Daimler’s fourth-quarter operating profit rose 10 percent as new model launches helped the carmaker to raise sales and profit margins at its Mercedes-Benz division. Operating profit, or earnings before interest and taxes from ongoing business, rose to 2.82 billion euros (USD3.2 billion) from 2.56 billion euros a year earlier.
The fourth-quarter operating margin at Mercedes-Benz Cars, which includes the Smart city-car brand, rose to 8.3 percent of revenue from 7.5 percent in the same period last year. On a full-year basis the return on sales was 8 percent, up from 6.2 percent in 2013. Daimler eventually wants to reach a 10 percent margin from carmaking. Group sales advanced 11 percent to 35.7 billion euros.
CEO Dieter Zetsche said strategic decisions taken years ago are now starting to pay off. “This progress is the result of consistent hard work. Daimler is on an upward curve,” he said in the statement.
The global rollout of a new version of the C-Class, Mercedes’ best-selling model, helped the car unit raise its operating margin. Robust sales of the brand’s expanding compact car lineup and the flagship S class sedan are also boosting sales.
Daimler said it would propose a dividend of 2.45 euros a share, the highest ever and expects significant growth in revenue, EBIT and unit sales from ongoing business this year.
Zetsche has vowed to overtake BMW and Audi by the end of the decade by bolstering the Mercedes lineup with 11 models that have no predecessor. Planned for this year are four new or revamped SUVs, as well as a $1 million, three-row Pullman version of the S-class sedan.
Mercedes deliveries increased 13 percent to 1.65 million vehicles last year, a faster pace than the volume growth at BMW and Audi. Mercedes S-class sales doubled and compact-car deliveries rose 25 percent.
