
73,327
12,332
18,883
70,080
12,586
15,853
474
663
3,328
3,177
5,805
6,219
5,323
482
5,855
364
3,263
3,552
2,858
378
3,059
384
27
109
183,831
172,391
12,707
14,185
157,540
144,555
8,384
5,200
8,720
4,931
52
56
Financial assets measured at (amortized) cost
Receivables from financial services1
Trade receivables
Cash and cash equivalents
Marketable debt securities and
similar investments
Other receivables and miscellaneous
other financial assets
Financial assets recognized at fair value
through other comprehensive income
Marketable debt securities and
similar investments
Equity and debt instruments
Financial assets recognized at fair value
through profit or loss
Marketable debt securities and
similar investments
Equity and debt instruments
Other financial assets recognized
at fair value through profit or loss2
Liabilities
Financial liabilities measured
at (amortized) cost
Trade payables
Financing liabilities3
Miscellaneous other financial liabilities4
Obligations from sales transactions
Financial liabilities recognized at fair value
through profit or loss2
1 This does not include lease receivables of €30,334 million
(2018: €26,660 million) as these are not assigned to a measure-
ment category.
2 Financial instruments classified as held for trading purposes.
These figures comprise financial instruments that are not used in
hedge accounting.
3 This does not include liabilities from lease transactions of
€4,240 million (2018: liabilities from finance leases of €347 million)
as these are not assigned to a measurement category.
4 This does not include liabilities from financial guarantees of
€107 million (2018: €124 million) as these are not assigned to a
measurement category.
292 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Total interest income and total interest expense
Total interest income and total interest expense for financial
assets or financial liabilities that are not recognized at
fair value through profit or loss are shown in table F.79.
See E Note 1 for qualitative descriptions of accounting for
and presentation of financial instruments (including derivative
financial instruments).
Information on derivative financial instruments
Use of derivatives
The Group uses derivative financial instruments exclusively for
hedging financial risks that arise from its operating or financing
activities or from its liquidity management. These are mainly
interest rate risks, currency risks and commodity price risks,
which were defined as risk categories. For these hedging
purposes, the Group mainly uses currency forward transactions,
cross currency interest rate swaps, interest rate swaps,
options and commodity forwards.
Table F.80 shows the amounts for the transactions
designated as hedging instruments.
F.78
Net gains/losses
In millions of euros
Equity and debt instruments recognized
at fair value through profit or loss
Other financial assets and financial
liabilities recognized at fair value through
profit or loss1
Equity instruments recognized at fair value
through other comprehensive income
Other financial assets recognized at fair
value through other comprehensive income
Financial assets measured
at (amortized) cost
Financial liabilities measured
at (amortized) cost
2019
2018
-79
136
-150
3
3
-493
204
240
2
-17
-469
105
1 Financial instruments classified as held for trading; these
amounts relate to financial instruments that are not used in
hedge accounting.
F.79
Total interest income and total interest expense
In millions of euros
Total interest income
thereof from financial assets and liabilities
measured at (amortized) costs
thereof from financial assets recognized
at fair value through other comprehensive
income
Total interest expense
thereof from financial assets and liabilities
measured at (amortized) costs
thereof from financial assets recognized
at fair value through other comprehensive
income
2019
2018
5,876
5,189
5,719
5,100
157
-3,550
89
-3,171
-3,550
-3,171
–
–
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 293
F.80
Amounts for the transactions designated as hedging instruments
In millions of euros
December 31, 2019
Carrying amount of the hedging instruments
Other financial assets current
Other financial assets non-current
Other financial liabilities current
Other financial liabilities non-current
Financial liabilities current
Fair value changes3
December 31, 2018
Carrying amount of the hedging instruments
Other financial assets current
Other financial assets non-current
Other financial liabilities current
Other financial liabilities non-current
Financial liabilities current
Fair value changes3
Foreign currency risk
Interest rate risk
Commodity risk
Hedges of
net investments
in foreign
operations
Cash flow
hedges1
Cash flow
hedges1
Fair value
hedges2
Cash flow
hedges1
76
64
817
147
–
-1,558
366
86
425
161
–
-1,021
–
–
–
–
–
-1
–
–
–
–
25
1
10
20
72
94
–
-204
58
59
15
41
–
-18
62
907
8
46
–
848
57
364
163
237
–
122
37
15
2
–
–
113
43
–
30
22
–
-41
1 Includes the following instrument types: currency forwards, currency options, currency swaps, commodity forwards.
2 Includes the following instrument types: interest rate swaps, cross currency interest rate swaps.
3 Gains and losses from hedging instruments used for recognizing hedge ineffectiveness.
294 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.81
Fair Value Hedges
In millions of euros
Fair value hedges
The Group uses fair value hedges primarily for hedging interest
rate risks.
Interest rate risk
2019
2018
The amounts of the items hedged with fair value hedges are
included in table F.81.
Carrying amounts of the hedged items
Financing liabilities current
Financing liabilities non-current
thereof hedge adjustments
Financing liabilities current
Financing liabilities non-current
Fair value changes of the hedged items1
Accumulated amount of hedge adjustments
from inactive hedges remaining in the
statement of financial position
13,831
28,407
14,217
29,086
461
478
-846
-72
100
-121
-40
23
1 Fair value changes of the hedged items used for recognizing hedge
ineffectiveness.
The amounts relating to hedge ineffectiveness for items
designated as fair value hedges are shown in table F.82.
Cash flow hedges and hedges of net investments in
foreign operations
The Group uses cash flow hedges for hedging currency risks,
interest rate risks and commodity price risks.
Daimler also partially hedges the foreign currency risk of
selected investments with the application of derivative or non-
derivative financial instruments.
The amounts related to items designated as cash flow hedges
and as hedges of net investments in foreign operations are
shown in table F.83.
F.82
Ineffectiveness of fair value hedges
Interest rate risk
2019
2018
The gains and losses on items designated as cash flow
hedges as well as the amounts relating to hedge ineffective-
ness are included in table F.84.
In millions of euros
Cost of sales
Interest expense
–
2
–
2
F.83
Cash flow hedges and hedges of net investments in foreign operations
In millions of euros
Fair value changes of the hedged items1
Thereof hedges of net investments in foreign operations
Balance of the reserves for derivative financial instruments
(before taxes)
Continuing hedges
Thereof hedges of currency risks in the automotive business2
Thereof hedges of net investments in foreign operations
Discontinued/terminated hedges
Thereof hedges of net investments in foreign operations
Foreign
currency risk
Interest
rate risk
Commodity
risk
Foreign
currency risk
Interest
rate risk
Commodity
risk
2019
2018
1,533
1
-745
-401
–
-271
-270
204
-115
-78
–
-3
53
-17
–
1,024
-1
-91
–
4
-311
-270
83
39
-4
–
-4
9
–
–
1 Fair value changes of the hedged items used for recognizing hedge ineffectiveness.
2 De-designation and re-designation of hedging instruments at January 1, 2019, differentiated for Mercedes-Benz Cars/Mercedes-Benz Vans and
Daimler Trucks/Daimler Buses. Further information is provided in the section related to exchange rate risk in Note 33.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 295
F.84
Gains and losses on cash flow hedges and hedges of net investments in foreign operations
In millions of euros
Line item in the Statement of Income
in which the ineffectiveness
and the reclassifications are included
2019
Gains and losses recognized in other comprehensive income1
Hedge ineffectiveness recognized in the Statement of Income
Reclassification of hedge effectiveness from other comprehensive
income to the Statement of Income
For hedges for which the hedged future cash flows
are no longer expected to occur
For hedges that have been transferred because
the hedged item has affected profit or loss2
2018
Gains and losses recognized in other comprehensive income1
Hedge ineffectiveness recognized in the Statement of Income
Reclassification of hedge effectiveness from other comprehensive
income to the Statement of Income
For hedges for which the hedged future cash flows
are no longer expected to occur
For hedges that have been transferred because
the hedged item has affected profit or loss2
Foreign currency risk
Interest rate risk
Commodity
risk
Revenues
Cost
of sales
Other
financial
income/
expense,
net
Cost
of sales
Interest
expense
Cost
of sales
-1,414
-27
13
791
-1,159
2
-8
-533
+2
–
–
–
56
–
–
–
-121
–
-84
–
-120
–
114
-1
–
118
82
–
–
-91
–
43
-70
–
–
55
1
84
53
–
1
-63
-2
–
-40
-1
-1
-73
1 The amount in other financial income/expense, net includes minus €1 million (2018: €1 million) for hedges of net investments in foreign operations.
2 The amount in other financial income/expense, net includes minus €3 million (2018: minus €10 million) for hedges of net investments in foreign
operations.
296 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.85
Reconciliation of reserves for derivative financial instruments
In millions of euros
Balance at January 1, 2018
Changes in fair values (before taxes)
Foreign currency risk
Interest rate risk
Commodity price risk – inventory purchases
Reclassification to profit and loss (before taxes)
Foreign currency risk
Interest rate risk
Reclassification to cost of acquisition of non-financial
assets (before taxes)
Foreign currency risk – procurement
Commodity price risk – inventory purchases
Other
Taxes on changes in fair values and reclassifications
Balance at December 31, 2018
Changes in fair values (before taxes)
Foreign currency risk
Interest rate risk
Commodity price risk – inventory purchases
Reclassification to profit and loss (before taxes)
Foreign currency risk
Interest rate risk
Reclassification to cost of acquisition of non-financial
assets (before taxes)
Foreign currency risk – procurement
Commodity price risk – inventory purchases
Other
Taxes on changes in fair values and reclassifications
Balance at December 31, 2019
1,171
-1,081
-1,023
-18
-40
-641
-634
-7
-81
-63
-18
–
537
-95
-1,616
-1,533
-197
114
1,050
922
128
-71
-3
-68
–
186
-546
Table F.85 shows the reconciliation of the reserves for
derivative instruments (excluding reserves for hedges of net
investments in foreign operations).
The reserves for derivative instruments include reserves for
hedge costs of €0 million (2018: minus €11 million).
At December 31, 2019, the balance of reserves for hedges of
net investments in foreign operations amounted to €189 million
(2018: €187 million).
The maturities of the interest rate hedges and cross currency
interest rate hedges as well as of the commodity hedges
correspond with those of the underlying transactions. The real-
ization of the underlying transactions of the cash flow hedges
is expected to correspond with the maturities of the hedging
transactions shown in table F.86.
At December 31, 2019, Daimler utilized derivative instruments
with a maximum maturity of 48 months (2018: 34 months)
as hedges for currency risks arising from future transactions.
Nominal values of derivative financial instruments
Table F.86 shows the nominal values of derivative financial
instruments entered into for the purpose of hedging currency
risks, interest rate risks and commodity price risks that arise
from the Group’s operating and/or financing activities.
The average prices for derivative financial instruments
classified by risk categories for the main risks are included in
table F.87.
Hedging transactions for which the effects from the measure-
ment of the hedging instrument and the underlying transaction
to a large extent offset each other in the Consolidated State-
ment of Income mostly do not classify for hedge accounting.
Even if derivative financial instruments do not or no longer
qualify for hedge accounting, these instruments are still hedg-
ing financial risks from the operating business. A hedging
instrument is terminated when the hedged item no longer exists
or is no longer expected to occur.
Explanations of the hedging of exchange rate risks,
interest rate risks and commodity price risks can be found in
E Note 33 in the sub-item finance market risk.
F.86
Nominal amounts of derivative financial instruments
In millions of euros
Foreign currency risk
Interest rate risk
Fair value hedges
Cash Flow Hedges
Commodity risk
At December 31, 2019
Maturity of nominal amounts
<1 year
1 year up to
5 years
>5 years
Total
<1 year
At December 31, 2018
Maturity of nominal amounts
1 year up to
5 years
>5 years
Total
26,945
20,421
12,653
7,768
259
10,877
42,215
29,805
12,410
140
–
7,654
7,654
–
–
37,822
70,290
50,112
20,178
399
29,063
15,926
6,173
9,753
285
9,935
36,602
24,763
11,839
215
–
12,055
12,055
–
–
38,998
64,583
42,991
21,592
500
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 297
33. Management of financial risks
General information on financial risks
As a result of its businesses and the global nature of its opera-
tions, Daimler is exposed in particular to market risks from
changes in foreign currency exchange rates and interest rates,
while commodity price risks arise from procurement. An equity
price risk results from investments in listed companies. In
addition, the Group is exposed to credit risks from its leasing
and financing activities and from its operating business (trade
receivables). Furthermore, the Group is exposed to liquidity
and country risks relating to its credit and market risks or a
deterioration of its operating business or financial market
disturbances. If these financial risks materialize, they could
adversely affect Daimler’s profitability, liquidity and capital
resources and financial position.
Daimler has established internal guidelines for risk controlling
procedures and for the use of financial instruments, including
a clear segregation of duties with regard to financial activities,
settlement, accounting and the related controlling. The guide-
lines upon which the Group’s risk management processes for
financial risks are based are designed to identify and analyze
these risks throughout the Group, to set appropriate risk limits
and controls and to monitor the risks by means of reliable
and up-to-date administrative and information systems. The
guidelines and systems are regularly reviewed and adjusted
to changes in markets and products.
The Group manages and monitors these risks primarily
through its operating and financing activities and, if required,
through the use of derivative financial instruments. Daimler
uses derivative financial instruments exclusively for hedging
financial risks that arise from its operating business or
refinancing activities. Without these derivative financial instru-
ments, the Group would be exposed to higher financial risks
(additional information on financial instruments and especially
on the volumes of the derivative financial instruments used is
included in E Note 32). Daimler regularly evaluates its finan-
cial risks with due consideration of changes in key economic
indicators and up-to-date market information.
Any market sensitive instruments including equity and debt
securities that the plan assets hold to finance pension and
other post-employment healthcare benefits are not included in
the following quantitative and qualitative analysis. See
E Note 22 for additional information on Daimler’s pension
and other post-employment benefits.
Credit risk
Credit risk is the risk of economic loss arising from counter-
party’s failure to repay or service debt in accordance with
the contractual terms. Credit risk encompasses both the direct
risk of default and the risk of a deterioration of creditworthi-
ness as well as concentration risks.
F.87
Average prices of hedging instruments for the major risks
Foreign currency risk
USD per €
CNY per €
GBP per €
Interest rate risk
Fair value hedges
Average interest rate – €
Average interest rate – USD
Cash flow hedges
Average interest rate – €
Average interest rate – USD
Commodity risk
Platinum (in € per troy ounce)
Palladium (in € per troy ounce)
Aluminum (in € per ton)
At December 31,
2019
2018
1.17
8.14
0.88
1.18
8.37
0.88
-0.92 %
-0.21 %
-0.84 %
-0.57 %
814
1,245
-0.82 %
0.46 %
-0.59 %
-0.07 %
819
688
–
1,606
The maximum risk positions of financial assets which are gen-
erally subject to credit risk are equal to their carrying amounts
(without consideration of collateral, if available). There is also
a risk of default from irrevocable loan commitments which had
not been utilized as of that date, as well as from financial
guarantees. The maximum risk position in these cases is equal
to the expected future cash outflows. Table F.88 shows
the maximum risk positions.
Liquid assets
Liquid assets consist of cash and cash equivalents and market-
able debt securities and similar investments. With the invest-
ment of liquid assets, banks and issuers of securities are selected
very carefully and diversified in accordance with a limit sys-
tem. Liquid assets are mainly held at financial institutions
within and outside Europe with high creditworthiness, as bonds
issued by German federal states and as money market funds.
In connection with investment decisions, priority is placed on
the borrower’s very high creditworthiness and on balanced risk
diversification. The limits and their utilizations are reassessed
continuously. In this assessment, Daimler also considers the
credit risk assessment of its counterparties by the capital mar-
kets. In line with the Group’s risk policy, most liquid assets
are held in investments with an external rating of “A” or better.
Liquid assets are thus not subject to a material credit risk
and are allocated to stage 1 of the impairment model, which is
based on expected credit risk.
298 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.88
Maximum risk positions of financial assets,
irrevocable loan commitments and financial guarantees
In millions of euros
Liquid assets
Receivables from
financial services
Trade receivables
Derivative financial instruments
used in hedge accounting
(assets only)
Derivative financial instruments
not used in hedge accounting
(assets only)
Other receivables and financial
assets
Irrevocable loan commitments
Financial guarantees
Maximum
risk
position
2019
Maximum
risk
position
2018
see also
Note
27,538
25,430
14
19
103,661
12,332
96,740
12,586
16
1,191
1,033
16
16
27
109
3,328
2,038
728
3,177
2,051
672
Receivables from financial services
Daimler’s financing and leasing activities are primarily focused
on supporting the sales of the Group’s automotive products.
As a consequence of these activities, the Group is exposed to
credit risk, which is monitored and managed based on defined
standards, guidelines and procedures. Daimler manages its
credit risk irrespective of whether it is related to a financing
contract or to an operating lease or a finance lease contract.
For this reason, statements concerning the credit risk of Daimler
Mobility refer to the entire financing and leasing business,
unless specified otherwise.
Exposure to credit risk from financing and lease activities is
monitored based on the portfolio subject to credit risk. The
portfolio subject to credit risk consists of wholesale and retail
receivables from financial services and the portion of the
operating lease portfolio that is subject to credit risk. Receiv-
ables from financial services comprise claims arising from
finance lease contracts and repayment claims from financing
loans. The operating lease portfolio is reported under equip-
ment on operating leases in the Group’s Consolidated Financial
Statements. Overdue lease payments from operating lease
contracts are recognized in receivables from financial services.
The Daimler Mobility segment has guidelines setting the
framework for effective risk management at a global as well as
a local level. In particular, these rules deal with minimum
requirements for all risk-relevant credit processes, the definition
of financing products offered, the evaluation of customer
quality, requests for collateral as well as the treatment of unse-
cured loans and non-performing claims. The limitation of
concentration risks is implemented primarily by means of global
limits, which refer to single customer exposures. As of
December 31, 2019, exposure to the biggest 15 customers did
not exceed 4.4% (2018: 3.8%) of the total portfolio.
With respect to its financing and lease activities, the Group
holds collateral for customer transactions limiting actual credit
risk through its fair value. The value of collateral generally
depends on the amount of the financed assets. The financed
vehicles usually serve as collateral. Furthermore, Daimler
Mobility limits credit risk from financing and lease activities,
for example through advance payments from customers.
For the assessment of the default risk of retail and small
business customers scoring systems are applied to evaluate
their creditworthiness. Corporate customers are evaluated
using internal rating instruments. Both evaluation processes
use external credit bureau data if available. The scoring and
rating results as well as the availability of security and other
risk mitigation instruments, such as advance payments,
guarantees and, to a lower extent, residual debt insurances,
are essential elements for credit decisions.
For information on credit risks included in receivables
from financial services, see E Note 14. Information on the
measurement of expected credit losses is provided in
E Note 1.
If, in connection with contracts, a worsening of payment behav-
ior or other causes of a credit risk are recognized, collection
procedures are initiated by claims management to obtain the
overdue payments of the customer, to take possession of
the asset financed or leased or, alternatively, to renegotiate the
impaired contract. Restructuring policies and practices are
based on the indicators or criteria which, in the judgment of
local management, indicate that repayment will probably
continue and that the total proceeds expected to be derived
from the renegotiated contract exceed the expected proceeds
to be derived from repossession and remarketing. For receiv-
ables from financial services, significant modifications of finan-
cial assets only occurred in rare cases and immaterial volume.
The allowance ratio increased compared to the low level of
the previous year.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 299
Trade receivables
Trade receivables are mostly receivables from worldwide sales
activities of vehicles and spare parts. The credit risk from
trade receivables encompasses the default risk of customers,
e.g. dealers and general distribution companies, as well as
other corporate and private customers. In order to identify credit
risks, Daimler assesses the creditworthiness of customers.
Daimler manages its credit risk from trade receivables using
appropriate IT applications and databases on the basis
of internal guidelines which have to be followed globally.
A significant part of the trade receivables from each country’s
domestic business is secured by various country-specific
types of collateral. This collateral includes conditional sales,
guarantees and sureties as well as mortgages and advance
payments from customers.
For trade receivables from export business, Daimler also evalu-
ates its customers’ creditworthiness by means of an internal
rating process under consideration of the respective country
risk. In this context, the year-end financial statements and
other relevant information on the general distribution companies
such as payment history are used and assessed.
Other receivables and financial assets
With respect to other receivables and financial assets
included in other financial assets in 2019 and 2018, Daimler
is exposed to credit risk only to a small extent.
Irrevocable loan commitments
The Daimler Mobility segment in particular is exposed to
credit risk from irrevocable loan commitments to retailers and
end customers. At December 31, 2019, irrevocable loan
commitments amounted to €2,038 million (2018: €2,051 million).
These loan commitments had a maturity of less than one
year and are not subject to a material credit risk.
Financial guarantees
The maximum potential obligations resulting from financial
guarantees amount to €728 million at December 31, 2019
(2018: €672 million) and include liabilities recognized at Decem-
ber 31, 2019 in the amount of €107 million (2018: €124 million).
Financial guarantees principally represent contractual arrange-
ments. These guarantees generally provide that in the event
of default or non-payment by the primary debtor, the Group will
be required to settle such financial obligations.
Depending on the creditworthiness of the customers,
Daimler usually establishes credit limits and limits credit risks
with the following types of collateral:
Liquidity risk comprises the risk that a company cannot meet
its financial obligations in full.
Liquidity risk
Daimler manages its liquidity by holding adequate volumes
of liquid assets and by maintaining syndicated credit facilities
in addition to the cash inflows generated by its operating
business. Additionally, the possibility to securitize receivables
of financial services business (ABS transactions) also reduces
the Group’s liquidity risk. Liquid assets comprise cash and
cash equivalents and marketable debt securities and similar
investments. The Group can dispose of these liquid assets
at short notice.
The funds raised are used to finance working capital and
capital expenditure as well as the cash needs of the lease and
financing business and unexpected liquidity needs. In accor-
dance with internal guidelines, the refunding of the lease and
financing business is generally carried out with matching
maturities so that financing liabilities have the same maturity
profile as the leased assets and the receivables from financial
services.
– credit insurances,
– first-class bank guarantees and
– letters of credit.
These procedures are defined in the export credit guidelines,
which have Group-wide validity.
For impairments of trade receivables, the simplified approach
is applied, whereby these receivables are allocated to stage 2.
Credit losses until maturity for these trade receivables are
recognized upon initial recognition.
Further information on trade receivables and the status of
impairments recognized is provided in E Note 19.
Derivative financial instruments
The Group uses derivative financial instruments exclusively for
hedging financial risks that arise from its operational business,
financing activities or liquidity management. Daimler manages
its credit risk exposure in connection with derivative financial
instruments through a limit system, which is based on the
review of each counterparty’s financial strength. This system
limits and diversifies the credit risk. As a result, Daimler is
exposed to credit risk only to a small extent with respect to its
derivative financial instruments. In accordance with the
Group’s risk policy, most derivatives are contracted with coun-
terparties which have an external rating of “A” or better.
300 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At December 31, 2019, liquidity amounted to €27.5 billion
(2018: €25.4 billion). In 2019, significant cash inflows resulted
from the operations of the industrial business. Furthermore,
a dividend payment from Beijing Benz Automotive Co., Ltd. had
a positive effect on liquidity. Cash outflows resulted in par-
ticular from investments in intangible assets and property, plant
and equipment, income taxes paid and a fine notice concluding
the administrative offense proceedings against Daimler AG.
At Daimler Mobility, cash outflows mainly resulted from the
portfolio growth of the leasing and sales finance activities
and from the merger of the mobility services of Daimler Group
and BMW Group. Cash inflows and outflows in connection
with the cash flow of the financing activities were also effective.
From an operating point of view, the management of the
Group’s liquidity exposures is centralized by a daily cash-pool-
ing process. This process enables Daimler to manage its
liquidity surplus and liquidity requirements according to the
actual needs of the Group and each subsidiary. The Group’s
short-term and mid-term liquidity management takes into
account the maturities of financial assets and financial liabilities
and estimates of cash flows from the operating business.
In general, Daimler makes use of a broad spectrum of financial
instruments to cover its funding requirements. Depending
on funding requirements and market conditions, Daimler issues
commercial paper, bonds, debt obligations and financial
instruments secured by receivables in various currencies. Bank
credit facilities are also used to cover financing requirements.
Potential downgrades of Daimler’s credit ratings could have a
negative impact on the Group’s financing. Since July 2018,
Daimler has a syndicated credit facility with a volume of €11 bil-
lion with a consortium of international banks at its disposal.
Exercising an optional extension of one year beyond the original
term grants additional financial flexibility for Daimler until
2024. The term can be extended for another year until 2025.
As of December 31, 2019, the credit line is still not utilized.
In addition, customer deposits at Mercedes-Benz Bank are
used as a further source of refinancing.
Table F.89 provides an overview of how the future liquidity
situation of the Group can be affected by the cash flows
from liabilities, financial guarantees and irrevocable loan com-
mitments as of December 31, 2019.
Information on the Group’s financing liabilities is also provided
in E Note 24.
F.89
Liquidity runoff for liabilities and financial guarantees1
In millions of euros
Financing liabilities2
thereof lease liabilities
Derivative financial instruments3
Trade payables4
Miscellaneous other financial liabilities excluding accrued
interest and liabilities from financial guarantees
Obligations from sales
Irrevocable loan commitments5
Financial guarantees6
Total
2020
2021
2022
2023
2024
≥ 2025
171,904
65,925
38,789
22,508
10,729
8,857
25,096
4,949
90
792
709
12,707
12,704
7,454
5,200
2,038
728
5,653
5,200
2,038
728
661
-48
2
788
–
–
–
540
-191
1
377
–
–
–
459
-121
–
261
–
–
–
382
-99
–
141
–
–
–
2,115
-160
–
234
–
–
–
200,121
92,957
39,531
22,695
10,869
8,899
25,170
1 The amounts were calculated as follows:
(a) If the counterparty can request payment at different dates, the liability is included on the basis of the earliest date on which Daimler
can be required to pay. The customer deposits of Mercedes-Benz Bank are mostly considered in this analysis to mature within the first year.
(b) The cash flows of floating interest financial instruments are estimated on the basis of forward rates.
2 The stated cash flows of financing liabilities consist of their undiscounted principal and interest payments.
3 The undiscounted sum of the net cash outflows of the derivative financial instruments is shown for the respective year. For individual periods,
this may also include negative cash flows from derivatives with an overall positive fair value.
4 The cash outflows of trade payables are undiscounted.
5 The maximum available amounts are stated.
6 The maximum potential obligations under the issued guarantees are stated. It is assumed that the amounts are due within the first year.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 301
Country risk
Country risk is the risk of economic loss arising from changes
of political, economic, legal or social conditions in the respec-
tive country, e.g. resulting from sovereign measures such as
expropriation or interdiction of foreign currency transfers.
Daimler is exposed to country risk mainly resulting from cross-
border funding or collateralization of Group companies and
customers, from investments in subsidiaries, associated com-
panies, joint ventures and joint operations as well as from
cross-border trade receivables. Country risks also arise from
cross-border cash deposits at financial institutions.
Daimler manages these risks via country exposure limits
(e.g. for hard currency portfolios of financial services entities)
and via insurance of equity investments in high-risk countries.
An internal rating system serves as a basis for Daimler’s risk-
oriented country exposure management; it assigns all countries
to risk classes, with consideration of capital market indica-
tions of country risks.
Finance market risks
The global nature of its businesses exposes Daimler to
significant market risks resulting from fluctuations in foreign
currency exchange rates, interest rates and commodity
prices. The Group is also exposed to equity price risk in con-
nection with its investments in listed companies.
Daimler manages market risks to minimize the impact of
fluctuations in foreign exchange rates, interest rates and com-
modity prices on the earnings of the Group and its segments.
The Group calculates its overall exposure to these market risks
to provide the basis for hedging decisions, which include
the selection of hedging instruments and the determination of
hedging volumes and the corresponding periods. The hedging
strategy is specified at Group level and implemented in the
segments according to the respective risk volumes. Decisions
regarding the management of market risks from foreign
exchange rates and commodities, as well as asset-/liability
management (interest rates) are regularly made by the relevant
Daimler risk management committees. Exposures are the
basis for the hedging strategies and are updated regularly.
Certain existing benchmark interest rates including those
of the London Interbank Offer Rate (for USD, GBP, CHF and
JPY) will be comprehensively and internationally reformed
by the end of 2021. As a result, those interest rates will be
gradually abolished and replaced with alternative risk-free
reference rates. Alternative interest rates are being developed
on a national level in the context of the respective legal
systems and currencies; they can therefore vary with regard to
their structure, methodology and period of publication.
The effect of the application of the new interest rates on the
consolidated financial statements is currently being reviewed.
In order to conduct financial transactions based on the new
indices, Daimler is preparing its IT-systems accordingly. Market
uncertainty still exists about when the new interest rates will
be available, how they will be calculated and how their applica-
tion will affect financial transactions. Daimler regularly dis-
cusses current developments of alternative risk-free interest
rates with its international banking partners.
As part of its risk management system, Daimler employs
value at risk analyses. In performing these analyses, Daimler
quantifies its market risk due to changes in foreign currency
exchange rates and interest rates and certain commodity prices
on a regular basis by predicting the potential loss over a target
time horizon (holding period) and confidence level.
The value at risk calculations employed:
– express potential losses in fair values, and
– assume a 99% confidence level and a holding period of five
days.
At the Group level, Daimler calculates the value at risk for
exchange rate and interest rate risk according to the variance-
covariance approach. The value at risk calculation method
for commodity hedging instruments is based on a Monte Carlo
simulation.
When calculating value at risk using the variance-covariance
approach, Daimler first computes the current market value of
the Group’s financial instruments portfolio. Then the sensitivity
of the portfolio value to changes in the relevant market risk
factors, such as particular foreign currency exchange rates or
interest rates of specific maturities, is quantified. Based on
volatilities and correlations of these market risk factors, which
are obtained from the RiskMetrics™ dataset, a statistical
distribution of potential changes in the portfolio value at the
end of the holding period is computed. The loss which is
reached or exceeded with a probability of only 1% can be derived
from this calculation and represents the value at risk.
The Monte Carlo simulation uses random numbers to generate
possible changes in market risk factors consistent with current
market volatilities. The changes in market risk factors allow
the calculation of a possible change in the portfolio value over
the holding period. Running multiple iterations of this simula-
tion leads to a distribution of portfolio value changes. The value
at risk can be determined based on this distribution as the
portfolio value loss which is reached or exceeded with a proba-
bility of 1%.
302 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Exchange rate risk
Transaction risk and currency risk management. The global
nature of Daimler’s businesses exposes cash flows and earnings
to risks arising from fluctuations in exchange rates. These
risks primarily relate to fluctuations between the euro and the
US dollar, the Chinese renminbi, the British pound and other
currencies such as currencies of growth markets. In the oper-
ating vehicle business, the Group’s exchange rate risk primarily
arises when revenue is generated in a currency that is different
from the currency in which the costs of revenue is converted
into the currency in which the costs are incurred, it may be
inadequate to cover the costs if the value of the currency in which
the revenue is generated declined in the interim relative to
the value of the currency in which the costs were incurred. This
risk exposure primarily affects Mercedes-Benz Cars/Mercedes-
Benz Vans, which generate a major portion of their revenue in
foreign currencies and incur manufacturing costs primarily
in euros. Daimler Trucks/Daimler Buses are also exposed to
transaction risks, but only to a minor degree because of
their global production network. The exposures of these seg-
ments serve as a basis for analyzing exchange rate risks
at Group level. In addition, the Group is indirectly exposed to
transaction risk from its equity-method investments.
The Group’s overall currency exposure is reduced by natural
hedging, which consists of the currency exposures of the busi-
ness operations of individual segments partially offsetting
each other at Group level. These natural hedges eliminate the
need for hedging to the extent of the matched exposures. To
provide an additional natural hedge against any remaining
transaction risk exposure, Daimler generally strives to increase
cash outflows in the same currencies in which the Group has
a net excess inflow.
In order to mitigate the impact of currency exchange rate fluc-
tuations for the operating business (future transactions),
Daimler continually assesses its exposure to exchange rate
risks and hedges a portion of those risks by using derivative
financial instruments. Daimler’s Foreign Exchange Committee
(FXCo) manages the Group’s exchange rate risk and its hedging
transactions through currency derivatives. The FXCo consists
of representatives of the relevant segments and central func-
tions. The Corporate Treasury department aggregates foreign
currency exposures from Daimler’s subsidiaries and operative
units and implements the FXCo’s decisions concerning foreign
currency hedging through transactions with international finan-
cial institutions. For reporting purposes and accounting for
hedge relationships, those hedges are allocated to Mercedes-
Benz Cars/Mercedes-Benz Vans and Daimler Trucks/Daimler
Buses. Suitable measures are generally taken without delay
to eliminate any over-hedging at Group level regarding hedging
transactions caused by changes in exposure. In the case of
over hedges at the level of Mercedes-Benz Cars/Mercedes-
Benz Vans or Daimler Trucks/Daimler Buses, designated hedg-
ing relations are reviewed with respect to any requirements
to discontinue hedge accounting.
Risk Controlling regularly informs the Board of Management of
the actions taken by Corporate Treasury based on the FXCo’s
decisions.
The Group’s targeted hedge ratios for forecasted operating
cash flows in foreign currency are indicated by a reference
model. On the one hand, the hedging horizon is naturally limited
by uncertainty related to cash flows that lie far in the future;
on the other hand, it may also be limited by the fact that appro-
priate currency contracts are not available. This reference
model aims to limit risks for the Group from unfavorable move-
ments in exchange rates while preserving some flexibility to
participate in favorable developments. Based on this reference
model and depending on the market outlook, the FXCo deter-
mines the hedging horizon, which usually varies from one to five
years, as well as the average hedge ratios. Reflecting the
character of the underlying risks, the hedge ratios decrease with
increasing maturities. At year-end 2019, foreign exchange
management showed an unhedged position in the automotive
business in calendar year 2020 for the underlying forecasted
cash flows in US dollars of 27%, for the underlying forecasted
cash flows in Chinese renminbi of 40% and for the underlying
forecasted cash flows in British pounds of 26%.
The hedged position of the operating vehicle businesses is
influenced by the amount of derivative currency contracts held.
The derivative financial instruments used to cover foreign
currency exposure are primarily forward foreign exchange con-
tracts and currency options. Daimler’s guidelines call for a
mixture of these instruments depending on the assessment of
market conditions. Value at risk is used to measure the
exchange rate risk inherent in these derivative financial instru-
ments.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 303
F.90
Value at risk for exchange rate risk, interest rate risk and commodity price risk
Period-end
High
Low
Average
Period-end
High
Low
Average
2019
2018
In millions of euros
Exchange rate risk
(from derivative financial instruments)
Interest rate risk
Commodity price risk
(from derivative financial instruments)
333
131
18
528
156
25
333
34
17
422
94
21
568
26
14
695
45
23
568
26
14
633
36
18
Table F.90 shows the period-end, high, low and average
value at risk figures of the exchange rate risk for the 2019 and
2018 portfolios of derivative financial instruments, which
were entered into primarily in connection with the operative
vehicle businesses. Average exposure has been computed
on an end-of-quarter basis. The offsetting transactions under-
lying the derivative financial instruments are not included in
the following value at risk presentation. See also table F.86.
Hedge accounting. When designating derivative financial
instruments, a hedge ratio of 1 is applied. In addition, the
respective volume and currency of the hedge and the underly-
ing transaction as well as maturity dates are matched. The
Group ensures an economic relationship between the underly-
ing transaction and the hedging transaction by ensuring
consistency of currency, volume and maturity. In the case of
options for currency hedging, the option premium is not
designated into the hedge relationship, but the hedging costs
are deferred in other comprehensive income and recognized
in profit or loss at the due date of the underlying transaction.
The effectiveness of the hedge is assessed at the beginning
and during the economic relationship. Possible sources of inef-
fectiveness of the hedge relationship are:
– Effects of the credit risk on the fair value of the used
derivative instrument which is not reflected in the change of
the hedged currency risk.
– Changes in the timing of the hedged transactions.
Until year-end 2018, the designation of hedge relationships
for a specific currency and maturity had no further differentia-
tion in respect of the expected cash flows by segment. In
the context of focusing on the divisional perspective, the des-
ignation of hedge relationships for foreign currency risk
existing from the Group perspective from expected future cash
flows from business operations, primarily from vehicle sales,
have been assigned to Mercedes-Benz Cars/Mercedes-Benz
Vans and to Daimler Trucks/Daimler Buses starting with
2019. Accordingly, the documentation required under IFRS with
regard to this further differentiation of expected cash flows
(i.e. the risk management objectives) has been revised for a
large proportion of the already designated hedge relationships
for foreign currency risk, although there has been no change
in the overall Group risk management strategy for foreign cur-
rency risk. Pursuant to the described methods applied in
preparation of the financial statements, this results in the for-
mal discontinuation and immediate redesignation of existing
hedge relationships according to the revised differentiation. The
accumulated hedging gains/losses subject to redesignation
as of December 31, 2018 remained in the other reserves for
derivative financial instruments because the hedged future
cash flows are still expected to occur. Further information can
be found in table F.83. There were no material effects in
2019.
304 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In 2019, the development of the value at risk from foreign
currency hedging was mainly driven by decreases in foreign
currency rate volatilities and hedge volumes.
The Group’s investments in liquid assets or refinancing activi-
ties are generally selected so that possible currency risks are
minimized. Transaction risks arising from liquid assets or pay-
ables in foreign currencies that result from the Group’s
investment or refinancing on money and capital markets are
generally hedged against currency risks at the time of invest-
ing or refinancing in accordance with Daimler’s internal guide-
lines. The Group uses appropriate derivative financial
instruments (e.g. cross-currency interest rate swaps) to hedge
against currency risk.
Since currency risks arising from the Group’s investment
or refinancing in foreign currencies and the respective hedging
transactions principally offset each other, these financial
instruments are not included in the value at risk calculation
presented.
Effects of currency translation. For purposes of Daimler’s
Consolidated Financial Statements, the income and expenses
and the assets and liabilities of subsidiaries located outside
the euro zone are converted into euros. Therefore, period-to-
period changes in average exchange rates may cause trans-
lation effects that have a significant impact on, for example,
revenue, segment results (EBIT) and assets and liabilities of the
Group. Unlike exchange rate transaction risk, exchange rate
translation risk does not necessarily affect future cash flows.
The Group’s equity position reflects changes in book values
caused by exchange rates. In general, Daimler does not hedge
against exchange rate translation risk.
Interest rate risk
Daimler uses a variety of interest rate sensitive financial instru-
ments to manage the liquidity needs of the Group. A sub-
stantial volume of interest rate sensitive assets and liabilities
results from the leasing and sales financing business operated
by the Daimler Mobility segment. The Daimler Mobility com-
panies enter into transactions with customers that primarily
result in fixed-rate receivables. Daimler’s general policy is
to match funding in terms of maturities and interest rates wher-
ever economically feasible. However, for a limited portion
of the receivables portfolio in selected and developed markets,
the Group does not match funding in terms of maturities
in order to take advantage of market opportunities. As a result,
Daimler is exposed to risks due to changes in interest rates.
An asset/liability committee consisting of members of the
Daimler Mobility, Mercedes-Benz Cars and Daimler Trucks
segments and the Corporate Treasury department manages
the interest rate risk by setting targets for the interest rate risk
position. The Treasury Risk Management department and
the local Daimler Mobility companies are jointly responsible for
achieving these targets. As separate functions, the Treasury
Controlling and the Daimler Mobility Controlling & Reporting
department monitors target achievement on a monthly basis.
In order to achieve the targeted interest rate risk positions in
terms of maturities and interest rate fixing periods, Daimler
also uses derivative financial instruments such as interest rate
swaps. Daimler assesses its interest rate risk position by
comparing assets and liabilities for corresponding maturities,
including the impact of the relevant derivative financial
instruments.
Derivative financial instruments are also used in conjunction
with the refinancing related to the automotive segments
and liquidity management. Daimler steers the funding activities
of the automotive and financial services businesses at the
Group level.
Table F.90 shows the period-end, high, low and average value
at risk figures of the interest rate risk for the 2019 and 2018
portfolios of interest rate sensitive financial instruments and
derivative financial instruments of the Group, including the
financial instruments of the leasing and sales financing business.
Lease liabilities are not included in the value at risk of the
interest rate risk. These leasing liabilities have a fixed interest
rate and changes in interest rates therefore have no effect on
the Group’s net profit. The average values have been computed
on an end-of-quarter basis.
In the course of 2019, changes in the value at risk of interest
rate risks were primarily determined by the development of
interest rate volatilities.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 305
Hedge accounting. When designating derivative financial
instruments, a hedge ratio of 1 is generally applied. The respec-
tive volumes, interest curves and currencies of the hedged
item and the hedging instrument as well as maturity dates are
matched. In the case of combined derivative financial instru-
ments for interest currency hedges, the cross-currency basis
spread is not designated into the hedge relationship, but
deferred as a hedging cost in other comprehensive income and
recognized in profit or loss over the hedge term. The Group
ensures an economic relationship between the underlying trans-
action and the hedging instrument by ensuring consistency of
interest rates, maturity terms and nominal amounts. The effec-
tiveness of the hedge is assessed at the beginning and during
the economic relationship using the hypothetical derivative
method. Possible sources of ineffectiveness of the hedge rela-
tionship are:
Hedge accounting. When designating currency derivative finan-
cial instruments, Daimler generally applies a hedge ratio of 1.
The respective volumes and parameters relevant for the valua-
tion of the hedged item and the hedging instrument as well
as maturity dates are matched. The Group ensures an economic
relationship between the hedged item and the hedging instru-
ment by ensuring consistency of volumes, parameters relevant
for valuation and maturity terms. Effectiveness is assessed at
initial designation and during the hedge term. Possible sources
of ineffectiveness of the hedge relationship are:
– Effects of the credit risk on the fair value of the derivative
instrument in use which are not reflected in the change in
the hedged commodity price risk.
– Changes in the timing of the hedged transactions.
– Effects of the credit risk on the fair value of the derivative
instrument in use which are not reflected in the change in
the hedged interest rate risk.
– Changes in the parameters of the underlying hedged trans-
actions.
Equity price risk
Daimler predominantly holds investments in shares of compa-
nies which are classified as long-term investments, some
of which are accounted for using the equity method, such as
BAIC Motor. These investments are not included in a market
risk assessment of the Group.
Commodity price risk
Daimler is exposed to the risk of changes in commodity prices
in connection with procuring raw materials and manufacturing
supplies used in production. A small portion of the raw mate-
rial price risk, primarily relating to forecasted procurement of
certain metals, is mitigated with the use of derivative financial
instruments.
For precious metals, central commodity management shows
an unhedged position of 55% of the forecasted commodity
purchases at year-end 2019 for calendar year 2020. The corre-
sponding figure at year-end 2018 was 39% for calendar year
2019.
Table F.90 shows the period-end, high, low and average
value at risk figures of the commodity price risk for the 2019
and 2018 portfolio of derivative financial instruments used
to hedge raw material price risk. Average exposure has been
computed on an end-of-quarter basis. The transactions
underlying the derivative financial instruments are not included
in the value at risk presentation. See also table F.86.
In 2019, the value at risk of commodity derivatives ranged
close to the previous year’s level.
306 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
34. Segment reporting
Reportable segments
The reportable segments of the Group are Mercedes-Benz Cars,
Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and
Daimler Mobility (formerly Daimler Financial Services). The
segments are largely organized and managed separately,
according to nature of products and services provided, brands,
distribution channels and profile of customers.
The vehicle segments develop and manufacture passenger
cars, trucks, vans and buses. The Mercedes-Benz Cars segment
comprises premium vehicles of the Mercedes-Benz brand
including the brands Mercedes-AMG and Mercedes-Maybach,
and small cars under the smart brand, as well as the brand
Mercedes me. Electric products are marketed under the EQ
brand. Daimler Trucks distributes its trucks under the brand
names Mercedes-Benz, Freightliner, FUSO, Western Star and
BharatBenz. Furthermore, buses under the brands Thomas
Built Buses and FUSO are included in the Daimler Trucks range
of products. The vans of the Mercedes-Benz Vans segment
are primarily sold under the brand name Mercedes-Benz and
also under the Freightliner brand. Daimler Buses sells com-
pletely built-up buses under the brand names Mercedes-Benz
and Setra. In addition, Daimler Buses produces and sells
bus chassis. The vehicle segments also sell related spare parts
and accessories.
The Daimler Mobility segment supports the sales of the Group’s
vehicle segments worldwide. Its product portfolio primarily
comprises tailored financing and leasing packages for end-cus-
tomers and dealers, brokering of automotive insurance and
banking services. The segment also provides services such as
fleet management in Europe, which primarily takes place
through the Athlon brand. Furthermore, Daimler Mobility is
active in the area of innovative mobility services.
Internal management and reporting structure
The internal management and reporting structure at the Daimler
Group principally is based on the accounting policies that are
described in E Note 1 in the summary of significant account-
ing policies according to IFRS.
The measure of the Group’s profit or loss used by Daimler’s
management and reporting structure is referred to as “EBIT”.
EBIT comprises gross profit, selling and general administrative
expenses, research and non-capitalized development costs,
other operating income/expense, and the profit/loss on equity-
method investments, net, as well as other financial income/
expense, net. Although amortization of capitalized borrowing
costs is included in cost of sales, it is not included in EBIT.
The performance measure used by the Group’s internal manage-
ment and reporting structure for the automotive segments
is return on sales.
Intersegment revenue is generally recorded at values that
approximate market terms.
Segment assets principally comprise all assets. The vehicle
segments’ assets exclude income tax assets, assets from
defined-benefit pension plans and other post-employment
benefit plans, and certain financial assets (including liquidity).
Segment liabilities principally comprise all liabilities. The
vehicle segments’ liabilities exclude income tax liabilities,
liabilities from defined benefit pension plans and other post-
employment benefit plans, and certain financial liabilities
(including financing liabilities).
Daimler Mobility’s performance is measured on the basis
of return on equity, which is the usual procedure in the banking
business.
The residual value risks associated with the Group’s operating
leases and finance lease receivables are generally borne by
the vehicle segments that manufactured the leased equipment.
Risk sharing is based on agreements between the respective
vehicle segments and Daimler Mobility; the terms vary by vehicle
segment and geographic region.
Non-current assets consist of intangible assets, property,
plant and equipment and equipment on operating leases.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 307
Capital expenditures for intangible assets and property, plant
and equipment reflect the cash-effective additions to these
intangible assets and property, plant and equipment as far as
they do not relate to capitalized borrowing costs or goodwill.
Depreciation and amortization may also include impairments
insofar as they do not relate to goodwill impairment according
to IAS 36.
Amortization of capitalized borrowing costs is not included in
the amortization of intangible assets or depreciation of
property, plant and equipment since it is not considered as
part of EBIT.
Reconciliation
Reconciliation includes corporate items for which headquarters
are responsible. Transactions between the segments are
eliminated in the context of consolidation and the eliminated
amounts are included in the reconciliation.
The effects of certain legal proceedings and compliance issues
are excluded from the operating results and liabilities of the
segments if such items are not indicative of the segments’ per-
formance, since the related results of operations may be
distorted by the amount and the irregular nature of such events.
Reconciliation also includes corporate projects, profits and
losses on derivative financial transactions allocated to head-
quarters and equity interests not allocated to the segments.
Information related to geographic areas
With respect to information about geographical regions,
revenue is allocated to countries based on the location of the
customer; non-current assets are presented according to
the physical location of these assets.
Table F.91 presents segment information as of and for the
years ended December 31, 2019 and 2018.
Mercedes-Benz Cars
In the year 2019, the Mercedes-Benz Cars segment’s earnings
include expenses of €1,882 million due to a reassessment
of risks relating to ongoing governmental and legal proceed-
ings and measures taken with regard to Mercedes-Benz
Cars diesel vehicles in various regions and markets. Furthermore,
expenses in connection with an updated risk assessment
for an expanded recall of vehicles with Takata airbags caused a
reduction in earnings of €600 million. In addition, the remea-
surement at fair-value of shares in Aston Martin Lagonda Global
Holdings plc had a negative impact on EBIT.
Daimler Trucks
In the reporting year, there were no significant non-cash
effects on earnings at the Daimler Trucks segment.
Mercedes-Benz Vans
In the year 2019, EBIT at the Mercedes-Benz Vans segment
was reduced by a reassessment of risks relating to ongoing
governmental and legal proceedings and measures taken
with regard to Mercedes-Benz diesel vehicles in various regions
and markets (€2,200 million). Furthermore, earnings were
reduced by expenses in connection with the review and priori-
tization of the product portfolio (€828 million) and an updated
risk assessment for an expanded recall of vehicles with Takata
airbags (€341 million).
Daimler Buses
There were no significant non-cash effects on earnings at the
Daimler Buses segment in 2019.
Daimler Mobility
In the year 2019, the merger of the mobility services of
Daimler Group and BMW Group affected earnings positively by
€718 million. Effects of €405 million from the realignment
of the YOUR NOW group affected EBIT negatively. In the prior-
year period, the negative effect of €418 million from the
conclusion of the Toll Collect arbitration proceedings reduced
EBIT. The interest income and interest expense of Daimler
Mobility are included in revenue and cost of sales, and are pre-
sented in E Notes 4 and 5.
308 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.91
Segment information
In millions of euros
2019
External revenue
Intersegment revenue
Total revenue
Mercedes-
Benz Cars
Daimler
Trucks
Mercedes-
Benz Vans
Daimler
Buses
Daimler
Mobility
Total
Segments
Recon-
ciliation
Daimler
Group
89,683
4,194
93,877
38,393
1,842
40,235
13,770
1,031
14,801
4,562
171
4,733
26,337
172,745
–
172,745
2,309
9,547
28,646
182,292
-9,547
-9,547
–
172,745
Segment profit/loss (EBIT)
3,359
2,463
-3,085
283
2,140
5,160
-831
4,329
thereof profit/loss on equity-method
investments
thereof profit/loss from compounding
and effects from changes in discount rates
of provisions for other risks
1,146
–
54
-145
-65
-19
3
-6
-766
437
42
479
-3
-238
–
-238
Segment assets
84,406
24,187
9,685
3,819
174,821
296,918
-18,344
278,574
thereof carrying amounts of equity-method
investments
3,053
527
276
10
1,107
4,973
976
5,949
Segment liabilities
51,741
14,308
9,092
2,467
159,838
237,446
-21,120
216,326
Additions to non-current assets
thereof investments in intangible assets
18,222
3,135
2,334
113
1,532
255
thereof investments in property,
plant and equipment
Depreciation and amortization
of non-current assets
thereof amortization of intangible assets
thereof depreciation of property,
plant and equipment
5,629
971
7,007
1,664
1,837
260
3,918
942
240
856
350
341
363
30
134
250
25
89
16,254
103
38,705
3,636
3
–
38,708
3,636
87
7,061
138
7,199
6,763
82
72
16,713
2,381
5,362
101
–
8
16,814
2,381
5,370
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 309
In millions of euros
2018
External revenue
Intersegment revenue
Total revenue
Mercedes-
Benz Cars
Daimler
Trucks
Mercedes-
Benz Vans
Daimler
Buses
Daimler
Mobility
Total
Segments
Recon-
ciliation
Daimler
Group
89,467
3,636
93,103
36,456
1,817
38,273
12,842
784
13,626
4,421
108
4,529
24,176
167,362
–
167,362
2,093
8,438
26,269
175,800
-8,438
-8,438
–
167,362
Segment profit/loss (EBIT)
7,216
2,753
thereof profit/loss on equity-method
investments
thereof profit/loss from compounding
and effects from changes in discount rates
of provisions for other risks
1,108
-7
43
-9
312
44
-11
265
1,384
11,930
-798
11,132
1
-2
-452
744
-88
656
-3
-32
1
-31
Segment assets
76,352
23,558
9,868
3,780
165,316
278,874
-18,818
260,056
thereof carrying amounts of equity-method
investments
2,928
512
241
8
209
3,898
962
4,860
Segment liabilities
48,047
15,069
6,330
2,502
152,506
224,454
-20,929
203,525
Additions to non-current assets
thereof investments in intangible assets
16,494
2,553
2,460
86
1,633
368
thereof investments in property,
plant and equipment
Depreciation and amortization
of non-current assets
thereof amortization of intangible assets
thereof depreciation of property,
plant and equipment
5,684
1,105
6,105
1,437
1,622
267
3,138
798
468
599
185
255
431
56
144
235
20
75
14,431
103
35,449
3,166
64
7,465
6,236
104
14,797
2,013
24
4,290
51
1
69
90
1
1
35,500
3,167
7,534
14,887
2,014
4,291
310 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation
Reconciliation of the segment amounts to the respective items
included in the Consolidated Financial Statements is shown in
table F.92.
In 2019, the line item Other corporate items includes, amongst
other things, expenses of €425 million in connection with
ongoing governmental and legal proceedings and measures
taken with regard to Mercedes-Benz diesel vehicles. In the
prior year, the impairment of Daimler’s equity investment in BAIC
Motor Corporation Ltd. by €150 million impacted earnings
negatively. Furthermore, expenses in connection with “Project
Future” are included in both years.
Revenue and non-current assets by region
Revenue from external customers and non-current assets by
region are shown in table F.93.
F.92
Reconciliation to Group figures
In millions of euros
2019
2018
Total of segments’ profit (EBIT)
5,160
11,930
profit/loss on equity-method investments
Other corporate items
Eliminations
Group EBIT
Amortization of capitalized borrowing costs1
Interest income
Interest expense
42
-850
-23
-88
-669
-41
4,329
11,132
-16
397
-880
-15
271
-793
Profit before income taxes
3,830
10,595
Total of segments’ assets
296,918
278,874
Carrying amount of equity-method
investments2
Income tax assets3
976
5,658
962
4,227
Other corporate items and eliminations
-24,978
-24,007
Segment assets Group
278,574
260,056
Unallocated financial assets (including
liquidity) and assets from pensions and
similar obligations3
Total assets Group
Total of segments’ liabilities
Income tax liabilities3
23,864
21,563
302,438
281,619
237,446
224,454
3,099
2,556
Other corporate items and eliminations
-24,219
-23,485
Segment liabilities Group
216,326
203,525
Unallocated financial liabilities and
liabilities from pensions and similar
obligations3
Total equity Group
Total equity and liabilities Group
23,271
62,841
12,041
66,053
302,438
281,619
1 Amortization of capitalized borrowing costs is not considered
in the internal performance measure “EBIT” but is included in cost
of sales.
2 This mainly comprises the carrying amount of the investment in
BAIC Motor.
3 Unless allocated to Daimler Mobility.
F.93
Revenue and non-current assets by region
In millions of euros
Europe
thereof Germany
NAFTA
thereof
United States
Asia
thereof China
Other markets
Revenue
Non-current assets
2019
2018
2019
2018
69,541
26,339
52,196
45,422
40,657
18,954
10,351
68,496
24,802
47,952
41,152
40,627
19,790
10,287
69,478
49,335
28,497
63,559
45,281
27,095
25,228
24,239
4,565
544
2,063
2,807
219
1,764
172,745
167,362
104,603
95,225
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 311
F.94
Average net assets
In millions of euros
Mercedes-Benz Cars
Daimler Trucks
Mercedes-Benz Vans
Daimler Buses
Daimler Mobility1
Net assets of the segments
Equity-method investments2
Assets and liabilities from income taxes3
Other corporate items and eliminations3
2019
2018
32,418
10,274
2,412
1,440
13,961
60,505
980
2,720
-459
26,289
8,240
3,355
1,233
12,466
51,583
1,066
1,707
-547
Net assets Daimler Group
63,746
53,809
1 Equity.
2 Unless allocated to the segments.
3 Unless allocated to Daimler Mobility.
36. Earnings per share
The calculation of basic and diluted earnings per share is
based on net profit attributable to shareholders of Daimler AG.
Following the expiration of the stock option plan in 2014, dilu-
tive effects no longer exist. The profit attributable to share-
holders of Daimler AG (basic and diluted) amounts to
€2,377 million (2018: €7,249 million). The weighted average
number of shares outstanding (basic and diluted) amounts
to 1,069.8 million (2018: 1,069.8 million).
35. Capital management
Net assets and value added represent the basis for capital
management at Daimler. The assets and liabilities of the
segments in accordance with IFRS provide the basis for the
determination of net assets at Group level. The vehicle
segments are accountable for the operational net assets; all
assets, liabilities and provisions which they are responsible
for in day-to-day operations are therefore allocated to them.
Performance measurement at Daimler Mobility is on an
equity basis, in line with the usual practice in the banking busi-
ness. Net assets at Group level additionally include assets
and liabilities from income taxes as well as other corporate
items and eliminations.
The average annual net assets are calculated from the average
quarterly net assets. The average quarterly net assets are
calculated as an average of the net assets at the beginning and
the end of the quarter and are shown in table F.94.
The cost of capital of the Group’s average net assets is
reflected in value added. Value added shows the extent to which
the Group achieves or exceeds the minimum return require-
ments of the shareholders and creditors, thus creating additional
value. The required rate of return on net assets, and thus the
cost of capital, are derived from the minimum rates of return
that investors expect on their invested capital. The Group’s
cost of capital comprises the cost of equity as well as the costs
of debt and pension obligations unless these are allocated to
Daimler Mobility; in addition, the expected returns on liquidity
and on the plan assets of the pension funds which are not
allocated to Daimler Mobility are considered with the opposite
sign. In the reporting period, the cost of capital used for
our internal capital management amounted to 8% after taxes.
The objective of capital management is to increase value
added, among other things, by optimizing the cost of capital.
This is achieved on the one hand by the management of the net
assets, for instance by optimizing working capital which is
within the operational responsibility of the segments. In addition,
taking into account legal regulations, Daimler strives to
optimize the costs and risks of its capital structure and, con-
sequently, the cost of capital, with due consideration of
applicable law. Examples of this include a balanced relation-
ship between equity and financial liabilities as well as an
appropriate level of liquidity, oriented towards the operational
requirements.
312 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.95
Transactions with related companies
In millions of euros
Sales of goods
and services
and other income
Purchase of goods
and services
and other expense
Receivables
at December 31,1
Payables
at December 31,2
2019
2018
2019
2018
2019
2018
2019
2018
Associated companies
13,505
13,475
thereof LSHAI
thereof BBAC
Joint ventures
7,230
5,880
884
8,011
4,850
997
628
476
132
187
855
647
64
100
3,324
1,288
1,966
213
2,679
981
1,571
208
116
24
78
78
131
30
85
444
1 After total loss allowances of €66 million (2018: €53 million).
2 Including liabilities from default risks from guarantees for related parties.
F.96
Remuneration of the members of the Board of Management and
the Supervisory Board
In millions of euros
Remuneration of the Board of Management
Fixed remuneration (base salary)
Short-term variable remuneration
(50% of annual bonus)
Mid-term variable remuneration
(50% of annual bonus, “deferral”)
Variable remuneration with a long-term
incentive effect (PPSP)
Post-employment benefits (service cost)
Termination benefits
Remuneration of the Supervisory Board1
2019
2018
8.9
1.0
0.9
11.7
2.0
–
24.5
4.6
29.1
9.5
2.5
1.9
1.6
2.4
–
17.9
4.2
22.1
1 As of the year 2019, including remuneration for the members of the
Supervisory Board of Mercedes-Benz AG and of Daimler Truck AG
according to Section 314 Subsection 1 No. 6a of the German
Commercial Code (HGB).
37. Related party disclosures
Related parties (persons or companies) are deemed to be
associated companies, joint ventures and unconsolidated sub-
sidiaries, as well as persons who exercise a significant influ-
ence on the financial and business policy of the Daimler Group.
The latter category includes all persons in key positions and
their close family members. At the Daimler Group, those persons
are the members of the Board of Management and of the
Supervisory Board.
Related companies
Business transactions with related companies are carried
out at market terms. Most of the goods and services supplied
between the Group and related companies comprise trans-
actions with associated companies and joint ventures and are
shown in table F.95.
Associated companies
A large proportion of the Group’s sales of goods and services
with associated companies as well as of its receivables
relates to business relations with LSH Auto International Limited
(LSHAI) and with Beijing Benz Automotive Co., Ltd. (BBAC),
which is allocated to Mercedes-Benz Cars.
The purchases of goods and services shown in table F.95
were primarily from LSHAI.
Joint ventures
In business relationships with joint ventures, significant sales
of goods and services took place with Fujian Benz Automotive
Co., Ltd. (FBAC), which is allocated to Mercedes-Benz Vans,
and with DAIMLER KAMAZ RUS OOO, which is allocated to
Daimler Trucks.
E Note 13 provides further details of the business operations
of the significant associated companies and joint ventures,
as well as significant transactions in the years 2019 and 2018.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 313
Contributions to plan assets
Daimler Pension Trust e. V. manages the plan assets on a
fiduciary basis to cover pension obligations in Germany and is
therefore a related company of the Daimler Group. Another
related company is Daimler Pensionsfonds AG. Daimler AG
bears non-significant expenses and provides services for both
companies. See also E Note 22 for further information.
Related persons
Throughout the world, the Group has business relationships
with numerous entities that are customers and/or suppliers of
the Group. Those customers and/or suppliers include com-
panies that have a connection with some of the members of
the Board of Management or of the Supervisory Board and
close family members of those board members of Daimler AG
or of its subsidiaries.
Board of Management and Supervisory Board members and
close family members of those board members may also
purchase goods and services from Daimler AG or its subsidiar-
ies as customers. When such business relationships exist,
transactions are concluded at market terms.
See E Note 38 for information on the remuneration of board
members.
38. Remuneration of the members
of the Board of Management and the
Supervisory Board
Remuneration granted in 2019 to the members of the Board
of Management and the Supervisory Board who were active in
2019 is shown in table F.96.
Expenses for variable remuneration of the Board of Manage-
ment with a long-term incentive effect, as shown in table
F.96, result from the ongoing measurement at fair value at
each balance sheet date of all rights granted and not yet
due under the Performance Phantom Share Plans (PPSP), i.e.
for the plans of the years 2015 to 2018. In 2019, the active
members of the Board of Management were granted 266,128
(2018: 145,775) phantom shares in connection with the
PPSP; the fair value of these phantom shares at the grant date
was €13.3 million (2018: €10.2 million). See E Note 21
for additional information on share-based payment of the
members of the Board of Management.
According to Section 314 Subsection 1 No. 6a of the German
Commercial Code (HGB), the overall remuneration granted to
the members of the Board of Management, excluding service
cost resulting from entitlements to post-employment benefits,
amounted to €24.2 million (2018: €24.7 million).
The members of the Supervisory Board are solely granted
short-term fixed remuneration for their board and committee
activities, the amounts of which depend on their functions
in the Supervisory Board. With the exception of remuneration
paid to the members representing the employees in accor-
dance with their contracts of employment, no remuneration
was paid in 2019 for services provided personally beyond
board and committee activities, in particular for advisory or
agency services.
The members of the Board of Management do not receive
any remuneration for their board activities in the boards of the
subsidiaries. These activities are compensated by the remu-
neration at Daimler AG.
No advance payments or loans were made or abated to
members of the Board of Management or to the members of
the Supervisory Board of Daimler AG in 2019.
The payments made in 2019 to former members of the Board
of Management of Daimler AG and their survivors amounted
to €19.5 million (2018: €16.2 million). The pension provisions
for former members of the Board of Management and their
survivors amounted to €355.8 million as of December 31, 2019
(2018: €270.2 million).
Information regarding the remuneration of the members
of the Board of Management and of the Supervisory Board is
disclosed on an individual basis in the Remuneration Report,
which is part of the Combined Management Report.
E Management Report from page 108
314 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F.97
Auditor fees
In millions of euros
Audit services
thereof KPMG AG Wirtschaftsprüfungs-
gesellschaft
Other attestation services
thereof KPMG AG Wirtschaftsprüfungs-
gesellschaft
Tax services
thereof KPMG AG Wirtschaftsprüfungs-
gesellschaft
Other services
thereof KPMG AG Wirtschaftsprüfungs-
gesellschaft
2019
2018
52
28
15
12
2
1
6
4
46
23
10
8
2
1
8
6
75
66
39. Auditor fees
The shareholders of Daimler AG elected KPMG AG Wirtschafts-
prüfungsgesellschaft as the external auditor at the Annual
Shareholders’ Meeting held on May 22, 2019. Table F.97
shows the fees for services provided by KPMG AG Wirtschafts-
prüfungsgesellschaft and the companies of the worldwide
KPMG network to Daimler AG, the consolidated subsidiaries as
well as joint operations.
Audit services relate to the audit of Daimler Group’s Con-
solidated Financial Statements and the year-end financial
statements, as well as to all services required for the audit
including the reviews of interim financial statements, the
accounting-related audit of the internal control system,
and accounting-related reviews of the introduction of IT sys-
tems and processes.
Other attestation services include attestation services
required by law or by contractual agreement, or voluntarily
assigned services. In addition to reviews of non-accounting-
related IT systems and processes, they also include attestation
services in connection with “Project Future.” Furthermore,
audits in connection with compliance management systems, the
issuance of comfort letters, and non-financial disclosures
and reports were commissioned.
Tax services primarily relate to value-added tax advisory.
Other services mainly relate to non-accounting-relevant IT- and
process consulting and quality assurance.
40. Events after the reporting period
Personnel measures in production-related and
administrative areas in the years 2020 to 2022
In January 2020, Daimler agreed with the General Works
Council on a general company agreement that, among other
things, regulates voluntary agreements on termination of
employment primarily for employees in indirect areas (i.e. in
administration and production-related areas). Discussions
with employees on voluntary agreements on termination of
employment will begin in the second quarter of 2020.
Establishment of joint venture smart Automobile Co., Ltd.
Mercedes-Benz AG and Zhejiang Geely Holding Group estab-
lished the joint venture smart Automobile Co., Ltd. in December
2019. The two companies are expected to contribute equal
shares of RMB 2.7 billion each to the equity of the joint venture
in the first half of 2020. The equity interest of Mercedes-Benz
AG will mainly consist of the contribution of the smart brand,
which will have a positive impact on earnings before taxes of
approximately €0.1 billion to €0.2 billion at the future Mercedes-
Benz Cars & Vans segment.
Sale of 30% of the shares in HERE
In December 2019, There Holding B.V. (THBV) and HERE Inter-
national B.V. (HERE) and other companies signed an agreement
on the basis of which 30% of the shares in HERE are to be
sold to a joint venture between Mitsubishi Corporation and
Nippon Telegraph and Telephone Corporation. The transaction
is expected to be completed in the first half of 2020 after
receiving the approval of the relevant authorities. The comple-
tion is expected to lead to a gain of €0.1 billion.
41. Additional information
German Corporate Governance Code
The Board of Management and the Supervisory Board of
Daimler AG have issued a declaration pursuant to Section 161
of the German Stock Corporation Act (AktG) and have made
it permanently available to their shareholders on Daimler’s
website at w https://www.daimler.com/documents/
company/ corporate-governance/declarations/daimler-
declaration-en-12-2019.pdf.
Information on investments
The statement of investments of the Daimler Group pursuant to
Section 313 Subsection 2 Nos. 1-6 of the German Commercial
Code (HGB) is presented in table F.98. In general, coopera-
tions without an equity interest are not reported. Information
on equity and earnings and information on investments pursu-
ant to Section 313 Subsection 2 No. 4 of the German Commer-
cial Code is omitted insofar as, pursuant to Section 313 Sub-
section 3 Sentence 4 of the HGB, such information is of minor
relevance for a fair presentation of the profitability, liquidity
and capital resources or financial position of the Daimler Group.
In addition, the statement of investments indicates which
consolidated companies make use of the exemption pursuant to
Section 264 Subsection 3 of the HGB and/or Section 264b of
the HGB. The Consolidated Financial Statements of Daimler AG
release those subsidiaries from the requirements that would
otherwise apply.
F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 315
Domicile, Country
Capital share
in %1
Footnote
F.98
Name of the Company
I. Consolidated subsidiaries
Athlon Beheer International B.V.
Athlon Beheer Nederland B.V.
Athlon Car Lease Belgium N.V.
Athlon Car Lease International B.V.
Athlon Car Lease Italy S.R.L.
Athlon Car Lease Nederland B.V.
Athlon Car Lease Polska Sp. z o.o.
Athlon Car Lease Portugal, lda
Schiphol, Netherlands
Schiphol, Netherlands
Machelen, Belgium
Schiphol, Netherlands
Rome, Italy
Schiphol, Netherlands
Warsaw, Poland
Oeiras, Portugal
Athlon Car Lease Rental Services B.V.
Schiphol, Netherlands
Athlon Car Lease Rental Services Belgium N.V.
Athlon Car Lease S.A.S.
Athlon Car Lease Spain, S.A.
Athlon Dealerlease B.V.
Athlon France S.A.S.
Athlon Germany GmbH
Athlon Mobility Consultancy B.V.
Athlon Mobility Consultancy N.V.
Athlon Rental Germany GmbH
Athlon Sweden AB
Athlon Switzerland AG
AutoGravity Corporation
Banco Mercedes-Benz do Brasil S.A.
Machelen, Belgium
Le Bourget, France
Alcobendas, Spain
Hoofddorp, Netherlands
Le Bourget, France
Düsseldorf, Germany
Schiphol, Netherlands
Machelen, Belgium
Düsseldorf, Germany
Malmö, Sweden
Schlieren, Switzerland
Irvine, USA
São Paulo, Brazil
Brooklands Estates Management Limited
Milton Keynes, United Kingdom
Campo Largo Comercio de Veículos e Peças Ltda.
Campinas, Brazil
CARS Technik & Logistik GmbH
CLIDET NO 1048 (Proprietary) Limited
Conemaugh Hydroelectric Projects, Inc.
DA Investments Co. LLC
DAF Investments, Ltd.
Wiedemar, Germany
Centurion, South Africa
Wilmington, USA
Wilmington, USA
Wilmington, USA
Daimler Australia/Pacific Pty. Ltd.
Melbourne, Australia
Daimler Brand & IP Management GmbH & Co. KG
Stuttgart, Germany
Daimler Buses North America Inc.
Daimler Canada Finance Inc.
Daimler Canada Investments Company
Daimler Capital Services LLC
Daimler Ceská republika Holding s.r.o.
Daimler Colombia S. A.
Oriskany, USA
Montreal, Canada
Halifax, Canada
Wilmington, USA
Prague, Czech Republic
Bogota D.C., Colombia
Daimler Commercial Vehicles South East Asia Pte. Ltd.
Singapore, Singapore
Daimler Compra y Manufactura Mexico S. de R.L. de C.V.
Mexico City, Mexico
Daimler Export and Trade Finance GmbH
Daimler Finance North America LLC
Berlin, Germany
Wilmington, USA
Daimler Financial Services Africa & Asia Pacific Ltd.
Singapore, Singapore
Daimler Financial Services India Private Limited
Chennai, India
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
80.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
5
5
5
316 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Daimler Financial Services Investment Company LLC
Wilmington, USA
Daimler Financial Services México, S. de R.L. de C.V.
Mexico City, Mexico
Daimler Financial Services, S.A. de C.V., S.O.F.O.M., E.N.R.
Mexico City, Mexico
Daimler Fleet Management GmbH
Stuttgart, Germany
Daimler Fleet Management Singapore Pte. Ltd.
Singapore, Singapore
Daimler Fleet Management South Africa (Pty.) Ltd. i. L.
Centurion, South Africa
Daimler Fleet Management UK Limited
Milton Keynes, United Kingdom
Daimler Fleet Services A.S.
Daimler Fleetboard GmbH
Daimler Greater China Ltd.
Daimler Grund Services GmbH
Istanbul, Turkey
Stuttgart, Germany
Beijing, China
Schönefeld, Germany
Daimler India Commercial Vehicles Private Limited
Chennai, India
Daimler Insurance Agency LLC
Daimler Insurance Services GmbH
Daimler Insurance Services Japan Co., Ltd.
Wilmington, USA
Stuttgart, Germany
Tokyo, Japan
Daimler Insurance Services UK Limited
Milton Keynes, United Kingdom
Daimler International Finance B.V.
Daimler International Nederland B.V.
Daimler Investments US Corporation
Daimler Ladungsträger GmbH
Daimler Manufactura, S. de R.L. de C.V.
Daimler Mexico, S.A. de C.V.
Utrecht, Netherlands
Utrecht, Netherlands
Wilmington, USA
Sindelfingen, Germany
Mexico City, Mexico
Mexico City, Mexico
Daimler Mobility & Technology Service Co., Ltd.
Beijing, China
Daimler Mobility AG
DAIMLER MOBILITY AUSTRALIA PTY LTD
Stuttgart, Germany
Melbourne, Australia
Daimler Mobility Brasil Holding S.A.
São Bernardo do Campo, Brazil
Daimler Mobility Services GmbH
Daimler Motors Investments LLC
Daimler Nederland B.V.
Daimler Nederland Holding B.V.
Daimler North America Corporation
Daimler North America Finance Corporation
Leinfelden-Echterdingen, Germany
Wilmington, USA
Utrecht, Netherlands
Utrecht, Netherlands
Wilmington, USA
Newark, USA
Daimler Northeast Asia Parts Trading and Services Co., Ltd.
Beijing, China
Daimler Parts Brand GmbH
Daimler Re Brokers GmbH
Stuttgart, Germany
Bremen, Germany
Daimler Re Insurance S.A. Luxembourg
Luxembourg, Luxembourg
Daimler Real Estate GmbH
Daimler Retail Receivables LLC
Daimler Securitisation Australia Pty Ltd
Berlin, Germany
Farmington Hills, USA
Mulgrave, Australia
DAIMLER SERVICIOS CORPORATIVOS MEXICO S. DE R.L. DE C.V.
Mexico City, Mexico
Daimler South East Asia Pte. Ltd.
Daimler Truck AG
Daimler Truck and Bus Australia Pacific Pty. Ltd.
Singapore, Singapore
Stuttgart, Germany
Mulgrave, Australia
DAIMLER TRUCK AND BUS HOLDING AUSTRALIA PACIFIC PTY LTD
Melbourne, Australia
100.00
100.00
100.00
100.00
100.00
65.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
74.90
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
5
4
5
5
5
5
5
5
5
5
5
5
Name of the Company Domicile, Country Capital share in %1Footnote F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 317
Daimler Truck China Limited
Daimler Trucks & Buses US Holding LLC
Daimler Trucks and Buses (China) Ltd.
Beijing, China
Wilmington, USA
Beijing, China
Daimler Trucks and Buses Southern Africa (Pty) Ltd
Zwartkop, South Africa
Daimler Trucks Canada Ltd.
Daimler Trucks Korea Ltd.
Daimler Trucks North America LLC
Daimler Trucks Remarketing Corporation
Daimler Trucks Retail Trust 2018-1
Daimler Trucks Retail Trust 2019-1
Daimler Trust Holdings LLC
Daimler Trust Leasing Conduit LLC
Daimler Trust Leasing LLC
Daimler UK Limited
Daimler Vans Hong Kong Limited
Daimler Vans USA, LLC
Mississauga, Canada
Seoul, South Korea
Wilmington, USA
Portland, USA
Wilmington, USA
Wilmington, USA
Farmington Hills, USA
Wilmington, USA
Farmington Hills, USA
Milton Keynes, United Kingdom
Hong Kong, China
Wilmington, USA
Daimler Vehículos Comerciales Mexico S. de R.L. de C.V.
Mexico City, Mexico
Daimler Verwaltungsgesellschaft für Grundbesitz mbH
Schönefeld, Germany
Daimler Vorsorge und Versicherungsdienst GmbH
Berlin, Germany
Detroit Diesel Corporation
Detroit Diesel Remanufacturing LLC
Detroit, USA
Detroit, USA
Deutsche Accumotive GmbH & Co. KG
Kirchheim unter Teck, Germany
EHG Elektroholding GmbH
EvoBus (Schweiz) AG
EvoBus (U.K.) Ltd.
EvoBus Austria GmbH
EvoBus Belgium N.V.
EvoBus Ceská republika s.r.o.
EvoBus Danmark A/S
EvoBus France S.A.S.U.
EvoBus GmbH
EvoBus Ibérica, S.A.U.
EvoBus Italia S.p.A.
EvoBus Nederland B.V.
EvoBus Polska Sp. z o.o.
EvoBus Portugal, S.A.
EvoBus Sverige AB
Freightliner Custom Chassis Corporation
Friesland Lease B.V.
Stuttgart, Germany
Kloten, Switzerland
Coventry, United Kingdom
Wiener Neudorf, Austria
Kobbegem-Asse, Belgium
Prague, Czech Republic
Koege, Denmark
Sarcelles, France
Stuttgart, Germany
Sámano, Spain
Bomporto, Italy
Nijkerk, Netherlands
Wolica, Poland
Mem Martins, Portugal
Vetlanda, Sweden
Gaffney, USA
Drachten, Netherlands
Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 1 OHG Schönefeld, Germany
Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 2 OHG Schönefeld, Germany
Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 3 OHG Schönefeld, Germany
Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 4 OHG Schönefeld, Germany
Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 5 OHG Schönefeld, Germany
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
0.00
0.00
100.00
100.00
100.00
100.00
67.55
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.11
100.00
100.00
100.00
100.00
100.00
3
3
5
5
5
5
5
5, 7
5, 7
5, 7
5, 7
5, 7
Name of the Company Domicile, Country Capital share in %1Footnote 318 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 6 OHG Schönefeld, Germany
Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 7 OHG Schönefeld, Germany
Grundstücksverwaltungsgesellschaft Daimler AG & Co. Beta OHG
Schönefeld, Germany
Grundstücksverwaltungsgesellschaft Daimler AG & Co. Delta OHG
Schönefeld, Germany
Grundstücksverwaltungsgesellschaft Daimler AG & Co. Epsilon OHG Schönefeld, Germany
Grundstücksverwaltungsgesellschaft Daimler AG & Co.
Gamma 1 OHG
Grundstücksverwaltungsgesellschaft Daimler AG & Co.
Gamma 2 OHG
Grundstücksverwaltungsgesellschaft Daimler AG & Co.
Gamma 3 OHG
Grundstücksverwaltungsgesellschaft Daimler AG & Co.
Gamma 4 OHG
Schönefeld, Germany
Schönefeld, Germany
Schönefeld, Germany
Schönefeld, Germany
Grundstücksverwaltungsgesellschaft EvoBus GmbH & Co. OHG
Schönefeld, Germany
Interleasing Luxembourg S.A.
Windhof, Luxembourg
Invema Assessoria Empresarial Eireli
São Bernardo do Campo, Brazil
Koppieview Property (Pty) Ltd
LBBW AM – Daimler Re Insurance
Zwartkop, South Africa
Luxembourg, Luxembourg
LBBW AM – MBVEXW
LEONIE CORP DVB GmbH
LEONIE FS DVB GmbH
LEONIE FSM DVB GmbH
LEONIE TB DVB GmbH
Li-Tec Battery GmbH
Mascot Truck Parts Canada Ltd (2017)
Mascot Truck Parts USA LLC
MBarc Credit Canada Inc.
MDC Power GmbH
MDC Technology GmbH
Stuttgart, Germany
Stuttgart, Germany
Stuttgart, Germany
Stuttgart, Germany
Stuttgart, Germany
Kamenz, Germany
Mississauga, Canada
Wilmington, USA
Mississauga, Canada
Kölleda, Germany
Arnstadt, Germany
Mercedes AMG High Performance Powertrains Ltd
Brixworth, United Kingdom
Mercedes pay AG
Mercedes pay S.A.
Mercedes-AMG GmbH
Mercedes-Benz – Aluguer de Veículos, Lda.
Mercedes-Benz (China) Ltd.
Mercedes-Benz (Thailand) Limited
Mercedes-Benz AG
Mercedes-Benz Antwerpen N.V.
Mercedes-Benz Argentina S.A.U.
Mercedes-Benz Asia GmbH
Mercedes-Benz Assuradeuren B.V.
Mercedes-Benz Australia/Pacific Pty Ltd
Mercedes-Benz Auto Finance Ltd.
Mercedes-Benz Auto Lease Trust 2017-A
Mercedes-Benz Auto Lease Trust 2018-A
Mercedes-Benz Auto Lease Trust 2018-B
Zug, Switzerland
Luxembourg, Luxembourg
Affalterbach, Germany
Mem Martins, Portugal
Beijing, China
Bangkok, Thailand
Stuttgart, Germany
Antwerp, Belgium
Buenos Aires, Argentina
Stuttgart, Germany
Utrecht, Netherlands
Melbourne, Australia
Beijing, China
Wilmington, USA
Wilmington, USA
Wilmington, USA
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
0.00
0.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
75.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
0.00
0.00
0.00
5, 7
5, 7
5, 7
5, 7
5, 7
5, 7
5, 7
5, 7
5, 7
5, 7
3
3
5
5
5
5
5
5
5
5
5
5
3
3
3
Name of the Company Domicile, Country Capital share in %1Footnote F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 319
Mercedes-Benz Auto Lease Trust 2019-A
Mercedes-Benz Auto Lease Trust 2019-B
Mercedes-Benz Auto Receivables Trust 2015-1
Mercedes-Benz Auto Receivables Trust 2016-1
Mercedes-Benz Auto Receivables Trust 2018-1
Mercedes-Benz Auto Receivables Trust 2019-1
Mercedes-Benz Bank AG
Mercedes-Benz Bank GmbH
Mercedes-Benz Bank Polska S.A.
Mercedes-Benz Bank Rus OOO
Wilmington, USA
Wilmington , USA
Wilmington, USA
Wilmington, USA
Wilmington, USA
Wilmington, USA
Stuttgart, Germany
Eugendorf, Austria
Warsaw, Poland
Moscow, Russian Federation
Mercedes-Benz Bank Service Center GmbH
Berlin, Germany
Mercedes-Benz Banking Service GmbH
Saarbrücken, Germany
Mercedes-Benz Belgium Luxembourg S.A.
Mercedes-Benz Bordeaux S.A.S.
Brussels, Belgium
Begles, France
Mercedes-Benz Broker Argentina S.A.
Buenos Aires, Argentina
Mercedes-Benz Broker Biztositási Alkusz Hungary Kft.
Budapest, Hungary
Mercedes-Benz Brooklands Limited
Milton Keynes, United Kingdom
Mercedes-Benz Canada Inc.
Toronto, Canada
Mercedes-Benz Capital Rus OOO
Moscow, Russian Federation
Mercedes-Benz Cars Ceská republika s.r.o.
Mercedes-Benz Cars Nederland B.V.
Mercedes-Benz Cars UK Limited
Mercedes-Benz CharterWay S.A.S.
Prague, Czech Republic
Utrecht, Netherlands
Milton Keynes, United Kingdom
Montigny-le-Bretonneux, France
Mercedes-Benz CharterWay S.r.l.
Trent, Italy
Mercedes-Benz Compañía Financiera Argentina S.A.
Buenos Aires, Argentina
Mercedes-Benz Connectivity Services GmbH
Mercedes-Benz Corretora de Seguros Ltda
Mercedes-Benz CPH A/S
Stuttgart, Germany
São Paulo, Brazil
Horsholm, Denmark
Mercedes-Benz Credit Pénzügyi Szolgáltató Hungary Zrt.
Budapest, Hungary
Mercedes-Benz Customer Solutions GmbH
Stuttgart, Germany
Mercedes-Benz Danmark A/S
Mercedes-Benz Dealer Bedrijven B.V.
Copenhagen, Denmark
The Hague, Netherlands
Mercedes-Benz do Brasil Assessoria Comercial Ltda.
São Paulo, Brazil
Mercedes-Benz do Brasil Ltda.
Mercedes-Benz Drogenbos N.V.
Mercedes-Benz Espana, S.A.U.
Mercedes-Benz Europa NV/SA
Mercedes-Benz ExTra LLC
Mercedes-Benz Finance Co., Ltd.
São Bernardo do Campo, Brazil
Drogenbos, Belgium
Alcobendas, Spain
Woluwe-Saint-Lambert, Belgium
Wilmington, USA
Tokyo, Japan
Mercedes-Benz Financial Services Australia Pty. Ltd.
Melbourne, Australia
Mercedes-Benz Financial Services Austria GmbH
Mercedes-Benz Financial Services BeLux NV
Eugendorf, Austria
Brussels, Belgium
Mercedes-Benz Financial Services Canada Corporation
Mississauga, Canada
Mercedes-Benz Financial Services Ceská republika s.r.o.
Prague, Czech Republic
3
3
3
3
3
3
5
5
5
5
0.00
0.00
0.00
0.00
0.00
0.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
99.98
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
95.01
100.00
100.00
100.00
100.00
100.00
Name of the Company Domicile, Country Capital share in %1Footnote 320 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Mercedes-Benz Financial Services España, E.F.C., S.A.
Alcobendas, Spain
Mercedes-Benz Financial Services France S.A.
Montigny-le-Bretonneux, France
Mercedes-Benz Financial Services Hong Kong Ltd.
Hong Kong, China
Mercedes-Benz Financial Services Italia S.p.A.
Rome, Italy
Mercedes-Benz Financial Services Korea Ltd.
Seoul, South Korea
Mercedes-Benz Financial Services Nederland B.V.
Utrecht, Netherlands
Mercedes-Benz Financial Services New Zealand Ltd
Auckland, New Zealand
Mercedes-Benz Financial Services Portugal – Sociedade Financeira
de Crédito S.A.
Mem Martins, Portugal
Mercedes-Benz Financial Services Rus OOO
Moscow, Russian Federation
Mercedes-Benz Financial Services Schweiz AG
Schlieren, Switzerland
Mercedes-Benz Financial Services Slovakia s.r.o.
Bratislava, Slovakia
Mercedes-Benz Financial Services South Africa (Pty) Ltd
Centurion, South Africa
Mercedes-Benz Financial Services Sp. zo.o.
Mercedes-Benz Financial Services Taiwan Ltd.
Warsaw, Poland
Taipei, Taiwan
Mercedes-Benz Financial Services UK Limited
Milton Keynes, United Kingdom
Mercedes-Benz Financial Services USA LLC
Wilmington, USA
Mercedes-Benz Finans Danmark A/S
Copenhagen, Denmark
Mercedes-Benz Finans Sverige AB
Mercedes-Benz Finansal Kiralama Türk A.S.
Mercedes-Benz Finansman Türk A.S.
Malmö, Sweden
Istanbul, Turkey
Istanbul, Turkey
Mercedes-Benz Formula E Limited
Brackley, United Kingdom
Mercedes-Benz Försäljnings AB
Mercedes-Benz France S.A.S.
Mercedes-Benz Fuel Cell GmbH
Mercedes-Benz Grand Prix Ltd.
Mercedes-Benz Hellas S.A.
Mercedes-Benz Hong Kong Limited
Mercedes-Benz India Private Limited
Mercedes-Benz Insurance Agency (Beijing) Co., Ltd.
Malmö, Sweden
Montigny-le-Bretonneux, France
Kirchheim unter Teck, Germany
Brackley, United Kingdom
Kifissia, Greece
Hong Kong, China
Pune, India
Beijing, China
Mercedes-Benz Insurance Broker S.R.L.
Voluntari, Romania
Mercedes-Benz Insurance Services Nederland B.V.
Utrecht, Netherlands
Mercedes-Benz Insurance Services Taiwan Ltd.
Mercedes-Benz Investment Company LLC
Mercedes-Benz Italia S.p.A.
Mercedes-Benz Japan Co., Ltd.
Mercedes-Benz Korea Limited
Mercedes-Benz Leasing (Thailand) Co., Ltd.
Mercedes-Benz Leasing Co., Ltd.
Taipei, Taiwan
Wilmington, USA
Rome, Italy
Tokyo, Japan
Seoul, South Korea
Bangkok, Thailand
Beijing, China
Mercedes-Benz Leasing do Brasil Arrendamento Mercantil S.A.
Barueri, Brazil
Mercedes-Benz Leasing GmbH
Mercedes-Benz Leasing Hrvatska d.o.o.
Mercedes-Benz Leasing IFN S.A.
Mercedes-Benz Leasing Kft.
Mercedes-Benz Leasing Polska Sp. z o.o.
Stuttgart, Germany
Zagreb, Croatia
Bucharest, Romania
Budapest, Hungary
Warsaw, Poland
100.00
100.00
80.00
100.00
80.00
100.00
100.00
100.00
100.00
100.00
75.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
65.00
100.00
100.00
100.00
100.00
100.00
100.00
5
Name of the Company Domicile, Country Capital share in %1Footnote F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 321
Mercedes-Benz Leasing Taiwan Ltd.
Mercedes-Benz Leasing Treuhand GmbH
Taipei, Taiwan
Stuttgart, Germany
Mercedes-Benz Ludwigsfelde GmbH
Ludwigsfelde, Germany
Mercedes-Benz Malaysia Sdn. Bhd.
Mercedes-Benz Manhattan, Inc.
Mercedes-Benz Manufacturing (Thailand) Limited
Puchong, Malaysia
Wilmington, USA
Bangkok, Thailand
Mercedes-Benz Manufacturing Hungary Kft.
Kecskemét, Hungary
Mercedes-Benz Manufacturing Poland Sp. z o.o.
Mercedes-Benz Master Owner Trust
Mercedes-Benz Mechelen N.V.
Mercedes-Benz Mexico, S. de R.L. de C.V.
Mercedes-Benz Minibus GmbH
Jawor, Poland
Wilmington, USA
Mechelen, Belgium
Mexico City, Mexico
Dortmund, Germany
Mercedes-Benz Mitarbeiter-Fahrzeuge Leasing GmbH
Stuttgart, Germany
Mercedes-Benz New Zealand Ltd
Mercedes-Benz Österreich GmbH
Mercedes-Benz Paris SAS
Auckland, New Zealand
Eugendorf, Austria
Port-Marly, France
Mercedes-Benz Parts Logistics Eastern Europe s.r.o.
Prague, Czech Republic
Mercedes-Benz Parts Logistics Ibérica, S.L.U.
Azuqueca de Henares, Spain
Mercedes-Benz Parts Logistics UK Limited
Milton Keynes, United Kingdom
Mercedes-Benz Parts Manufacturing & Services Ltd.
Mercedes-Benz Polska Sp. z o.o.
Mercedes-Benz Portugal, S.A.
Mercedes-Benz PRAHA s.r.o.
Mercedes-Benz Renting, S.A.
Shanghai, China
Warsaw, Poland
Mem Martins, Portugal
Prague, Czech Republic
Alcobendas, Spain
Mercedes-Benz Research & Development North America, Inc.
Wilmington, USA
Mercedes-Benz Retail Belgium NV/SA
Woluwe-Saint-Lambert, Belgium
Mercedes-Benz Retail Group UK Limited
Milton Keynes, United Kingdom
Mercedes-Benz Retail, S.A.
Madrid, Spain
Mercedes-Benz Retail, Unipessoal Lda.
Mem Martins, Portugal
Mercedes-Benz Risk Solutions South Africa (Pty.) Ltd.
Centurion, South Africa
Mercedes-Benz Roma S.p.A.
Mercedes-Benz Romania S.R.L.
Mercedes-Benz Russia AO
Mercedes-Benz Schweiz AG
Mercedes-Benz Service Leasing S.R.L.
Rome, Italy
Bucharest, Romania
Moscow, Russian Federation
Schlieren, Switzerland
Bucharest, Romania
Mercedes-Benz Services Correduria de Seguros, S.A.
Alcobendas, Spain
Mercedes-Benz Services Malaysia Sdn Bhd
Petaling Jaya, Malaysia
Mercedes-Benz Sigorta Aracilik Hizmetleri A.S.
Mercedes-Benz Sosnowiec Sp. z o.o.
Mercedes-Benz South Africa Ltd
Mercedes-Benz Sverige AB
Mercedes-Benz Taiwan Ltd.
Istanbul, Turkey
Sosnowiec, Poland
Pretoria, South Africa
Malmö, Sweden
Taipei, Taiwan
Mercedes-Benz Trucks Belgium Luxembourg NV/SA
Brussels, Belgium
Mercedes-Benz Trucks Center Sint-Pieters-Leeuw NV/SA
Sint-Pieters-Leeuw, Belgium
5
5
3
5
5
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
0.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
100.00
Name of the Company Domicile, Country Capital share in %1Footnote 322 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Mercedes-Benz Trucks Ceská republika s.r.o.
Prague, Czech Republic
Mercedes-Benz Trucks España S.L.U.
Alcobendas, Spain
Mercedes-Benz Trucks France S.A.S.U
Montigny-le-Bretonneux, France
Mercedes-Benz Trucks Italia S.r.l.
Mercedes-Benz Trucks Molsheim
Mercedes-Benz Trucks Nederland B.V.
MERCEDES-BENZ TRUCKS POLSKA SPÓŁKA Z OGRANICZONA
ODPOWIEDZIALNOSCIA
Rome, Italy
Molsheim, France
Utrecht, Netherlands
Warsaw, Poland
Mercedes-Benz Trucks Schweiz AG
Schlieren, Switzerland
Mercedes-Benz Trucks UK Limited
Milton Keynes, United Kingdom
Mercedes-Benz Türk A.S.
Mercedes-Benz U.S. International, Inc.
Mercedes-Benz Ubezpieczenia Sp. z o.o.
Mercedes-Benz USA, LLC
Mercedes-Benz V.I. Lyon SAS
Mercedes-Benz V.I. Paris Ile de France SAS
Istanbul, Turkey
Vance, USA
Warsaw, Poland
Wilmington, USA
Genas, France
Wissous, France
Mercedes-Benz Vans Ceská republika s.r.o
Prague, Czech Republic
Mercedes-Benz Vans España, S.L.U.
Mercedes-Benz Vans Mobility GmbH
Madrid, Spain
Berlin, Germany
Mercedes-Benz Vans Nederland B.V.
Utrecht, Netherlands
Mercedes-Benz Vans UK Limited
Milton Keynes, United Kingdom
Mercedes-Benz Vans, LLC
Wilmington, USA
Mercedes-Benz Vermögens- und Beteiligungsgesellschaft mbH
Stuttgart, Germany
Mercedes-Benz Versicherung AG
Mercedes-Benz Vertrieb NFZ GmbH
Mercedes-Benz Vertrieb PKW GmbH
Mercedes-Benz Vietnam Ltd.
Mercedes-Benz Warszawa Sp. z o.o.
Mercedes-Benz Waterloo S.A.
Mercedes-Benz Wavre S.A.
Mercedes-Benz Wemmel N.V.
Mercedes-Benz Wholesale Receivables LLC
MFTA Canada, Inc.
Mitsubishi Fuso Truck and Bus Corporation
MITSUBISHI FUSO TRUCK EUROPE – Sociedade Europeia de
Automóveis, S.A.
Stuttgart, Germany
Stuttgart, Germany
Stuttgart, Germany
Ho Chi Minh City, Vietnam
Warsaw, Poland
Braine-L'Alleud, Belgium
Wavre, Belgium
Wemmel, Belgium
Wilmington, USA
Toronto, Canada
Kawasaki, Japan
Tramagal, Portugal
Mitsubishi Fuso Truck of America, Inc.
Logan Township, USA
Multifleet G.I.E
P.T. Mercedes-Benz Indonesia
PT Daimler Commercial Vehicles Indonesia
Le Bourget, France
Bogor, Indonesia
Jakarta, Indonesia
PT Daimler Commercial Vehicles Manufacturing Indonesia
Bogor, Indonesia
PT Mercedes-Benz Distribution Indonesia
Renting del Pacífico S.A.C.
Sandown Motor Holdings (Pty) Ltd
SelecTrucks of America LLC
Jakarta, Indonesia
Lima, Peru
Bryanston, South Africa
Portland, USA
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
66.91
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
70.00
100.00
100.00
100.00
100.00
100.00
100.00
89.29
100.00
100.00
50.10
100.00
100.00
100.00
100.00
100.00
62.62
100.00
5
5
5
5
5
7
Name of the Company Domicile, Country Capital share in %1Footnote F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 323
SelecTrucks of Toronto, Inc.
Silver Arrow Australia 2019-1
Silver Arrow Australia Trust 2019-1
Silver Arrow Canada GP Inc.
Silver Arrow Canada LP
Mississauga, Canada
Melbourne, Australia
Melbourne, Australia
Mississauga, Canada
Mississauga, Canada
SILVER ARROW CHINA 2017-2 RETAIL AUTO LOAN ASSET BACKED
NOTES TRUST c/o CITIC TRUST CO., LTD.
Beijing, China
SILVER ARROW CHINA 2018-1 RETAIL AUTO LOAN ASSET BACKED
NOTES TRUST c/o FOTIC: China Foreign Economy and Trade Trust
Co., LTD.
Beijing, China
SILVER ARROW CHINA 2018-2 RETAIL AUTO LOAN ASSET BACKED
NOTES TRUST c/o FOTIC: China Foreign Economy and Trade Trust
Co., LTD.
Beijing, China
SILVER ARROW CHINA 2019-1 RETAIL AUTO LOAN ASSET BACKED
NOTES TRUST c/o FOTIC: China Foreign Economy and Trade Trust
Co., LTD.
Beijing, China
Silver Arrow Lease Facility Trust
Silver Arrow Merfina 2019-2 s.r.l.
Silver Arrow S.A.
Silver Arrow UK Trust 2018-1
smart France S.A.S.
smart Vertriebs gmbh
Special Lease Systems (SLS) B.V
Star Assembly SRL
Sterling Truck Corporation
Wilmington, USA
Milan, Italy
Luxembourg, Luxembourg
Luxembourg, Luxembourg
Hambach, France
Berlin, Germany
Schiphol, Netherlands
Sebes, Romania
Portland, USA
Sumperská správa majetku k.s.
Prague, Czech Republic
Thomas Built Buses of Canada Limited
Thomas Built Buses, Inc.
TORC Robotics, Inc.
Trona Cogeneration Corporation
Ucafleet S.A.S
Calgary, Canada
High Point, USA
Baltimore, USA
Wilmington, USA
Le Bourget, France
Vierzehnte Vermögensverwaltungsgesellschaft DVB mbH
Stuttgart, Germany
Western Star Trucks Sales, Inc
Zuidlease B.V.
II. Unconsolidated subsidiaries2
Portland, USA
Sittard, Netherlands
Achtzehnte Vermögensverwaltungsgesellschaft DVB mbH
Stuttgart, Germany
AEG Olympia Office GmbH
Stuttgart, Germany
Anota Fahrzeug Service- und Vertriebsgesellschaft mbH
Berlin, Germany
Circulo Cerrado S.A. de Ahorro para Fines Determinados
Buenos Aires, Argentina
CoROS Corp.
Cúspide GmbH
Daimler AG & Co. Anlagenverwaltung OHG
Daimler Automotive de Venezuela C.A.
Menlo Park, USA
Stuttgart, Germany
Schönefeld, Germany
Valencia, Venezuela
Daimler Brand & IP Management Verwaltung GmbH
Stuttgart, Germany
Daimler Commercial Vehicles (Thailand) Ltd.
Daimler Commercial Vehicles Africa Ltd.
Bangkok, Thailand
Nairobi, Kenya
3
3
3
3
3
3
3
3
3
3
5
7
5
7
100.00
0.00
0.00
100.00
100.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
75.61
100.00
65.00
100.00
100.00
51.00
100.00
100.00
100.00
73.53
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Name of the Company Domicile, Country Capital share in %1Footnote
324 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Daimler Commercial Vehicles MENA FZE
Dubai, United Arab Emirates
Daimler Financial Services UK Trustees Ltd.
Milton Keynes, United Kingdom
Daimler Gastronomie GmbH
Esslingen am Neckar, Germany
Daimler Group Services Berlin GmbH
Berlin, Germany
Daimler Group Services Madrid, S.A.U.
San Sebastián de los Reyes, Spain
Daimler Innovation Technology (China) Co., Ltd.
Beijing, China
Daimler International Assignment Services USA, LLC
Wilmington, USA
Daimler Mitarbeiter Wohnfinanz GmbH
Daimler Pensionsfonds AG
Daimler Protics GmbH
Stuttgart, Germany
Stuttgart, Germany
Leinfelden-Echterdingen, Germany
Daimler Purchasing Coordination Corp.
Wilmington, USA
Daimler Truck Verwaltungsgesellschaft für Grundbesitz mbH
Schönefeld, Germany
Daimler Trucks Asia Taiwan Ltd.
Daimler TSS GmbH
Daimler UK Share Trustee Ltd.
Daimler UK Trustees Limited
Taipei, Taiwan
Ulm, Germany
Milton Keynes, United Kingdom
Milton Keynes, United Kingdom
Daimler Unterstützungskasse GmbH
Stuttgart, Germany
Deutsche Accumotive Verwaltungs-GmbH
Kirchheim unter Teck, Germany
Dreizehnte Vermögensverwaltungsgesellschaft DVB mbH
Stuttgart, Germany
Dritte Vermögensverwaltung PV GmbH
DTB Tech & Data Hub, Unipessoal Lda
EvoBus Reunion S. A.
EvoBus Russland OOO
EXOKNOX GmbH
Fleetboard Logistics GmbH
LAB1886 GmbH
Lab1886 USA LLC
Lapland Car Test Aktiebolag
LEONIE DMS DVB GmbH
Stuttgart, Germany
Tramagal, Portugal
Le Port, France
Moscow, Russian Federation
Stuttgart, Germany
Volkach, Germany
Stuttgart, Germany
Wilmington, USA
Arvidsjaur, Sweden
Stuttgart, Germany
MB GTC GmbH Mercedes-Benz Gebrauchtteile Center
Neuhausen auf den Fildern, Germany
MBition GmbH
Mercedes Benz Otomotiv Ticaret ve Hizmetler A.S.
Berlin, Germany
Istanbul, Turkey
Mercedes-Benz Adm. Consorcios Ltda.
São Bernardo do Campo, Brazil
Mercedes-Benz Camiones y Buses Argentina SAU.
Buenos Aires, Argentina
Mercedes-Benz CarMesh GmbH
Berlin, Germany
Mercedes-Benz Cars & Vans Brasil – Indústria e Comércio De
Veículos Ltda.
São Bernardo do Campo, Brazil
Mercedes-Benz Cars Middle East FZE
Dubai, United Arab Emirates
Mercedes-Benz Consulting GmbH
Leinfelden-Echterdingen, Germany
Mercedes-Benz Customer Assistance Center Maastricht N.V.
Maastricht, Netherlands
Mercedes-Benz Egypt S.A.E.
Mercedes-Benz Energy GmbH
Mercedes-Benz G GmbH
Mercedes-Benz Group Services Phils., Inc.
Mercedes-Benz Hungária Kft.
New Cairo, Egypt
Kamenz, Germany
Raaba, Austria
Cebu City, Philippines
Budapest, Hungary
6
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
96.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
66.91
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Name of the Company Domicile, Country Capital share in %1Footnote F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 325
Mercedes-Benz IDC Europe S.A.S.
Mercedes-Benz Manufacturing and Import Egypt
Valbonne, France
New Cairo, Egypt
Mercedes-Benz Manufacturing Rus Ltd
Moscow, Russian Federation
Mercedes-Benz Mobility Korea Ltd.
Mercedes-Benz Museum GmbH
Mercedes-Benz OD GmbH
Mercedes-Benz Project Consult GmbH
Seoul, South Korea
Stuttgart, Germany
Stuttgart, Germany
Stuttgart, Germany
Mercedes-Benz Research & Development Tel Aviv Ltd.
Tel Aviv, Israel
Mercedes-Benz Research and Development India Private Limited
Bangalore, India
Mercedes-Benz Servicios S.A.U
Mercedes-Benz Slovakia s.r.o.
Mercedes-Benz Subscription Services USA LLC
Mercedes-Benz Trucks & Buses Romania S.R.L.
Mercedes-Benz Trucks MENA Holding GmbH
Mercedes-Benz Trucks Österreich GmbH
Mercedes-Benz Trucks Portugal S.A.
Mercedes-Benz Vans Mobility S.L.
Buenos Aires, Argentina
Bratislava, Slovakia
Wilmington, USA
Bucharest, Romania
Stuttgart, Germany
Eugendorf, Austria
Sintra, Portugal
Alcobendas, Spain
Mercedes-Benz Vehículos Comerciales Argentina SAU i.L.
Buenos Aires, Argentina
Mercedes-Benz Venezuela S.A.
Mercedes-Benz.io GmbH
Mercedes-Benz.io Portugal Unipessoal Lda.
Valencia, Venezuela
Stuttgart, Germany
Lisbon, Portugal
MercedesService Card Beteiligungsgesellschaft mbH
Kleinostheim, Germany
Mitsubishi Fuso Bus Manufacturing Co., Ltd.
Toyama, Japan
Montajes y Estampaciones Metálicas, S.L.
Esparraguera, Spain
NAG Nationale Automobil-Gesellschaft Aktiengesellschaft
Stuttgart, Germany
PABCO Co., Ltd.
Porcher & Meffert Grundstücksgesellschaft mbH & Co.
Stuttgart OHG
Ebina, Japan
Schönefeld, Germany
R.T.C. Management Company Limited
Banbury, United Kingdom
RepairSmith, Inc.
El Segundo, USA
Sechste Vermögensverwaltungsgesellschaft Zeus mbH
Stuttgart, Germany
SelecTrucks Comércio de Veículos Ltda
SportChassis LLC
Star Transmission srl
STARKOM, proizvodnja in trgovina d.o.o.
T.O.C (Schweiz) AG
trapoFit GmbH
Vierte Vermögensverwaltung PV GmbH
Zweite Vermögensverwaltung PV GmbH
Mauá, Brazil
Clinton, USA
Cugir, Romania
Maribor, Slovenia
Schlieren, Switzerland
Chemnitz, Germany
Stuttgart, Germany
Stuttgart, Germany
Zweite Vermögensverwaltungsgesellschaft Zeus mbH
Stuttgart, Germany
100.00
100.00
80.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
51.00
100.00
100.00
100.00
88.89
100.00
100.00
100.00
0.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
4
7
3
III. Joint operations accounted for using proportionate consolidation
Cooperation Manufacturing Plant Aguascalientes, S.A.P.I de C.V.
Aguascalientes, Mexico
54.01
Name of the Company Domicile, Country Capital share in %1Footnote 326 F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
IV. Joint operations accounted for using the equity method
North America Fuel Systems Remanufacturing LLC
Kentwood, USA
V. Joint ventures accounted for using the equity method
Beijing Foton Daimler Automotive Co., Ltd
Blitz 18-353 GmbH
Daimler Kamaz Trucks Holding GmbH
Enbase Power GmbH
Fujian Benz Automotive Co., Ltd.
IONITY Holding GmbH & Co. KG
MB Service Japan Co., Ltd.
Polomex, S.A. de C.V.
SelecTrucks of Atlanta LLC
SelecTrucks of Houston LLC
SelecTrucks of Houston Wholesale LLC
Beijing, China
Munich, Germany
Vienna, Austria
Munich, Germany
Fuzhou, China
Munich, Germany
Hitachi, Japan
Garcia, Mexico
McDonough, USA
Houston, USA
Houston, USA
SelecTrucks of Omaha LLC
Council Bluffs, USA
Shenzhen DENZA New Energy Automotive Co. Ltd.
Shenzhen, China
ViaVan Technologies B.V.
Wagenplan B.V.
Wei Xing Tech. Co., Ltd.
VI. Associated companies accounted for using the equity method
BAIC Motor Corporation Ltd.
Beijing Benz Automotive Co., Ltd.
Blacklane GmbH
Bolt Technology OÜ
FUSO LAND TRANSPORT & Co. Ltd.
Amsterdam, Netherlands
Almere, Netherlands
Hangzhou, China
Beijing, China
Beijing, China
Berlin, Germany
Tallinn, Estonia
Kawasaki, Japan
KAMAZ PAO
Naberezhnye Chelny, Russian Federation
Kanagawa Mitsubishi Fuso Truck & Bus Sales Co., Ltd.
Yokohama, Japan
LSH Auto International Limited
Mobility Trader Holding GmbH
Hong Kong, China
Berlin, Germany
Okayama Mitsubishi Fuso Truck & Bus Sales Co., Ltd.
Okayamashi, Japan
P.T. Krama Yudha Tiga Berlian Motors
Jakarta, Indonesia
P.T. Mitsubishi Krama Yudha Motors and Manufacturing
Jakarta, Indonesia
There Holding B.V.
Toll4Europe GmbH
Verimi GmbH
Via Transportation Inc.
Rijswijk, Netherlands
Berlin, Germany
Berlin, Germany
New York, USA
VII. Joint operations, joint ventures, associated companies and substantial other investments
accounted for at (amortized) cost2
AFCC Automotive Fuel Cell Cooperation Corp.
BDF IP Holdings Ltd.
Beijing Mercedes-Benz Sales Service Co., Ltd.
ChargePoint Inc.
Burnaby, Canada
Burnaby, Canada
Beijing, China
Campbell, USA
8
50.00
50.00
50.00
50.00
25.10
50.00
25.00
33.40
26.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
9.55
49.00
30.57
9.44
21.67
15.00
43.83
15.00
20.00
50.00
30.00
32.28
29.71
15.00
14.79
12.20
50.10
33.00
51.00
5.74
Name of the Company Domicile, Country Capital share in %1Footnote F | CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 327
COBUS Industries GmbH
Esslinger Wohnungsbau GmbH
European Center for Information and Communication
Technologies ‒ EICT GmbH
EvoBus Hungária Kereskedelmi Kft.
Gottapark, Inc.
Wiesbaden, Germany
Esslingen am Neckar, Germany
Berlin, Germany
Budapest, Hungary
San Francisco, USA
Grundstücksgesellschaft Schlossplatz 1 mbH & Co. KG
Berlin, Germany
H2 Mobility Deutschland GmbH & Co. KG
hap2U SAS
Laureus World Sports Awards Limited
MercedesService Card GmbH & Co. KG
MFTB Taiwan Co., Ltd.
Momenta Global Limited
Berlin, Germany
Pontcharra, France
London, United Kingdom
Kleinostheim, Germany
Taipei, Taiwan
Grand Cayman, Cayman Islands
National Automobile Industry Company Ltd.
Jeddah, Saudi Arabia
Omuta Unso Co., Ltd.
Ohmuta, Japan
PDB – Partnership for Dummy Technology and Biomechanics GbR
Ingolstadt, Germany
Proterra Inc.
Rally Bus Corp.
REV Coach LLC
Sila Nanotechnologies Inc.
SK Gaming Beteiligungs GmbH
smart Automobile Co., Ltd.
smart-BRABUS GmbH
STARCAM s.r.o.
TASIAP GmbH
tiramizoo GmbH
Toyo Kotsu Co., Ltd.
Turo Inc.
VfB Stuttgart 1893 AG
Volocopter GmbH
what3words Ltd.
Burlingame, USA
New York, USA
Wilmington, USA
Dover, USA
Cologne, Germany
Ningbo, China
Bottrop, Germany
Most, Czech Republic
Stuttgart, Germany
Munich, Germany
Sannoseki, Japan
San Francisco, USA
Stuttgart, Germany
Bruchsal, Germany
London, United Kingdom
7
7
40.82
26.57
25.00
33.33
18.09
18.37
2.90
34.59
50.00
51.00
33.40
5.10
26.00
33.51
20.00
6.22
15.13
20.00
11.66
33.33
50.00
50.00
51.00
60.00
15.95
28.20
5.17
11.75
10.17
10.95
1 Shareholding pursuant to Section 16 of the German Stock Corporation Act (AktG)
2 For the accounting of unconsolidated subsidiaries, joint operations, joint ventures and associated companies we refer to Note 1.
3 Control due to economic circumstances
4 In liquidation
5 Qualification for exemption pursuant to Section 264 Subsection 3 and Section 264b of the German Commercial Code (HGB)
6 Control over the investment of the assets. No consolidation of the assets due to the contractual situation.
7 Daimler AG or one respectively several consolidated subsidiaries are the partners with unlimited liability.
Furthermore, Daimler AG or one respectively several consolidated subsidiaries are the partners with unlimited liability in
MOST Cooperation GbR i.L., Karlsruhe (Germany).
8 In January 2020, the company was renamed YOUR NOW Holding GmbH.
Name of the Company Domicile, Country Capital share in %1Footnote G
Further
Information
G | FURTHER INFORMATION | CONTENTS 329
G | Further Information
Responsibility Statement
Independent Auditor’s Report
Ten-Year Summary
Glossary
Index
Daimler Worldwide
330
331
340
342
343
344
s
t
n
e
t
n
o
C
i
d
e
n
b
m
o
C
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
s
n
o
i
s
i
v
i
D
e
h
T
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
t
r
o
p
e
R
l
i
a
c
n
a
n
F
-
n
o
N
i
d
e
t
a
d
i
l
o
s
n
o
C
s
t
n
e
m
e
t
a
t
S
l
i
a
c
n
a
n
F
i
n
o
i
t
a
m
r
o
f
n
I
r
e
h
t
r
u
F
330 G | FURTHER INFORMATION | RESPONSIBILITY STATEMENT
Responsibility Statement
To the best of our knowledge, and in accordance with the
applicable reporting principles, the consolidated financial
statements give a true and fair view of the financial position,
cash flows and profit or loss of the Group, and the Group
management report, which has been combined with the
management report for Daimler AG, includes a fair review of
the development and performance of the business and
the position of the Group, together with a description of the
principal opportunities and risks associated with the
expected development of the Group.
Stuttgart, February 19, 2020
Ola Källenius
Martin Daum
Renata Jungo Brüngger
Wilfried Porth
Markus Schäfer
Britta Seeger
Hubertus Troska
Harald Wilhelm
G | FURTHER INFORMATION | INDEPENDENT AUDITOR’S REPORT 331
Independent Auditor’s Report
To: Daimler AG, Stuttgart
Report on the Audit of the Consolidated
Financial Statements and of the Combined
Management Report
Audit opinions
We have audited the consolidated financial statements of
Daimler AG, Stuttgart, and its subsidiaries (the Group), which
comprise the consolidated statement of financial position
as of December 31, 2019, and the consolidated statement of
income, consolidated statement of comprehensive income/
loss, consolidated statement of changes in equity and consol-
idated statement of cash flows for the financial year from
January 1 to December 31, 2019, as well as notes to the con-
solidated financial statements, including a summary of signifi-
cant accounting policies. In addition, we have audited the
combined management report for the financial year from Jan-
uary 1 to December 31, 2019. In accordance with the German
legal regulations, we have not audited the content of the ele-
ments of the combined management report referred to in the
“Other information” section of our auditor’s report.
The combined management report includes cross-references
not foreseen by law that are marked as unaudited. In accor-
dance with the German legal regulations, we have not audited
the content of these cross-references and the information to
which these cross-references relate.
In our opinion, on the basis of the knowledge obtained in the
audit
– the accompanying consolidated financial statements com-
ply, in all material respects, with the IFRSs as adopted by the
EU, and the additional requirements of German commercial
law pursuant to Section 315e paragraph 1 HGB [Handels-
gesetzbuch: German Commercial Code] and, in compliance
with these requirements, give a true and fair view of the
assets, liabilities and financial position of the Group as of
December 31, 2019, and of its financial performance for the
financial year from January 1 to December 31, 2019, and
– the accompanying combined management report as a whole
provides an appropriate view of the Group’s position. In all
material respects, the combined management report is con-
sistent with the consolidated financial statements, complies
with German legal requirements and appropriately presents
the opportunities and risks of future development. Our opin-
ion on the combined management report does not cover the
elements of the combined management report referred to in
the “Other information” section of our auditor’s report. The
combined management report includes cross-references not
foreseen by law that are marked as unaudited. Our opinion
does not cover these cross-references and the information
to which these cross-references relate.
Pursuant to Section 322 paragraph 3 sentence 1 HGB, we
declare that our audit has not led to any reservations relating
to the legal compliance of the consolidated financial state-
ments and of the combined management report.
Key Audit Matters in the Audit of the
Consolidated Financial Statements
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the consoli-
dated financial statements for the financial year from January 1
to December 31, 2019. These matters were addressed in the
context of our audit of the consolidated financial statements
as a whole, and, in forming our opinion thereon, we do not pro-
vide a separate opinion on these matters.
332 G | FURTHER INFORMATION | INDEPENDENT AUDITOR’S REPORT
Basis for the Opinions
We conducted our audit of the consolidated financial state-
ments and of the combined management report in accordance
with Section 317 HGB and EU Audit Regulation (No. 537/2014;
referred to subsequently as the “EU Audit Regulation”) and
in compliance with German Generally Accepted Standards for
Financial Statement Audits promulgated by the Institut der
Wirtschaftsprüfer [Institute of Public Auditors in Germany]
(IDW). We performed the audit of the consolidated financial
statements in supplementary compliance with the Interna-
tional Standards on Auditing (ISAs). Our responsibilities under
those requirements, principles and standards are further
described in the “Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements and of the Combined
Management Report” section of our auditor’s report. We are
independent of the group entities in accordance with the
requirements of European law and German commercial and
professional law, and we have fulfilled our other German pro-
fessional responsibilities in accordance with these require-
ments. In addition, in accordance with Article 10 paragraph 2
letter f) of the EU Audit Regulation, we declare that we have
not provided non-audit services prohibited under Article 5
paragraph 1 of the EU Audit Regulation. We believe that the
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinions on the consolidated financial
statements and on the combined management report.
G | FURTHER INFORMATION | INDEPENDENT AUDITOR’S REPORT 333
Loss Allowances on Receivables from Financial
Services
Please refer with regard to the accounting policies and methods
applied to the notes to the consolidated financial statements
E Note 2 “Accounting estimates and management judge-
ments”. Further information on allowances on receivables from
financial services can be found in the notes to the consolidated
financial statements in E Note 1 “Significant Accounting Poli-
cies”, in E Note 14 “Receivables from financial services”,
in E Note 33 “Management of financial risks” and in the
comments in the combined management report in the section
entitled “Industry and business risks and opportunities”.
The Risk for the Consolidated Financial Statements
Receivables from financial services (€ 103,661 million) resulting
from the Group’s financing and leasing activities include
receivables from sales financing with customers, receivables
from sales financing with dealers and receivables from
finance lease contracts. The allowances on these receivables
amounted at the balance sheet date to € 1,308 million.
The calculation of the loss allowances is based on expected
credit losses and therefore also includes expectations regard-
ing the future. Recognition of the expected credit losses is
carried out by means of a three-parameter procedure for the
determination of loss allowances. The following is among other
things taken into account in this connection: various factors
determining the value, such as the determination of statistical
default probabilities and loss rates, the possible receivable
amount on default, the parameter transfer criteria that are
related to a significant change in the default risk of borrowers,
and the calculation of future cash flows. Furthermore, macro-
economic scenarios flow into the calculation, the identification
of which to a high degree includes discretionary judgments
and uncertainties.
The risk for the financial statements is that the credit-worthi-
ness of customers and future cash flows is misjudged or
that the calculation of the risk provision parameter is incorrect
so that allowances are not recognized or are insufficient.
Impairment Risk on Operating Leases
Please refer with regard to the accounting policies and methods
applied to the notes to the consolidated financial statements
E Note 1 “Significant accounting policies” and E Note 2
“Accounting estimates and management judgments”. Further
information on the operating leases can be found in the notes
to the consolidated financial statements in E Note 12
“Equipment on operating leases” and in the comments in the
combined management report in the section entitled “Indus-
try and business risks and opportunities”.
The Risk for the Consolidated Financial Statements
The balance sheet caption “Equipment on operating leases”
(€ 51,482 million) comprises among other things Mercedes-
Benz passenger cars, which are purchased by non-group deal-
ers or other third parties and are the subject of an operating
lease with the Daimler Group. An impairment loss exists with
regard to these vehicles that is primarily dependent on the
residual value achievable at the end of the lease. These future
residual values are dependent on the situation in the used
vehicle markets prevailing when the vehicles are returned. The
future-oriented valuation is based on a number of discretionary
assumptions. The risk for the financial statements is that any
impairment losses will not be recognized or that the amounts
recognized will be inadequate.
Our Audit Approach
We audited the recoverability of the Mercedes-Benz passenger
cars purchased externally in the balance sheet caption “Equip-
ment on operating leases”. We investigated and appraised the
indications assumed by the Group for any need for an impair-
ment loss and where necessary obtained an understanding of
the write-downs calculated by Daimler. We have assessed
Daimler’s evaluation with regard to the residual values achiev-
able by the end of the terms of the leases. In this connection,
we in particular critically reviewed the main influencing factors,
such as the expected number of returns from leasing, the
current marketing results in order to assess the accuracy of the
estimates and future vehicle model changes. For significant
markets we furthermore also audited the consistency of the
assumptions made by Daimler with residual value forecasts by
independent expert third parties.
Our Observations
The assumptions and assessments providing the basis for the
assessment of the recoverability of the externally purchased
Mercedes-Benz passenger cars in the statement of financial
position caption “Equipment on operating leases” and the
recorded impairment losses are appropriate.
334 G | FURTHER INFORMATION | INDEPENDENT AUDITOR’S REPORT
Our Audit Approach
We obtained a comprehensive understanding of the develop-
ment of the portfolios, the associated counterparty default
risks and the processes for identifying, managing, monitoring
and measuring credit risks by inspecting analyses and risk
reports, interrogations, review of guidelines and working
instructions, checking the defined methods and their imple-
mentation and checking and walking through the validation
process and the validation reports based on samples.
We audited the appropriateness and effectiveness of the inter-
nal control system with regard to the risk classification
process and risk models and the identification of the factors
determining the value and the loss allowances, also by
rechecking the calculations. To this end, we also evaluated the
relevant IT systems and internal procedures. In addition to
the audit by our IT specialists of the propriety of the IT systems
affected and related interfaces to ensure the completeness
and correctness of the data, the audit also included the audit of
automatic controls for data entry and data processing. The
main focus of our audit was the evaluation of the methodical
approach in the determination of risk categories, default prob-
abilities and loss rates that are derived from historical data.
We obtained an understanding of this based on a risk-oriented
selection of credit portfolios. We satisfied ourselves with
regard to the appropriateness of significant risk parameters
based on the results of a validation performed by Daimler
Mobility and evaluated the adjustments of the parameters to
the current market situation. In this connection, we further-
more audited the data supporting the validations on the basis
of a conscious sample. In addition, we satisfied ourselves in
conjunction with a conscious sample of individual cases that
the risk classification is correct and that the amount of the cal-
culated specific allowance is appropriate.
Our Observations
The methodical approach, the procedures and the processes
to calculate the impairment losses and the assumptions and
risk parameters flowing into the measurement are appropriate
to identify the credit risks in good time and to determine the
recognition of adequate impairment losses.
Measurement of the Provision for
Product Warranties
Please refer with regard to the accounting policies and methods
applied to the notes to the consolidated financial statements
in E Note 2 “Accounting estimates and management judge-
ments”. Further information on the guarantees and product
warranties can be found in the notes to the consolidated finan-
cial statements E Note 23 “Provisions for other risks” and
in the comments in the combined management report in the
section entitled “Company-specific risks and opportunities –
Warranty and goodwill cases”.
The Risk for the Consolidated Financial Statements
The provision for product warranties amounts to € 8,708 mil-
lion and is included in the provisions for other risks.
Daimler faces various claims under product guarantees, or
grants various kinds of product warranties, which are entered
into for the error-free functioning of a Daimler product sold
or service rendered over a defined period of time. In order to
confirm or reassess future guarantee, warranty and goodwill
expenses, continuously updated information on the nature and
volume and the remedying of faults that have occurred is
recorded and analyzed at the level of the business unit, model
series, damage key and sales year.
Significant uncertainty for the calculation of the provision
arises with regard to the future loss event. The risk for the
consolidated financial statements is that the provision is not
properly measured.
Our Audit Approach
Our audit procedures included among other things the evalua-
tion of the process to calculate the provision for product
warranties and the evaluation of the relevant assumptions and
their derivation for the measurement of the provision. These
include primarily assumptions on expected susceptibility
to and the course of damage, and in addition the monetary
value of the damage per vehicle based on actual warranty,
guarantee and goodwill losses. Based on historical analyses,
we assessed the accuracy of the forecasts of past warranty,
guarantee and goodwill costs. We also checked that updated
assessments of the future repair costs and procedures were
taken into account. We obtained an understanding for the
underlying numbers of vehicles through the actual unit sales.
Our Observations
The calculation methods and the assumptions made are
appropriate.
G | FURTHER INFORMATION | INDEPENDENT AUDITOR’S REPORT 335
b) Diesel emission behavior: administrative proceedings
Various federal and state authorities and further institutions
worldwide have made inquiries and/or have carried out investi-
gations and/or proceedings and/or have issued directives,
or, in the case of the Stuttgart district attorney’s office, issued
an administrative order imposing a fine. These relate in partic-
ular to test results and emissions control systems in Mercedes-
Benz diesel vehicles and/or the interaction of the Company
with the relevant state and federal authorities as well as related
legal issues and implications, including those under applicable
environmental, securities and criminal and antitrust laws.
c) Antitrust proceedings (including actions for damages)
Following the imposition of a fine by the European Commission
against Daimler AG and other truck manufacturers in July 2016,
truck customers have raised damage claims against Daimler AG.
Since July 25, 2017, several class action lawsuits have been
filed in the USA and in Canada against Daimler AG and other
automobile manufacturers and several of their North Ameri-
can subsidiaries. The plaintiffs claim to have suffered losses
because it is alleged that the defendants have engaged since
the nineteen-nineties in anticompetitive behavior with regard
to motor vehicle technology, costs, suppliers, markets and
other anticompetitive matters, including diesel exhaust
cleansing technology.
Daimler AG already filed an application for immunity (“leniency
application”) some time ago with the European Commission.
In 2018, the European Commission launched a formal investi-
gation into possible collusion regarding emission reduction
systems. In connection with this investigation, the European
Commission forwarded a statement of objections to Daimler
and other automobile manufacturers in April 2019.
The recognition and measurement of the provisions set up for
the legal proceedings are based on discretionary assessments
and assumptions by the legal representatives.
The risk for the consolidated financial statements is that provi-
sions for legal proceedings are not set up or are inadequate.
Accounting Treatment of Legal Proceedings
Please refer with regard to the accounting policies and methods
applied to the notes to the consolidated financial statements
in E Note 2 “Accounting estimates and management judge-
ments”. Further information on the legal proceedings can
be found in the notes to the consolidated financial statements
E Note 23 “Provision for other risks” and E Note 30
“Legal proceedings” and in the comments in the combined
management report in the section entitled “Risks from
guarantees, legal and tax risks – legal risks”
The Risk for the Consolidated Financial Statements
Daimler is confronted by various legal proceedings, claims and
governmental investigations and administrative orders (legal
proceedings) on a wide range of topics, including for example
vehicle safety, emissions, fuel economy, financial services,
dealer, supplier and other contractual relationships, intellectual
property rights, product warranties, environmental matters,
antitrust matters (including actions for damages) and share-
holder matters. Legal proceedings relating to products deal
with claims on account of alleged vehicle defects. Some of
these claims are asserted by way of class action lawsuits.
If the outcome of such legal proceedings is detrimental to
Daimler AG, the Company may be required to pay substantial
compensatory and punitive damages or to undertake service
actions, recall campaigns, monetary penalties or other costly
actions.
Whether the recognition of a provision and, if so, in what
amount it is necessary on account of legal proceedings is
dependent to a high degree on discretionary estimates
and assumptions by the legal representatives. In view of this
and the monetary amounts involved with regard to the risks,
the following legal proceedings of Daimler are in our opinion
of particular importance.
a) Diesel emission behavior: class action and other lawsuits
in the USA, Canada and Germany
The use of devices that impermissibly impair the effectiveness
of emission control systems in reducing nitrogen-oxide
(NOX) emissions and which are supposed to cause excessive
emissions from vehicles with diesel engines is alleged in
consumer class action lawsuits in the USA and Canada and in
a lawsuit of the State of Arizona. In addition, the plaintiffs
claim that consumers were deliberately misled in connection
with the advertising for Mercedes-Benz diesel vehicles. Fur-
thermore, it is alleged in one of these class action lawsuits
that Daimler had conspired with a component supplier in
order to deceive U.S. supervisory authorities and consumers.
In Germany, a large number of lawsuits from investors are fur-
thermore pending on account of the alleged violation of disclo-
sure requirements. The plaintiffs claim that Daimler failed to
publish insider knowledge immediately in connection with the
emission behavior of its diesel vehicles and in addition issued
erroneous and misleading statements. They furthermore claim
that the purchase price of their Daimler shares would have
been lower if Daimler had reported in accordance with its obli-
gations.
336 G | FURTHER INFORMATION | INDEPENDENT AUDITOR’S REPORT
Our Audit Approach
Our audit procedures comprised firstly an evaluation of the
process established by the Company to ensure the recording,
the estimation of the outcome of the proceedings and the
reflection in the annual financial statements of the legal pro-
ceedings. Secondly, we held discussions with the internal legal
department and with further departments familiar with the
matters under dispute and the Company’s external advisors
and attorneys, in order to obtain explanations on the develop-
ments and the reasons that had led to the respective estima-
tions. In addition, we reviewed the underlying documents and
minutes. As of the reporting date, assessments were available
from external attorneys, which support the assessment of the
risks by the legal representatives.
Our Observations
The discretionary assessments and assumptions are appro-
priate.
Other Information
The legal representatives and the Supervisory Board are
responsible for the other information. The other information
comprises the following elements of the combined manage-
ment report, the content of which we have not audited:
– the combined declaration on corporate management, which
is referred to in the combined management report, and
– the combined separate nonfinancial report, which is referred
to in the combined management report.
Finally, we evaluated the appropriateness of the description of
the aforementioned legal proceedings in the notes to the con-
solidated financial statements.
The other information also includes the remaining parts of the
annual report.
The other information does not include the consolidated finan-
cial statements, the audited disclosures in the management
report and our related auditor’s report.
Our opinions on the consolidated financial statements and on
the combined management report do not cover the other infor-
mation, and consequently we do not express an opinion or any
other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read
the other information and, in so doing, to consider whether the
other information
– is materially inconsistent with the consolidated financial
statements, the audited disclosures in the management
report or our knowledge obtained in the audit, or
– otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in
this regard.
As instructed, we have performed a separate business man-
agement review of the combined separate non-financial state-
ment. Please refer with regard to the nature, scope and results
of this business management review to our audit opinion dated
February 19, 2020.
G | FURTHER INFORMATION | INDEPENDENT AUDITOR’S REPORT 337
Responsibilities of the Legal Representatives and
the Supervisory Board for the Consolidated Financial
Statements and the Combined Management Report
The legal representatives are responsible for the preparation of
the consolidated financial statements that comply, in all mate-
rial respects, with IFRSs as adopted by the EU and the addi-
tional requirements of German commercial law pursuant to
Section 315e paragraph 1 HGB and that the consolidated finan-
cial statements, in compliance with these requirements, give a
true and fair view of the assets, liabilities, financial position
and financial performance of the Group. In addition, the legal
representatives are responsible for such internal control as
they have determined necessary to enable the preparation of
consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements and of the Combined Management
Report
Our objectives are to obtain reasonable assurance about
whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or
error, and whether the combined management report as a
whole provides an appropriate view of the Group´s position
and, in all material respects, is consistent with the consoli-
dated financial statements and the knowledge obtained in the
audit, complies with the German legal requirements and appro-
priately presents the opportunities and risks of future develop-
ment, as well as to issue an auditor’s report that includes our
opinions on the consolidated financial statements and on the
combined management report.
In preparing the consolidated financial statements, the legal
representatives are responsible for assessing the Group’s abil-
ity to continue as a going concern. They are also responsible
for disclosing, as applicable, matters related to going concern.
In addition, they are responsible for financial reporting based
on the going concern basis of accounting unless there is an
intention to liquidate the Group or to cease operations, or there
is no realistic alternative but to do so.
Furthermore, the legal representatives are responsible for the
preparation of the combined management report that, as a
whole, provides an appropriate view of the Group`s position
and is, in all material respects, consistent with the consoli-
dated financial statements, complies with German legal
requirements, and appropriately presents the opportunities
and risks of future development. In addition, the legal repre-
sentatives are responsible for such arrangements and mea-
sures (systems) as they have considered necessary to enable
the preparation of a combined management report that is in
accordance with the applicable German legal requirements,
and to be able to provide sufficient appropriate evidence for
the assertions in the combined management report.
The Supervisory Board is responsible for overseeing the
Group’s financial reporting process for the preparation of
the consolidated financial statements and the combined
management report.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Section
317 HGB and the EU Audit Regulation and in compliance with
German Generally Accepted Standards for Financial Statement
Audits promulgated by the Institut der Wirtschaftsprüfer (IDW)
and supplementary compliance with the ISAs will always
detect a material misstatement. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
consolidated financial statements and this combined manage-
ment report.
We exercise professional judgment and maintain professional
skepticism throughout the audit. We also
– identify and assess the risks of material misstatement of
the consolidated financial statements and of the combined
management report, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinions. The risk of not detecting a
material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal control.
– obtain an understanding of internal control relevant to the
audit of the consolidated financial statements and of
arrangements and measures (systems) relevant to the audit
of the combined management report in order to design audit
procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effec-
tiveness of these systems.
338 G | FURTHER INFORMATION | INDEPENDENT AUDITOR’S REPORT
– evaluate the appropriateness of accounting policies used by
management and the reasonableness of estimates made by
management and related disclosures.
– evaluate the consistency of the combined management
report with the consolidated financial statements, its confor-
mity with [German] law, and the view of the Group’s position
it provides.
– conclude on the appropriateness of the use by the legal rep-
resentatives of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may
cast significant doubt on the Group`s ability to continue as a
going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in the auditor’s
report to the related disclosures in the cosolidated financial
statements and in the combined management report or, if
such disclosures are inadequate, to modify our respective
opinions. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to
be able to continue as a going concern.
– evaluate the overall presentation, structure and content of
the consolidated financial statements, including the disclo-
sures, and whether the consolidated financial statements
present the underlying transactions and events in a manner
that the consolidated financial statements give a true and
fair view of the assets, liabilities, financial position and finan-
cial performance of the Group in compliance with IFRSs as
adopted by the EU and the additional requirements of Ger-
man commercial law pursuant to Section 315e paragraph 1
HGB.
– obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the Group to express opinions on the consolidated
financial statements and on the combined management
report. We are responsible for the direction, supervision
and performance of the group audit. We remain solely
responsible for our opinions.
– perform audit procedures on the prospective information
presented by the legal representatives in the combined man-
agement report. On the basis of sufficient appropriate audit
evidence, we evaluate, in particular, the significant assump-
tions used by the legal representatives as a basis for the pro-
spective information, and evaluate the proper derivation of
the prospective information from these assumptions. We do
not express a separate opinion on the prospective informa-
tion and on the assumptions used as a basis. There is a sub-
stantial unavoidable risk that future events will differ materi-
ally from the prospective information.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficien-
cies in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with the relevant independence require-
ments, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our indepen-
dence, and where applicable, the related safeguards.
From the matters communicated with those charged with gov-
ernance, we determine those matters that were of most signifi-
cance in the audit of the consolidated financial statements of
the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless laws
or other legal regulations preclude public disclosure of the
matter.
G | FURTHER INFORMATION | INDEPENDENT AUDITOR’S REPORT 339
Other Legal and Regulatory Requirements
Further Information pursuant to Article 10 of the EU Audit
Regulation
We were elected as group auditor by the Annual Shareholders’
Meeting on May 22, 2019. We were engaged by the Supervi-
sory Board on June 24, 2019. We have been the group auditor
of Daimler AG without interruption since the financial
year 1998.
We declare that the opinions expressed in this auditor’s report
are consistent with the additional report to the audit commit-
tee pursuant to Article 11 of the EU Audit Regulation (long-form
audit report).
German Public Auditor Responsible for the Engagement
The German Public Auditor responsible for the engagement is
Dr. Axel Thümler.
Stuttgart, February 19, 2020
KPMG AG
Wirtschaftsprüfungsgesellschaft
(Original German version signed by:)
Sailer
Wirtschaftsprüfer
(German Public Auditor)
Dr. Thümler
Wirtschaftsprüfer
(German Public Auditor)
340 G | FURTHER INFORMATION | TEN-YEAR SUMMARY
Ten-Year Summary
G.01
€ amounts in millions
From the statements of income
Revenue
Personnel expenses1
Research and development expenditure2
thereof capitalized
EBIT1
Operating margin (%)1
Profit (loss) before income taxes1
Net operating profit (loss)1
as % of net assets (RONA)1, 3
Net profit (loss)1
Net profit (loss) per share (€)1
Diluted net profit (loss) per share (€)1
Total dividend
Dividend per share (€)
2010
2011
2012
2013
2014
2015
2016
20174
2018
2019
97,761 106,540 114,297 117,982 129,872 149,467 153,261 164,154 167,362 172,745
16,454
22,186
19,607
21,141
18,753
18,002
20,949
22,432
17,424
22,657
4,849
1,373
7,274
7.4
6,628
5,120
17.5
4,674
4.28
4.28
1,971
1.85
5,634
1,460
8,755
8.2
8,449
6,240
19.9
6,029
5.32
5.31
2,346
2.20
5,644
1,465
8,820
7.7
8,116
7,302
19.6
6,830
6.02
6.02
2,349
2.20
5,489
1,284
5,680
1,148
6,564
1,804
7,572
2,315
8,711
2,773
9,107
2,526
10,815
10,752
13,186
12,902
14,348
11,132
9.2
8.3
8.8
8.4
8.7
6.7
10,139
10,173
12,744
12,574
13,967
10,595
9,173
22.6
8,720
6.40
6.40
2,407
2.25
7,678
18.8
7,290
6.51
6.51
2,621
2.45
9,007
20.1
8,711
7.87
7.87
3,477
3.25
9,007
10,880
19.1
22.5
8,784
10,617
7.97
7.97
3,477
3.25
9.61
9.61
3,905
3.65
7,963
14.8
7,582
6.78
6.78
3,477
3.25
From the statements of financial position
Property, plant and equipment
17,593
19,180
20,599
21,779
23,182
24,322
26,381
27,981
30,948
Leased equipment
Other non-current assets1
Inventories
Liquid assets
Other current assets
Total assets1
Shareholders’ equity1
thereof share capital
Equity ratio Group (%)1
Equity ratio industrial business (%)1
Non-current liabilities1
Current liabilities1
Net liquidity industrial business
Net assets (average)1, 3
19,925
22,811
26,058
28,160
33,050
38,942
46,942
47,074
49,476
41,309
45,023
48,947
48,138
56,258
62,055
67,613
73,394
79,582
14,544
17,081
17,720
17,349
20,864
23,760
25,384
25,686
29,489
10,903
9,576
10,996
11,053
9,667
9,936
10,981
12,072
15,853
31,556
79,160
135,830 148,132 163,062 168,518 189,635 217,166 242,988 255,345 281,619 302,438
58,151
46,614
42,039
38,742
65,687
76,271
69,138
34,461
37,953
41,337
39,330
43,363
44,584
54,624
59,133
65,159
66,053
62,841
3,058
3,060
3,063
3,069
3,070
3,070
26.5
45.8
26.3
46.4
22.7
39.8
24.3
43.4
22.1
40.8
23.6
44.2
44,738
51,940
65,016
66,047
78,077
85,461
53,139
54,855
58,716
59,108
66,974
77,081
11,938
11,981
11,508
13,834
16,953
18,580
3,070
22.9
3,070
24.0
3,070
22.2
3,070
20.5
46.4
44.7
42.8
36.7
99,398 102,562 117,614 133,795
97,952 105,802
84,457
16,288
87,624
16,597
19,737
10,997
29,338
31,426
37,521
40,648
40,779
44,796
47,054
48,446
53,809
63,746
9,662
3,076
4,329
2.5
3,830
3,068
4.8
2,709
2.22
2.22
963
0.90
37,143
51,482
86,013
29,757
18,883
G | FURTHER INFORMATION | TEN-YEAR SUMMARY 341
€ amounts in millions
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
From the statements of cash flows
Investments in property, plant and equipment
Depreciation and amortization
Cash provided by (used for) operating activities
3,653
3,364
8,544
4,158
3,575
-696
Cash provided by (used for) investing activities
-313
-6,537
4,827
4,067
-1,100
-8,864
Cash provided by (used for) financing activities
Free cash flow of the industrial business
-7,551
5,432
5,842
11,506
989
1,452
4,975
4,368
3,285
-6,829
3,855
4,842
4,844
4,999
-1,274
-2,709
2,274
5,479
5,075
5,384
222
5,889
5,478
3,711
-9,722
-14,666
6,744
5,676
-1,652
-9,518
12,009
13,129
7,534
6,305
7,199
7,751
343
7,888
-9,921 -10,607
13,226
5,628
3,874
2,005
2,898
1,368
9,631
3,960
From the stock exchanges
Share price at year-end (€)
50.73
33.92
41.32
62.90
68.97
77.58
70.72
70.80
Average shares outstanding (in millions)
1,050.8
1,066.0
1,066.8
1,068.8
1,069.8
1,069.8
1,069.8
1,069.8
45.91
49.37
1,069.8 1,069.8
Average diluted shares outstanding
(in millions)
1,051.5
1,067.1
1,067.1
1,069.1
1,069.8
1,069.8
1,069.8
1,069.8
1,069.8 1,069.8
Ratings
Credit rating, long-term
S&P
Moody’s
Fitch
DBRS
Scope
BBB+
BBB+
A3
BBB+
A3
A-
A-
A3
A-
A-
A3
A-
A-
A3
A-
A-
A3
A-
A
A3
A-
A (low)
A (low)
A (low)
A (low)
A (low)
A (low)
A (low)
–
–
–
–
–
–
–
A
A2
A-
A
A
A
A2
A-
A
A
A-
A3
A-
A
A
Average annual number of employees
258,120 267,274 274,605 275,384 279,857 284,562 284,957 289,530 298,465 301,839
1 The figures for the year 2012 have been adjusted, primarily due to effects arising from application of the amended version of IAS 19.
2 The figure for the year 2013 has been adjusted due to reclassifications within functional costs.
3 In the context of fine tuning the performance measurement system, the definition of net assets has been adjusted with retroactive effect as of 2015.
4 Several figures for the year 2017 have been adjusted due to the effects of first-time adoption of IFRS 15 and IFRS 9.
342 G | FURTHER INFORMATION | GLOSSARY
Glossary
Compliance
By the term compliance, we understand adherence to all laws,
rules, regulations and voluntary com mitments, as well as
the related internal guidelines and policies in connection with
all activities of the Daimler Group.
Goodwill
Goodwill represents the excess of the cost of an acquired
business over the fair values assigned to the separately
identifiable assets acquired and liabilities assumed.
Consolidated Group
The consolidated Group is the total of all those companies that
are included in the consolidated financial statements.
Corporate governance
The term corporate governance applies to the proper manage-
ment and supervision of a company. The structure of corporate
governance at Daimler AG is determined by Germany’s Stock
Corporation Act (AktG), Codetermination Act (MitbestG) and
capital-market legislation.
Cost of capital
The cost of capital is the product of the average amount
of capital employed and the cost-of-capital rate. The cost-of-
capital rate is derived from the investors’ required rate of
return. E page 64
CSR – corporate social responsibility
A collective term for the social responsibility assumed by com-
panies, including economic, environmental and social aspects.
Design for the Environment
Design for the Environment (DfE) is a concept for reducing the
environmental impact of products, processes and services.
EBIT
Earnings before interest and taxes are the measure
of operating profit before taxes. E pages 70 ff
IFRS – International Financial Reporting Standards
The IFRS are a set of standards and interpretations for compa-
nies’ external accounting and financial reporting developed
by an independent private-sector committee, the International
Accounting Standards Board (IASB).
Integrity Code
The Integrity Code, which was updated in 2019, defines the
main corporate principles. It makes clear what we understand
by integrity and which values and principles guide us. The
key principles include integrating the environment into our work
and complying with applicable laws and regulations.
INTELLIGENT DRIVE
With this new technology from Mercedes-Benz, thanks to
improved environment sensors, intelligent assistance systems
analyze complex situations and recognize potential dangers
in road traffic even better.
Lithium-ion batteries
They are at the heart of the current generation of electric
vehicles. Compared with conventional batteries, lithium-ion
batteries are considerably smaller and feature significantly
higher power density, short charging times and long lives.
NEDC – New European Driving Cycle
A measuring method used in Europe for the objective
assessment of vehicles’ fuel consumption, which is gradually
being replaced by WLTP since September 2017.
Equity method
Accounting and valuation method for share holdings
in associated companies and joint ventures.
Rating
An assessment of a company’s creditworthiness issued
by a rating agency.
EU30
The region EU30 includes the 28 member states of the
European Union plus Norway and Switzerland.
Fair value
The amount for which an asset or liability could be exchanged
in an arm’s length transaction between knowledgeable
and willing parties who are independent of each other.
RDE
Since September 2017, emissions of particulate matter, nitro-
gen oxides and other pollutants have had to be measured using
mobile equipment and the Real Driving Emissions (RDE) test.
E page 149
G | FURTHER INFORMATION | INDEX 343
Index
Ride hailing
The app-based provision of rides in cars driven by taxi drivers,
licensed rental car drivers or private drivers.
ROE – return on equity
The profitability of Daimler Financial Services is measured
by return on equity. ROE is defined as the quotient of EBIT and
shareholders’ equity.
ROS – return on sales
The profitability of the industrial divisions is measured
by return on sales. ROS is defined as the quotient of EBIT and
revenue.
SAE Levels 0-5
SAE Levels 0-5 are a classification system defined by SAE
International for the various types of automated driving. The
SAE levels focus, among other things, on the extent to which
human drivers must still be alert and ready to intervene.
The stages of automation are defined as follows:
0: no automation, 1: driver assistance, 2: partial automation,
3: conditional automation, 4: high automation, 5: full automation.
Truck weight classes
Europe: up to 6 tons (light-duty)
over 6 tons (medium- and heavy-duty)
NAFTA: classes 6 and 7; 8.9-15 tons (medium-duty)
class 8; over 15 tons (heavy-duty)
Value added
Value added indicates the extent to which operating profit
exceeds the cost of capital. When value added is positive,
return on net assets is higher than the cost of capital.
E page 75
Value at risk
This measures the potential future loss (related to market
value) for a given portfolio in a certain period and for which
there is a certain probability that it will not be exceeded.
Annual Shareholders’ Meeting
Bonds
Capital expenditure
Cash flows
CO2 reductions
Connectivity
Compliance
Consolidated Group
Corporate governance
Digitization
Dividend
Earnings per share (EPS)
EBIT
Electric mobility
Financial income
Income taxes
Independent auditor’s report
Innovations
Integrity
Integrity Code
Investor Relations
Mobility services
Net assets
Net profit
Pension obligations
Portfolio changes
Production
Profitability
Ratings
Remuneration system
Revenue
ROE – return on equity
ROS – return on sales
Segment reporting
Shareholders’ equity
Shares
Strategy
Sustainability
Unit sales
Value added
Workforce
50
51, 83 f
82 ff, 153
78 ff, 107, 153 f, 227
200 ff
23, 55
105 ff, 212 ff
247 f
35 ff, 180 ff
12 f, 23, 52
49, 75
48 ff, 311
70 ff
16 ff, 55 ff, 95, 154
75, 250 ff
73, 236 ff
331 ff
20 ff, 52 ff
211 ff
186,105
50
31 f, 177 f
76
88, 228
91, 277 ff
62 f
60 ff
70 ff, 89, 224
85
108 ff
70, 152, 249 f
64, 72
64, 158, 166, 171, 174
308 ff
86 ff, 228
48 ff, 132 f
52 ff
198 ff, 220 ff
67 ff, 151, 158, 166, 171,174
63, 75 f
102 ff, 205
344 G | FURTHER INFORMATION | DAIMLER WORLDWIDE
Daimler Worldwide
G.02
Europe
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
NAFTA region
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Latin America (excluding Mexico)
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Africa
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Asia
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Australia/Oceania
Production locations
Sales outlets
Revenue (in millions of euros)
Employees
Mercedes-Benz
Cars
Daimler
Trucks
Mercedes-Benz
Vans
Daimler
Buses
Sales
Organization
Automotive
Businesses
16
–
40,256
132,961
2
–
19,127
10,677
1
–
770
425
1
–
1,450
3,819
2
–
30,614
3,852
–
–
1,553
314
7
–
10,743
35,055
17
–
19,020
23,709
2
–
2,329
9,709
–
–
1,023
702
4
–
6,612
13,913
–
–
515
349
3
–
10,827
17,307
1
–
2,029
1,935
1
–
507
2,011
–
–
301
36
–
–
815
1
–
–
322
56
7
–
3,321
15,697
1
–
228
452
3
–
706
1,408
1
–
101
–
2
–
336
403
–
–
40
–
–
3,706
–
–
–
1,355
–
–
–
642
–
–
–
328
–
–
–
2,534
–
–
–
244
–
–
Daimler
Mobility
–
55
12,330
8,511
–
4
13,110
1,699
–
2
308
331
–
1
282
134
–
11
2,335
1,798
–
2
281
207
Note: Unconsolidated revenue of each division (segment revenue).
Internet, Information, Financial Calendar
Financial Calendar 2020:
Annual Shareholders’ Meeting 2020
April 1, 2020
Interim Report Q1 2020
April 29, 2020
Interim Report Q2 2020
July 23, 2020
Interim Report Q3 2020
October 23, 2020
As changes to the above dates cannot
be ruled out, it is advisable to check on our
website a short time in advance.
w daimler.com/ir/calendar
Information on the Internet
Specific information on our shares and earnings development can
be found on our website w daimler.com in the “Investors” section.
The Group’s annual and interim reports and the company financial
statements of Daimler AG can be accessed there. You can also find
topical reports, presentations, an overview of various key figures,
information on our share price and other services.
w daimler.com/investors
Publications for our shareholders:
Annual Report
(German, English)
Interim Reports for the 1st, 2nd and 3rd quarters
(German, English)
The Annual Report can be requested from:
Daimler AG,
Investor Relations, HPC F343
70546 Stuttgart, Germany
Phone +49 711 17 92262
Fax
+49 711 17 92287
order.print@daimler.com
w daimler.com/ir/reports
daimler.com/downloads/en
Daimler AG
70546 Stuttgart
Phone +49 711 17 0
Fax
www.daimler.com
+49 711 17 22244
Investor Relations
Phone +49 711 17 95277
+49 711 17 92285
+49 711 17 95256
+49 711 17 94075
Fax
ir.dai@daimler.com
The paper used for this Annual Report was
produced from cellulose sourced from
certified forestry companies that operate
responsibly and comply with the regulations
of the Forest Stewardship Council.
Daimler AG
Mercedesstraße 120
70372 Stuttgart
Germany
www.daimler.com