Mercedes-Benz South Africa Annual Business Results Presentation Sustaining Growth An earlier version of this presentation stated the revenue incorrectly for 2016. The correct figure has been added.
The four strategic focus areas of Daimler Strengthening core business Growing globally Leading in technology Pushing digitalisation
Holding on to the position at the top of the podium The most inspired automotive brands in South Africa Sustained production excellence #1in Customer Service excellence A great place to work
Answering a dynamic environment with a passionate workforce and inspired leadership Labour Stability Benchmark Siyaphambili agreement signed Education & Skills Pool Mercedes-Benz Learning Academy achieves success Exchange Rate Developments, economic growth Steadily increasing local production of C-Class International and National Policy environment Continuous engagement with stakeholders/apdp
Daimler footprint in South Africa
Responsible Corporate Citizen Contributing to the South African Economy Nearest Competitor MBSA *Figures are for MBSA + MBFS
Investing in our own people Growing our own talent 2014 281 employees enrolled 2015 565 employees enrolled 2016 656 employees enrolled Training for hourly paid workers in 2016: Training for talent development in 2016: Learnerships for people living with disability in 2016: Leadership development: 251 employees 295 employees 27 employees 33 employees * *The above selection does not constitute the full training offering for the year
Mercedes-Benz Learning Academy officially opened in March Training for the broader business community in partnership with Jobs Fund
Relationship with our labour partners is imperative Successful negotiations in 2016
APDP Programme Stable policy environment delivered on by government and promised for the future Forecast I want to convey this as clearly as I can that the APDP is here to stay. Dr Rob Davies, Minister of Trade and Industry, May 2014 APDP Incentive Scheme A post-apdp support framework will be developed during the course of 2016 in order to provide a certain policy environment for automotive manufacturing in South Africa after 2020. Dr Rob Davies, Minister of Trade and Industry, November 2015
Daimler AG Financial Results
Daimler Yet another record year for unit sales, revenue and EBIT 149.5 153.3 13.8 14.2 Numbers in bn 2015 2016 2.5% 2.8% 8.7 8.8 1.4% 3.25 3.25 Revenue in bn EBIT adjusted for special items Net Profit Dividend Proposed in bn Source: Daimler AG Press Conference
Mercedes-Benz South Africa Financial Results
Healthy revenue and EBIT growth Revenue in ZAR bn 73.4 EBIT from ongoing business in ZAR bn 66.2 5.6** 4.4* +10.8% +27.3% 2015 2016* 2015 2016* 2016 figures are unaudited *Excludes impact of sale of Atlantis Foundries **Excludes impact of sale of some dealerships
Financial summary Resilience will carry us through Record export & robust sales Changing Economic Climate 73.49 EXCHANGE RATE UNSTABLE ECONOMY UNCERTAINTY INCREASING Subdued economic cycle ahead Production numbers 2015 2016 2015 2016 PRODUCT OFFENSIVE CONTINUES FURTHER INCREASE IN PRODUCTION PUTTING THE CUSTOMER FIRST
East London Plant
Mercedes-Benz East London Plant Remaining a pioneer in the industry C-Class 114 600 CKD 4320
Electrifying our passion The C350e Plug-in Hybrid Most advanced shopfloor in South Africa Certified consumption figures of just 2.1 litres of fuel per 100 kilometres. This corresponds to CO 2 emissions of 48 grams per kilometre.
Continuously investing to further improve efficiencies and build for the future Improving and preparing C 350 e Launched in Q3 2016 Total Investment in 2016: R461m Product projects: (including Hybrid) R259.3m Plant projects: (quality improvements etc) R98.6m Structure projects: R98.7m
Production steadily increasing Benchmark Efficiency East London Plant - a strong partner in the Daimler network PRODUCTION HOURS PER VEHICLE W205 28% improvement Commercial Vehicles C-Class 4.5 102 4.7 114 5.6 6.3 50 48 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Passenger Car production volume rounded to the nearest thousand. Commercial Vehicle production volume rounded to the nearest hundred.
Driving performance Built right here in Africa Announcing production of AMG models in South Africa Investment in excess of: R200m
Mercedes-Benz South Africa - Plant Reliable flexibility and programme delivery
Mercedes-Benz Cars
Mercedes-Benz Cars keeps top spot in difficult market Total Passenger Car Market 2016 359 603 313 651-12,8% Mercedes-Benz 24 608 21 922 Outsold closest competitor with 1 581 units Product offensive assisted in increasing market share to 7% -10,9% PC Market 2015 2016 PC Market MB (excl. smart, Vito & V-Class) 2015 2016 MB (excl. smart, Vito & Viano) (Source: DTI)
Ongoing Portfolio-expansion for continuous conquering 2005 8 models2229 2016 29 models* 2020 More than 40 models *Available in South Africa
Driving Performance. Extended.
The most powerful E-Class E 63 S 4MATIC+
Most intelligent executive sedan E-Class adds two to the family
Rejuvenating the brand further Refreshing the compact cars
Welcome to a world of exclusivity
Mercedes me connect Next level user experience move connect assist finance inspire
EQ An emission-free future
Mercedes-Benz Vans
Celebrating our successes
Robust sales in competitive market LARGE VAN 4 193-25% 3 125 2.8% Large Van market share Increase MID-SIZE VAN +24% 18 6 05 23 0 74 +39% MB Volume growth 1 29 4 TOTAL MARKET 1 867 929 14.9% 1 477 Series 44.5% 47.3% Series 5.0% 5.6% Unit sales 2015 2016 MBSA unit sales Unit sales 2015 2016 MBSA unit sales
Market Share 2000 1800 1600 42% 45% 47% 45.00% 1400 1200 4.40% 5.00% 5.60% 6.00% 5.00% 1400 1000 4.00% 1200 800 1000 3.00% 800 600 600 400 2.00% 400 200 0 1 732 1 867 1 477 2014 2015 2016-5.00% 200 0 913 929 1 294 2014 2015 2016 1.00% 0.00% Large Van Volume Large Van Market Share Mid-size Van Volume Mid-size Van Market Share Significant volume growth in mid-size Market share in increase in large van despite overall market drop
Concept X-
Daimler Trucks & Buses
Daimler Trucks & Buses Remains market leader Market leader in a decreasing market 26 234 23 754-9.45% Remained resilient in 2016, despite economic conditions The market leader with unit sales of 4 630 All business units contributed to success 2015 2016 Category 1 Source: DTI and MB Total Internal Commercial Vehicles Market
Freightliner Retention. Relationship. Research.
Daimler Value Chain portfolio keeps growing Possibilities for the Southern African region 69 68 74 39pp 6pp 42 52 30 10pp CharterWay FleetBoard MB Financial Services 2015 2016
Growing consistently since 2013 +17% +23% +8% +35% +5% 2013 2014 2015 2016
FUSO growth based on product offensive Second DICV* product launched FJ 16-230 *Daimler India Commercial Vehicles
Mercedes-Benz Bus & Coach Leadership in technology with Dual Fuel Products
Mercedes-Benz Financial Services
Mercedes-Benz Financial Services Total Acquisitions Total Portfolio Total Penetration 2016 R9 475m vs. 2016 R28 612m vs. 2016 36.5% vs. 2015 R10 688m 2015 R26 989m 2015 41.8%
Mercedes-Benz Financial Services Helping to sell more vehicles to more customers, more often Mercedes-Benz Cars Mercedes-Benz Vans Passenger Car Penetration 36.2% -7.8pp Vans Penetration 22.3% +1.3pp Daimler Trucks Daimler Buses Daimler Truck Penetration 46.8% +4pp Bus Penetration 16.9% +2.7pp
Dealer Satisfaction Index & Customer Satisfaction Index #1 PC Passenger Cars Overall Customer Satisfaction Index: 81 (84) Overall Dealer Satisfaction Index: 89 (91) Commercial Vehicles Overall Customer Satisfaction Index: 90 (87) Overall Dealer Satisfaction Index: 85 (80) C V Source: Nielsen
Conclusion
Leadership Culture Engineering our own blend of leaders
Strengthening leadership
From silos to swarm
Disclaimer The MBSA revenue and EBIT figures in this document are preliminary and have neither been approved yet by the Board nor audited by the independent auditor. An external auditor has conducted a review of historic financial information in in accordance with International Standard on Review es engagements to review historical financial information other than interim financial information of an audit client. A review of historic financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. It is substantially less in scope than an audit conducted in accordance with International Standards on Auditing. Based on the review, nothing has come to the attention of the auditor that causes it to believe that the Revenue and EBIT numbers provided is not prepared, in all material respects, in accordance with the JSE Debt Listing Requirements and the recognition and measurement criteria of IFRS. This document contains forwardd to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions; events of force majeure including natural disasters, epidemics, acts of terrorism, political unrest, industrial l accidents and their effects on our sales, purchasing, production or financial services activities; changes in currency exchange rates; a shift in consumer preferences towards smaller, lower-margin vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilise our production capacities etc. If any of these risks and uncertainties materialises or if the assumptions underlying any of our forward-looking statements prove to be incorrect, the actual results may be materially 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.