Value added

As described in the “Performance measurement system” section of the “Corporate Profile” chapter (see graphic C.03), the cost of capital is the result of net assets and cost of capital expressed as a percentage, which is subtracted from earnings in order to calculate value added. The tables C.21 and C.22 show value added and net assets for the Group and for the individual divisions. Table C.23 shows how net assets are derived from the consolidated statement of financial position.

C.03 Calculation Value Added


C.21

Value added
  2013 2012 13/12
In millions of euros     % change
       
Daimler Group 5,921 4,300 +38
       
Mercedes-Benz Cars 2,007 2,698 -26
Daimler Trucks 369 365 +1
Mercedes-Benz Vans 445 387 +15
Daimler Buses -4 -360 +99
Daimler Financial Services 409 530 -23

C.22

Net assets (average)
  2013 2012 13/12
In millions of euros     % change
       
Mercedes-Benz Cars 16,658 14,107 +18
Daimler Trucks 10,571 11,082 -5
Mercedes-Benz Vans 1,547 1,302 +19
Daimler Buses 1,068 1,157 -8
Daimler Financial Services1 6,607 5,871 +13
Net assets of the divisions 36,451 33,519 +9
Investments accounted for using the equity method2 638 1,938 -67
Assets and liabilities from income taxes3 2,479 1,256 +97
Other reconcilation3 1,080 808 +34
       
Daimler Group 40,648 37,521 +8
1 Total equity
2 To the extent not allocated to the segments
3 Industrial business

C.23

Net assets of the Daimler Group at year-end
  2013 2012 13/12
In millions of euros     % change
       
Net assets of the industrial business      
Intangible assets 9,228 8,761 +5
Property, plant and equipment 21,732 20,546 +6
Leased assets 13,207 12,163 +9
Inventories 16,648 17,075 -3
Trade receivables 7,208 6,864 +5
Less provisions for other risks -11,382 -10,975 +4
Less trade payables -8,778 -8,515 +3
Less other assets and liabilities -15,983 -14,864 +8
Assets and liabilities from income taxes 1,878 2,717 -31
Total equity of Daimler Financial Services 6,596 6,092 +8
       
Net assets 40,354 39,864 +1

The Group’s value added increased by €1.6 billion to €5.9 billion in 2013, representing a return on net assets of 22.6% (2012: 19.5%). This was once again substantially higher than the minimum required rate of return of 8%. Value added in both years was influenced in particular by the remeasurement and sale of the remaining EADS shares.

Mercedes-Benz Cars achieved value added of €2.0 billion (2012: €2.7 billion). Ongoing growth in unit sales and better pricing were offset by a less favorable model mix and exchange rate effects. There was also an impact from expenses relating to the enhancement of products’ attractiveness, capacity expansions and advance expenditure for new technologies and vehicles. The increase in average net assets by €2.6 billion to €16.7 billion also affected the development of value added. This was mainly caused by the higher level of fixed assets following increased investment in new products and production plants.

Value added at the Daimler Trucks of €0.4 billion was at the prior-year level. The slight decrease in EBIT was offset by the lower level of average net assets. The development of earnings was primarily driven by the revival of vehicle unit sales, especially in Brazil and Western Europe. There were opposing effects from higher warranty costs, exchange rate effects and expenses in connection with the optimization programs in Germany and Brazil.

The value added of the Mercedes-Benz Vans division of €0.4 billion was slightly higher than in 2012. Increased earnings were achieved due to higher unit sales, improved pricing and efficiency improvements. There was an opposing effect from average net assets, which increased by €0.2 billion to €1.5 billion due to the higher level of fixed assets.

The Daimler Buses division achieved value added of minus €4 million (2012: minus €360 million). Higher unit sales in Western Europe and Latin America, further efficiency progress in the European business system and lower expenses for optimization programs led to a significant increase in EBIT. The division’s average net assets decreased slightly by €0.1 billion and thus made a small contribution to the increase in value added.

The value added of the Daimler Financial Services division decreased by €0.1 billion to €0.4 billion. Return on equity was 19.2% (2012: 22.0%). This development was primarily the result of an increase in average equity of €0.7 billion to €6.6 billion, due to the higher contract volume, while earnings were at the level of the prior year.