Statement of income

The Group’s total revenue increased by 10.1% to €129.9 billion in 2014; adjusted for exchange rate effects, it increased by 12.1%. The revenue growth primarily reflects the strong demand for the products of Mercedes-Benz Cars, especially in Asia, Europe and the United States. Further information on the development of revenue is provided in the “Business development” section of this Management Report. (See table B.17)

B.17

Consolidated statement of income
  2014 20131 14/13
In millions of euros     % change
       
Revenue 129,872 117,982  +10
Cost of sales -101,688 -92,855  +10
Gross profit 28,184 25,127  +12
Selling expenses -11,534 -11,050  +4
General administrative expenses -3,329 -3,188  +4
Research and non-capitalized development costs -4,532 -4,205  +8
Other operating income 1,759 1,530  +15
Other operating expense -1,160 -399  +191
Share of profit from equity-method investments, net 897 3,345 -73
Other financial expense, net 458 -349 .
Interest income 145 212 -32
Interest expense -715 -884 -19
Profit before income taxes 10,173 10,139  +0
Income taxes -2,883 -1,419  +103
Net profit 7,290 8,720 -16
thereof      
attributable to non-controlling interests 328 1,878 -83
thereof      
attributable to shareholders of Daimler AG 6,962 6,842  +2
1 The figures for 2013 have been adjusted due to restructuring within functional costs. Further information is provided in note 1 of the Notes to the Consolidated Financial Statements.

Cost of sales amounted to €101.7 billion in 2014, increasing by approximately 9.5% compared with the previous year. The rise in cost of sales was caused by higher business volumes and consequentially higher material expenses. Personnel expenses and depreciation of leased equipment and property, plant and equipment also increased. Overall, cost of sales increased at a lower rate than revenue, so gross profit in relation to revenue increased to 21.7% (2013: 21.3%). Further information on cost of sales is provided in note 5 of the Notes to the Consolidated Financial Statements. (See table B.17)

Due to the growth in unit sales, selling expenses increased by €0.5 billion to €11.5 billion. The main factors here were higher expenses for marketing and personnel. As a percentage of revenue, selling expenses decreased from 9.4% to 8.9%. (See table B.17)

General administrative expenses of €3.3 billion were slightly above the level of the previous year (2013: €3.2 billion), mainly driven by higher IT and personnel expenses. As a percentage of revenue, general administrative expenses decreased slightly to 2.6% (2013: 2.7%). (See table B.17)

Research and non-capitalized development costs increased by €0.3 billion to €4.5 billion in 2014. They were mainly related to the development of new models, advance expenditure for the renewal of existing models and the further development of fuel-efficient and environmentally friendly drive systems and safety technologies. As a proportion of revenue, research and non-capitalized development costs slightly decreased from 3.6% to 3.5%. Further information on the Group’s research and development costs is provided in the “Research and development” section of the “Sustainability” chapter of this Management Report. (See table B.17)

Other operating income increased to €1.8 billion (2013: €1.5 billion) and other operating expense rose significantly this year to €1.2 billion (2013: €0.4 billion), due in particular to expenses of €0.6 billion related to the ongoing antitrust investigations of European manufacturers of commercial vehicles by the EU Commission. Further information on the composition of other operating income and expense is provided in note 6 of the Notes to the Consolidated Financial Statements. (See table B.17)

In 2014, our share of profit from equity-method investments decreased to €0.9 billion (2013: €3.3 billion). Both years were affected by large gains relating to the loss of significant influence on companies which were previously accounted for using the equity method. In 2014, Daimler lost its significant influence on Tesla; the subsequent remeasurement of our Tesla shares resulted in a gain of €0.7 billion. In 2013, Daimler lost its significant influence on EADS, which resulted in a gain of €3.4 billion. (See table B.17)

Other financial expense/income improved from an expense of €0.3 billion to income of €0.5 billion. This was primarily due to the disposal of the RRPSH shares, which resulted in a gain of €1.0 billion in 2014. (See table B.17)

Net interest expense improved to €0.6 billion (2013: €0.7 billion). Expenses in connection with pension and healthcare benefits were at the prior-year level. Other interest expense improved due to lower costs of maintaining adequate liquidity following the successive expiry of refinancing at high interest rates. There was an opposing effect from lower income from cash deposits and from the remeasurement of interest-rate hedges. (See table B.17)

The tax expense of €2.9 billion entered under income-tax expense is €1.5 billion higher than in 2013. The effective tax rate for 2014 was 28.3% (2013: 14.0%). In 2014, a gain was recognized on the sale of the RRPSH shares that was largely tax free. In connection with the ongoing antitrust investigations of European manufacturers of commercial vehicles by the EU Commission, expenses arose that were not tax deductible. In 2013, the gain on the remeasurement and sale of Daimler’s EADS shares was largely tax free. Adjusted for those gains and losses, earnings subject to normal income taxes increased in 2014 compared with the previous year, which led to a correspondingly higher tax expense. Additional factors were that gains were recognized on the reversal of impairments of deferred tax assets in 2014 and that there were high tax benefits in connection with the tax assessment of previous years in 2013. (See table B.17)

Net profit for the year amounts to €7.3 billion (2013: €8.7 billion). Net profit of €0.3 billion is attributable to non-controlling interests (2013: €1.9 billion); a large portion of the prior-year amount is related to the remeasurement of the EADS shares. Net profit attributable to the shareholders of Daimler AG amounts to €7.0 billion (2013: €6.8 billion), representing earnings per share of €6.51 (2013: €6.40). (See table B.17)

The calculation of earnings per share (basic) is based on an average number of outstanding shares of 1,069.8 million (2013: 1,068.8 million).

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