Daimler-Benz announces half-year operating profit of DM 827 million; Positive earnings trend expected to continue in second half of 1996; Schrempp: "a positive first phase, but we want to be in the front ranks of the world's most profitable corporations ".LONDON/STUTTGART--(BUSINESS WIRE)--Aug. 29, 1996--In the first half of 1996, Daimler-Benz generated an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of DM 827 million (1st half 1995: DM -613 million). The company expects the positive trend to continue in the second half of 1996. Operating profit was for the first time calculated in accordance with U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . "We're pleased that the tough steps we took last year are turning Daimler-Benz into a company focused on achieving world class profitability," noted Board of Management Chairman Juergen E. Schrempp at a press conference held in London today to report the Group's interim results. "We're not there yet, but we are on the right path towards a total renewal of our company's creative energies and profit performance." The Group's interim report for January to June 1996 shows a consolidated net income in accordance with U.S. GAAP of DM 782 million. This represents a positive swing of DM 2.4 billion over the first six months of last year. Comparable consolidated sales revenues rose by approximately 9% to DM 49.1 billion during the period under review. "By reducing the group from 35 to 25 highly focused business units, we are already a leaner, more productive and more profitable company. Nevertheless, overall profitability is not near where it must be," said Schrempp. "The task for the Daimler-Benz Board of Management now is to promote a continuous process of growth and long-term profitability in all business units of the group, and move into the front ranks of the world's most profitable corporations." "The next priority is to find solutions for underperforming businesses in the portfolio," Schrempp said. "Plans are well under way to address those areas to ensure future profitability," Schrempp emphasized. "The board of management will develop the group through growth in the existing business units. We will only take new activities on board if they promise healthy returns and if they fit the group strategy," said the Daimler-Benz chief in London. Statements prepared in accordance with U.S. accounting standards The Daimler-Benz interim report for the first six months of 1996 was for the first time prepared exclusively in accordance with U.S. accounting standards. "This means Daimler-Benz can provide investors and the world capital markets with statements which are transparent, comply with international standards and allow direct comparison with companies all over the world," said Dr. Manfred Gentz, Chief Financial Officer of Daimler-Benz, commenting on the interim report at the press conference in London. Daimler-Benz's external reporting now uses a figure, the operating profit, which in the future will also be one of the internal controlling yardsticks for the business units of the group. The return on capital employed Return on capital employed (ROCE) Indicator of profitability of the firm's capital investments. Determined by dividing Earnings Before Interest and Taxes by (capital employed plus short-term loans minus intangible assets). , the yardstick applied to all individual business units - a minimum return on capital employed of 12% for each business unit is required - is calculated as the quotient quotient - The number obtained by dividing one number (the "numerator") by another (the "denominator"). If both numbers are rational then the result will also be rational. of operating profit and capital employed Capital Employed 1. The total amount of capital used for the acquisition of profits. 2. The value of all the assets employed in a business. 3. Fixed assets plus working capital. 4. Total assets less current liabilities. . Mercedes-Benz: Record Unit Sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. and Sales Revenues in the Passenger Car Division Mercedes-Benz demonstrated strong results during the first half of 1996 fueled by strong passenger car sales on all major markets, increasing productivity and continued reductions in costs, reflected most recently by the launch of the E-class. The Passenger Car division achieved new unit sales and sales revenues records. In the Commercial Vehicle division, the picture was more mixed: while van business performed very well and the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. truck activities showed further gains, European truck business was affected by depressed market Depressed market Market in which supply overwhelms demand, leading to weak and lower prices. conditions and the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of the heavy-duty series. The productivity improvement programs already underway will therefore be rigorously continued. Mercedes-Benz contributed DM 1.4 billion (+3%) to the operating profit for the first half of the year. During the first six months of 1996, its sales revenues increased by 6% to DM 37.8 billion. Dasa: Operating Profit Remains Negative, Despite DM 1 Billion Improvement At Daimler-Benz Aerospace (Dasa), the streamlining of the portfolio, cost-cutting measures and the competitiveness-improvement initiative resulted in a significant reduction of the operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. . Spurred also by a more favourable foreign exchange environment, the operating profit improved by almost DM 1 billion. Nevertheless, the figure of DM -0.7 billion remains substantially negative and the cost-cutting programmes must be vigorously continued. Comparable sales revenues for the first half of 1996 increased by 9% to DM 5.3 billion. Increased Operating Profit and Continued Dynamic Growth at debis Daimler-Benz InterServices (debis) improved its results for the first half of the year in its Systemhaus, Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and Mobile Communication Services divisions, significantly increasing its operating profit from DM 156 million to DM 212 million. At the same time, the company continued its dynamic growth; the period January to June 1996 saw sales revenues grow by 21% to DM 6.5 billion. Directly Reporting Businesses The directly reporting businesses Rail Systems (joint venture ABB n. 1. Among weavers, yarn for the warp. Hence, Noun 1. ABB - an urban hit squad and guerrilla group of the Communist Party in the Philippines; formed in the 1980s Daimler-Benz Transportation, ADtranz), Recognition and Sorting Systems and Diesel Engines made a significant positive contribution to operating profit, while Microelectronics microelectronics, branch of electronic technology devoted to the design and development of extremely small electronic devices that consume very little electric power. showed a loss. Those former AEG AEG Aeger (Latin: Sick) AEG Allgemeine Elektrizitäts-Gesellschaft (Common Electricity Company) AEG Aircraft Evaluation Group AEG Association of Engineering Geologists AEG Air Expeditionary Group companies which are still represented in the statements for the first half of the year and which still rank as `directly reporting businesses' also recorded a negative operating profit, so that the overall figure for the period totalled DM -132 million. CONTACT: Daimler-Benz AG Roland Klein, 011-49-711-17-93635 Eckhard Zanger, 011-49-711-17-93311 or Daimler-Benz North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Bernhard Harling, 212/909-9717 To receive a copy of the Consolidated Interim Report and the speeches of Mr. Schrempp and Dr. Gentz, please call 212/909-9716 |
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