Mercedes-Benz Group AG | Annual Report 2021

Annual Report 2021

Mercedes-Benz Group

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TO OUR SHAREHOLDERS

4ꢀ

COMBINED

MANAGEMENT REPORT WITH

NON-FINANCIAL

DECLARATION

ꢁ56

CORPORATE GOVERNANCE

ꢁ8ꢂ

CONSOLIDATED FINANCIAL STATEMENTS

3ꢂ7

FURTHER INFORMATION

Annual Report 2021 · Mercedes-Benz Group

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Annual Report 2021 · Mercedes-Benz Group

TO OUR

SHAREHOLDERS

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Annual Report 2021 · Mercedes-Benz Group

TO OUR SHAREHOLDERS

7

Letter from the CEO

1

2

3

0 The Board of Management

1 Report of the Supervisory Board

3 The Supervisory Board

7 Objectives and Strategy

ꢀ Mercedes-Benz Cars Strategy

ꢁ Mercedes-Benz Vans Strategy

7 Mercedes-Benz Mobility Strategy

Daimler AG was renamed as Mercedes-Benz Group AG with effect from 1 February 2022.

Unless there is a specific historical context to the former company name in individual cases, the new company name

is used in this Annual Report and the name Mercedes-Benz Group is used for the Group. The same applies to the

former Daimler Mobility AG, which was renamed as Mercedes-Benz Mobility AG on 1 February 2022.

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Ola Källenius

Chairman of the Board of Management of Mercedes-Benz Group AG

ꢂ

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Dear Shareholders,

2021 was a year in which we once again accelerated the implementation of our strategy and

translated it into fascinating products and financial success. At the same time, we were able to

further increase our financial resilience. This has been key to steering the company through

industry-wide challenges – from the ongoing pandemic to global semiconductor supply short-

ages. We also successfully achieved an historical milestone: the spin-off and hive-down of the

Daimler commercial vehicle business. As a well-focused company, we in the Mercedes-Benz

Group AG can make even better use of the opportunities that lie ahead. We are a vehicle manu-

facturer – and we are proud to be. This is now also reflected in the name of the company.

Last year, a total of 2.ꢃ million customers opted for a passenger car or a van with a star. Our

revenue amounted to €168.0 billion. EBIT increased by ꢃ40% to €29.1 billion. Our net liquidity in

the industrial business amounted to €21.0 billion. The bottom line was a net profit of €2ꢃ.4 bil-

lion. The Board of Management and the Supervisory Board will propose a dividend of €5.00 per

share to the Shareholders' Meeting.

For this performance, gratitude is due to all colleagues. The past year was characterised by a

challenging environment and high volatility. We successfully countered this – with strict

discipline and great flexibility. This tremendous commitment and a strong team spirit are also

crucial to continue the success story.

As we look ahead, we need to limit the impact of supply shortages, counter rising commodity

prices, and continue to work on our cost efficiency. In addition, we pursue clear strategic priori-

ties: we want to scale e-mobility, accelerate software development, and further strengthen

Mercedes-Benz as a leading luxury brand.

We continue to focus on the electrification of our products. This year, we are presenting two

all-electric off-road vehicles. It is important to ensure a smooth launch. At the same time, we

need to scale our electric vehicles. This year, we are going to offer an electric alternative in all

segments. We plan to increase our share of electrified vehicles to account for up to 50% for

overall sales by 2025. And by the end of this decade, we are going to be ready to switch com-

pletely to electric, where market conditions permit this. Our Maybach, AMG, and G-Class brands

are also becoming all-electric. We are significantly expanding our global activities in battery

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Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

cells and battery systems in order to make these plans successful. With the presentation of the

Vision EQXX, we reinforced our claim to be the innovative leader in electromobility. The concept

car gives a glimpse of what may be possible in the future in terms of efficiency and electric range.

Our second technological spearhead is acceleration in the area of software. In particular, this

also implies the expansion of our competence in this area. We are creating up to ꢃ,000

new jobs worldwide – a significant proportion of these at our centre of excellence for software

in Sindelfingen. There we want to push the development of our own operating system in a

bundled effort. And in automated driving, we are launching the next stage: Mercedes-Benz is

the first manufacturer in the world to receive internationally valid system approval to introduce

highly automated driving functions at level ꢃ to series production cars. That is what we will do

in Germany this year.

The technological change is the basis for the successful transformation of Mercedes-Benz into

an automotive brand in the luxury segment. The initial position is excellent: innovative technology,

emotional design, and attention to detail – this is what Mercedes-Benz has represented for

over 100 years. With the new structure, we have bundled our strength. Our ultimate goal: to

build the most desirable cars and vans in the world. This transformation did not start today and it

will not be done tomorrow – it is the responsibility of our generation. And that is where unique

opportunities lie. In this context, the Mercedes star is a promise for the future: we want to

change what exists in order to improve it. This is the spirit that our founding fathers gave us.

We will carry on their legacy. I look forward to you joining us on this journey.

Yours,

Ola Källenius

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Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

The Board of Management

Ola Källenius

Chairman of the Board of Management

Appointed until May 2024

Dr Jörg Burzer

Production & Supply Chain Management

Appointed until November 2024

Renata Jungo Brüngger

Integrity & Legal Affairs

Appointed until December 202ꢃ

Sabine Kohleisen

Human Resources and Director of Labor Relations

Appointed until November 2024

Markus Schäfer

Chief Technology Officer, Development & Procurement

Appointed until May 2024

Britta Seeger

Marketing & Sales

Appointed until December 2024

Hubertus Troska

Greater China

Appointed until December 2025

Harald Wilhelm

Finance & Controlling / Mercedes-Benz Mobility

Appointed until March 202ꢂ

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Further information on the members of the Board of Management of Mercedes-Benz Group AG

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Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Dr Ing. e.h. Dipl.-Ing. Bernd Pischetsrieder

Chairman of the Supervisory Board of Mercedes-Benz Group AG

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Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Report of the

Supervisory Board

Dear Shareholders,

In the year 2021, Daimler AG set its strategic course for the future. With the successful spin-off

and hive-down of the Daimler commercial vehicle business, two powerful and independent

companies with a clear profile were created. In the future, both Mercedes-Benz Cars & Vans

and Daimler Trucks & Buses will be able to focus even more strongly on their specific business

areas and thus generate added value for customers, employees, investors and partners. How-

ever, a common goal will continue to unite the two companies: the transformation towards a

zero-emission and software-driven future. This year, Mercedes-Benz has made substantial

progress in the implementation of its business strategy and intensified its ambition towards an

all-electric product portfolio. At the same time, the positioning of Mercedes-Benz as a sustain-

able luxury brand was expanded further.

However, 2021 also presented the Company with major challenges. The pandemic-related

disruptions in the global supply chains led to noticeable supply bottlenecks for certain semi-

conductor components, as a result of which the continued high-level of demand from

customers could, despite great efforts, not entirely be met. However, the extraordinary commit-

ment of the Board of Management, the executives, and all employees ensured a positive

business development.

For me personally, the last few months as Chairman of the Supervisory Board have shown that

the management makes the right decisions, even in difficult times. The company has already made

good progress on the road to transformation and I confidently look forward to the coming years.

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Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Supervisory and advisory activities of the

Supervisory Board

In the 2021 financial year, the Supervisory Board of

Mercedes-Benz Group AG again performed, in full, the

duties incumbent upon it by law, the Articles of Incor-

poration and the rules of procedure.

situation of the Group, the development of sales and

procurement markets, the overall economic situation

and developments on the capital markets and in the

financial services sector. Other topics included the fur-

ther development of the product portfolio, securing the

long-term competitiveness of the Group and the further

implementation of measures to ensure sustain-

In this context, the Supervisory Board continuously

advised and monitored the Board of Management in the

management of the company and provided support on

strategically important issues for the further develop-

ment of the Company.

able, future-oriented mobility. The Supervisory Board

also dealt in detail with the political developments and

conflicts in the main sales markets, the shareholder

structure, the share-price development and its back-

ground, as well as the expected effects of the strategic

projects on the share-price development.

The Supervisory Board reviewed whether the individual

company and consolidated financial statements, the

combined management report including the non-finan-

cial declaration and the other financial reporting com-

plied with the applicable requirements.

Working culture and areas of Supervisory Board

activity

In the 2021 financial year, the Supervisory Board held

nine meetings, which were also held as video confer-

ences due to the pandemic. Meeting attendance by the

members was again at a very high level, as can be seen

in the detailed overview at the end of this report. The

work of the Supervisory Board was characterised by

Furthermore, after careful review and consultation, it

approved numerous business transactions subject to its

consent. This related in particular to the approval of the

implementation of the historic restructuring of the Com- open and intensive dialogue. The members of the

pany through the spin-off and hive-down of the Daimler

commercial vehicle business as part of Project Focus.

This also included financial and investment planning,

cooperation projects and the conclusion of contracts of

particular importance to the Company. The Board of

Management informed the Supervisory Board about a

large number of other measures and business transac-

tions and discussed them intensively and in detail with

the Supervisory Board, for example, the effects on the

Company of supply bottlenecks for certain semiconduc-

tor components and the initiated countermeasures.

Supervisory Board regularly prepared for upcoming res-

olutions using documents provided in advance by the

Board of Management. The employee and shareholder

representatives also regularly prepared the meetings in

separate discussions, which were also attended by

members of the Board of Management. In addition, the

Supervisory Board was supported in depth by its Com-

mittees. At the meetings of the Supervisory Board, its

members discussed the measures and transactions to

be resolved in detail with the Board of Management.

Executive sessions were regularly scheduled for the

meetings so that topics could be discussed also in the

absence of the Board of Management.

The Board of Management regularly informed the Super-

visory Board about all significant business develop-

ments of the Group and the divisions. During the report- The Supervisory Board was informed of special events

ing period, it kept the Supervisory Board continuously

informed about all fundamental issues regarding corpo-

rate planning, including financial, investment, sales and

personnel planning, current developments at Group

companies, the development of revenue, the situation

of the Company and the divisions, the economic and

political environment, and the current status and

assessment of significant legal proceedings. In addition,

the Board of Management continuously reported to the

Supervisory Board on the profitability and liquidity

outside the regular meetings. In addition, the members

of the Supervisory Board and the Board of Management

held bilateral meetings to exchange views. The Board

of Management also informed the Supervisory Board of

the key indicators of business developments and

of existing risks with written reports.

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Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

The members of the Supervisory Board assume respon-

audit matters) and the relevant audit procedures,

including the conclusions, and were available to answer

additional questions and to provide information. Follow-

ing the final result of the Audit Committee’s review and

its own review, the Supervisory Board concurred with

the findings of the auditors. It determined that there

were no objections to be raised, it adopted the annual

accounts compiled by the Board of Management and

the combined management report, including the non-fi-

nancial declaration, and thus adopted the 2020 finan-

cial statements of Daimler AG. On this basis, the Super-

sibility for the training and further education measures

required for their tasks, such as changes in the legal

framework and forward-looking technologies, and are

supported in this by the Company. In the reporting

period, for example, the Company organised an infor-

mation event on the avoidance of compliance risks in

the area of future technologies through the further

development of the compliance management system.

In addition, new members of the Supervisory Board

have the opportunity to meet the members of the Board

of Management and executives with specialist responsi- visory Board endorsed the proposal of the Board of

bility in a specifically designated onboarding pro-

gramme for a bilateral exchange on fundamental and

current topics in respect of the relevant areas of the

Board of Management, thus gaining an overview of the

relevant topics of the Group as well as the governance

structure.

Management for the appropriation of distributable

profit. The Supervisory Board also adopted the report of

the Supervisory Board, the corporate governance decla-

ration and the remuneration report, as well as its pro-

posed resolutions on the agenda items for the 2021

Annual General Meeting. In this context, the resolutions

required to hold a virtual General Meeting were also

adopted.

Fundamental change in the corporate structure

At an extraordinary meeting on ꢃ February 2021, the

Supervisory Board gave its approval, after detailed prior

deliberations, to evaluate a separation of the truck and

bus business and to start preparations for a separate

stock-exchange listing of Daimler Truck.

In its meeting on 1ꢂ February 2021, the Supervisory

Board also discussed the results of the self-assessment

carried out in the 2020 financial year, which again con-

firmed a professional, very good cooperation within the

Supervisory Board and with the Board of Management,

characterised by a high degree of trust. In addition, the

committee dealt with the remuneration of the Board of

Management on the basis of the remuneration system

approved by the Annual General Meeting. Under the

corporate governance agenda item, the other board

positions and sideline activities of the Board of Manage-

ment members that were presented at the meeting

were approved. Another topic of the meeting was a

cooperative project. In the course of the meeting, the

Supervisory Board dealt with the ESG-relevant topic of

human rights, which is one of the key issues of the sus-

tainable corporate strategy. In addition, the Board of

Management provided information on the status of

implementation of measures and commitments regard-

ing the settlement of regulatory and civil proceedings in

the United States in connection with diesel exhaust

emissions. Finally, the Supervisory Board received

reports on the external certification of selected areas of

the compliance management system.

At the Meeting of the Supervisory Board on 1ꢂ February

2021, the Supervisory Board dealt with the company

financial statements, the consolidated financial state-

ments and the combined management report, including

the non-financial declaration for Daimler AG and the

Group for the 2020 financial year, each of which had

been issued with an unqualified audit opinion by the

external auditor, as well as the reports of the Audit

Committee and the Supervisory Board, the corporate

governance declaration, the remuneration report and

the proposal for the appropriation of profit. Extensive

documentation was available to the members of the

Supervisory Board for their preparation.

The Audit Committee and the Supervisory Board dealt

with these documents in detail and discussed them

intensively in the presence of the auditors. The auditors

reported on the results of their audits and also

addressed the particularly important audit issues (key

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Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

At the virtual Annual General Meeting on ꢃ1 March 2021,

law firms. The Supervisory Board and the Board of Man-

agement are of the opinion that the settlements were in

the interest of the Group. In addition, the Supervisory

Board received reports on other current legal topics and

was informed by the Board of Management about the

status of Project Focus.

the candidates proposed by the Supervisory Board, Ben

van Beurden, Liz Centoni, and Dr Martin Brudermüller,

were elected to the Supervisory Board as shareholder

representatives. In the Supervisory Board meeting

that followed, Dr Bernd Pischetsrieder was elected

Chairman of the Supervisory Board as successor to the

long-standing Chairman Dr Manfred Bischoff, who

stepped down from the Supervisory Board. In recogni-

tion of his great services to the company, the Supervi-

sory Board appointed Dr Manfred Bischoff as Honorary

Chairman of the Supervisory Board. In addition, elec-

tions were held to replace shareholder representatives

who had stepped down from the committees of the

Supervisory Board.

At the end of July, the Supervisory Board convened for

another meeting focusing on setting the strategic

course for an all-electric future by the end of the dec-

ade. The directional shift from “electric first” to “electric

only” and the associated effects on portfolio, produc-

tion, battery technology and finances were discussed in

detail using specific projects and the MB.EA, AMG.EA,

and VAN.EA architectures. In addition to other product

and M&A projects subject to its approval, the Supervi-

sory Board confirmed the investment in the European

battery-cell manufacturer Automotive Cells Company

(ACC) and discussed the course of business and the

results of the first half-year in detail with the Board of

Management. Furthermore, the Supervisory Board

resolved to appoint Sabine Kohleisen as successor to

Wilfried Porth as member of the Board of Management

responsible for Human Resources and Director of

Labour Relations for a three-year term with effect from

1 December 2021. Finally, the Supervisory Board

received reports on current legal issues as well as on the

implementation status of measures and obligations aris-

ing from the settlement reached with the US authorities

in 2020 in connection with diesel exhaust emissions.

At its meeting on 2ꢃ April 2021, the Supervisory Board

resolved to appoint Harald Wilhelm as a member of the

Board of Management with responsibility for Finance &

Controlling / Daimler Mobility, with effect from 1 April

2022 for a further five-year term, and Martin Daum as a

member of the Board of Management of Daimler AG

with responsibility for Daimler Trucks & Buses, with

effect from 1 March 2022 for a further three-year term.

The committee had in mind that Martin Daum would

step down from the Board of Management when Project

Focus had been implemented and would be CEO of the

Daimler Truck company, which would then be listed on

the stock exchange. The plans presented by the Board

of Management to accelerate the electrification of the

product portfolio were supported by the Supervisory

Board. Accordingly, it gave its approval for the release of In an Extraordinary Meeting on ꢃ0 July 2021, the Super-

funds for several future-oriented product projects. The

meeting also dealt with proceedings in connection with

diesel exhaust emissions and anti-trust matters. After

careful and intensive deliberations on the relevant

aspects and consideration of the relevant reasons, tak-

ing into account the Group’s best interests and corre-

sponding positive resolution recommendations of the

Legal Affairs Committee of the Supervisory Board, the

Supervisory Board approved the resolutions of the

Board of Management regarding the settlement of a

customer class action in Canada in connection with die-

sel exhaust emissions, as well as the antitrust proceed-

ings of the European Commission regarding restraints of

competition for diesel car exhaust gas purification tech-

nologies. In preparation for its resolutions, the Supervi-

sory Board obtained expert opinions from independent

visory Board, after careful and in-depth deliberations,

gave its approval to the implementation of the historic

restructuring of the Group through the spin-off and

hive-down of the Daimler commercial vehicle business.

The proposed resolutions required in this context for the

agenda items of the Extraordinary General Meeting,

which took place virtually on 1 October 2021, were also

adopted. The shareholders confirmed Project Focus

with a clear majority of 99.90% and elected the candi-

dates proposed by the Supervisory Board, Olaf Koch

and Prof Dr Helene Svahn, to the Supervisory Board. In

the subsequent extraordinary meeting of the Supervi-

sory Board, Olaf Koch was elected to the Audit Commit-

tee and the Legal Affairs Committee to replace Joe

Kaeser and Marie Wieck, who stepped down at the end

of the Extraordinary General Meeting.

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Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Strategy meeting of the Supervisory Board

the resolution of the Board of Management to hold the

2022 Annual General Meeting virtually. Finally, on the

basis of the preparation by the Presidential Committee,

it dealt with possibilities for increased consideration of

sustainability criteria within the remuneration system for

the Board of Management approved by the Annual Gen-

eral Meeting. The applicable remuneration system for

the members of the Board of Management and the

remuneration report can be found on the internet at

The focus of the meeting on 2ꢂ October 2021 was, in

addition to the general business strategy, in particular

the discussion of the strategy with regard to China, a

very important sales market for the Mercedes-Benz

Group. With the involvement of the responsible execu-

tives, the members of the Supervisory Board and the

Board of Management discussed in a constructive and

open dialogue how the Mercedes-Benz Group will adapt

to new challenges and which opportunities are to be

exploited. The geopolitical situation between China and

the United States, possible political developments and

effects on the Group were also discussed. Furthermore,

the ꢃ60° strategy concerning the electric powertrain

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group.mercedes-benz.com/remuneration-bom.

Corporate governance and declaration of

compliance

During the 2021 financial year, the Supervisory Board

continuously addressed the standards of good corpo-

rate governance.

(eATS) was explained to the Supervisory Board in detail

and with demonstrations. Another item on the agenda

concerned the approval of funding requirements for the

Mercedes-Benz Operating System (MB.OS). The Supervi- Because the effects of Project Focus were not reflected

sory Board also resolved to appoint Dr Jörg Burzer as a

member of the Board of Management for a three-year

term with effect from 1 December 2021, with responsi-

bility for “Production & Supply Chain Management”. In

in the targets and comparison parameters for the varia-

ble remuneration of the Board of Management, and the

Supervisory Board therefore resolved to adjust these

targets and comparison parameters for variable remu-

addition, the Supervisory Board was informed of current neration components not yet due at the time the spin-

legal topics.

off became effective, the Supervisory Board adopted an

intra-year update of the declaration of compliance in

July 2021 in accordance with Section 161 of the German

Stock Corporation Act (AktG), with corresponding devia-

tions from the German Corporate Governance Code. In

December 2021, the Supervisory Board adopted the

regular 2021 declaration of compliance. With the excep-

tions explained there, all recommendations of the Code

have been and are being complied with.

Corporate planning meeting (Mercedes-Benz

business planning)

At the meeting on 2 December 2021, the Supervisory

Board discussed and approved the Mercedes-Benz

business planning on the basis of comprehensive docu-

mentation and discussed existing opportunities and

risks in connection therewith. The Supervisory Board

also gave its approval to a number of product projects

and other measures subject to its approval. It consid-

ered the report of the Board of Management on the

development of ongoing and completed acquisitions

and cooperations and received reports on current legal

issues as well as on the implementation status of meas-

ures and obligations arising from the settlement

reached with the US authorities in 2020 in connection

with diesel exhaust emissions. Other items on the

agenda included corporate governance matters. In view

of the volatile environment and the worsening covid-19

situation in Germany, the Supervisory Board approved

In the interests of good corporate governance, the

members of the Supervisory Board of Mercedes-Benz

Group AG are required to disclose to the Supervisory

Board as a whole any conflicts of interest, in particular

those that could arise as a result of an advisory or board

function with customers, suppliers, lenders of

Mercedes-Benz Group AG or other third parties.

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Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

There were no indications of actual conflicts of interest

and Elke Tönjes-Werner equally make up ꢃ0% women

and the remainder ꢂ0% men. Thus, the Supervisory

Board as a whole also fulfils the statutory quota.

in the 2021 financial year. As a highly precautionary

measure, at the extraordinary meeting of the Supervi-

sory Board on ꢃ0 July 2021, individual members of the

Supervisory Board nevertheless did not participate in

At its meeting on 2ꢃ February 2022, the Supervisory

the vote on the implementation of the spin-off and hive- Board dealt with the specific election proposals to the

down of the Daimler commercial vehicle business, nor

in the vote on the resolutions proposed to the Extraor-

dinary Shareholders’ Meeting required in this context.

This concerned the members of the Supervisory Board

Joe Kaeser, Marie Wieck, Michael Brecht, and Roman

Zitzelsberger with regard to their future membership of

the Supervisory Board of Daimler Truck Holding AG.

2022 Annual General Meeting and, on the recommenda-

tion of the Nomination Committee, decided to propose

to the 2022 Annual General Meeting that Dame Veronica

Anne (“Polly”) Courtice and Marco Gobbetti be elected

to the Supervisory Board for the first time. In the event

of the election of the proposed candidates, the statu-

tory quota for women remains fulfilled both on the

shareholder side and for the Supervisory Board as a

whole.

In its meeting on 1ꢂ February 2021, the Supervisory

Board discussed the result of the externally moderated

self-assessment conducted in the 2020 financial year.

The results confirm a professional, very good coopera-

tion within the Supervisory Board and with the Board of

Management, characterised by a high degree of trust.

Independently of the self-assessment of the Supervi-

sory Board, the Audit Committee again conducted a

self-evaluation of its activities in 2021 based on a com-

prehensive company-specific questionnaire. The very

positive results of this self-assessment were presented

and discussed at the Audit Committee meeting on 1ꢂ

February 2022.

For the composition of the Board of Management, the

Supervisory Board set a target for the proportion of

women of at least 25% in December 2020 and a dead-

line of ꢃ1 December 2025. In August 2021, the German

Second Leadership Positions Act (FüPoG II) came into

force. According to that legislation, at least one woman

and at least one man must be a member of the Board of

Management in listed companies with parity participa-

tion and more than three members. This minimum par-

ticipation requirement must be complied with as of 1

August 2022 when appointing individual or multiple

members of the Board of Management. As of ꢃ1 Decem-

German Act on the Equal Participation of Women and ber 2021, Renata Jungo Brüngger, Sabine Kohleisen and

Men in Leadership Positions

For supervisory boards of listed companies with equal

Britta Seeger are three women on the Board of Manage-

ment of the Company, which consists of a total of eight

representation, such as that of Mercedes-Benz Group AG, members, resulting in a female proportion of ꢃꢂ.5%.

the German Stock Corporation Act (AktG) prescribes a

mandatory quota of at least ꢃ0% women. The quota is

to be met by the Supervisory Board as a whole. If the

representatives of the shareholders or the representa-

tives of the employees object to the overall fulfillment

vis-à-vis the Chairman of the Supervisory Board before

an election, the minimum proportion for this election is

to be fulfilled separately by the shareholder side and

the employee side.

Corporate governance at the Mercedes-Benz Group is

explained in detail in the corporate governance declara-

tion.

Work in the committees

The Presidential Committee held four meetings in the

past financial year. In particular, it discussed personnel

matters and succession planning for appointments to

the Board of Management. Furthermore, the Presidential

Committee discussed the acceptance of board posi-

tions by members of the Board of Management at other

companies and institutions, corporate governance

issues, D&O insurance and remuneration issues.

As of ꢃ1 December 2021, on the shareholder side, Sari

Baldauf, Liz Centoni and Professor Dr Helene Svahn

make up ꢃ0% women and the remainder ꢂ0% men on

the Supervisory Board of Mercedes-Benz Group AG. On

the employee side, Nadine Boguslawski, Monika Tielsch

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Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

The Audit Committee held five meetings in the year

021. Details can be found in the Audit Committee’s

Changes in the Supervisory Board and the Board of

Management

2

report.

At the virtual Shareholders’ Meeting on ꢃ1 March 2021,

the candidates proposed by the Supervisory Board,

Ben van Beurden, Dr Martin Brudermüller, and

Liz Centoni, were elected to the Supervisory Board to

succeed Dr Manfred Bischoff, Dr Jürgen Hambrecht,

and Petraea Heynike, who then retired from the Super-

visory Board. In the Supervisory Board meeting that fol-

lowed, Dr Bernd Pischetsrieder was elected Chairman

of the Supervisory Board as successor to Dr Manfred

Bischoff, who resigned from the Supervisory Board.

The Legal Affairs Committee held four meetings in the

year 2021. In those meetings, it was informed in detail

about legal matters relating to emissions and cartels as

well as the corresponding further development of com-

pliance systems and discussed these matters in the

presence of the legal advisers of the Supervisory Board.

The Committee received reports on the progress of the

review of potential responsibilities in connection with

diesel exhaust emissions and anti-trust matters from

the legal advisers engaged for this purpose by the

Supervisory Board. The Committee regularly reported to

the Supervisory Board on its work and, after discussing

and weighing the relevant aspects, made recommenda-

tions for resolutions to the Supervisory Board, taking

the Group’s best interests into account. This particularly

concerned the resolutions of the Supervisory Board of

On the employee side, Sibylle Wankel resigned from the

Supervisory Board on ꢃ1 July 2021. As her successor,

Nadine Boguslawski was appointed as a member of the

Supervisory Board by ruling of the Stuttgart District

Court with effect from 1 August 2021. On 6 September

2021, Roman Romanowski was court-appointed to the

Supervisory Board as an employee representative, fol-

lowing Raymond Curry’s resignation from the Supervi-

sory Board on ꢃ1 August 2021.

2ꢃ April 2021 to approve the resolutions of the Board of

Management regarding the settlement of a customer

class action in Canada in connection with diesel exhaust

emissions, as well as the antitrust proceedings of the

European Commission regarding restraints of competi-

tion for car exhaust gas cleaning technologies. As part

of the settlement reached in 2020 with various US

authorities to end regulatory proceedings for alleged

violations of US and Californian environmental laws in

connection with diesel exhaust emissions, the Commit-

tee was assigned further tasks and decision-making

powers with regard to the execution of the obligations

undertaken in the settlement. The Committee also ful-

filled these tasks in full and with great care.

Olaf Koch and Prof Dr Helene Svahn, who were pro-

posed by the Supervisory Board, were elected to the

Supervisory Board as successors to Joe Kaeser and

Marie Wieck, who resigned at the end of the virtual

Extraordinary Shareholders’ Meeting on 1 October 2021.

In connection with the spin-off and hive-down of the

Daimler commercial vehicle business, Dr Sabine Zimmer

resigned from the Supervisory Board on 8 December

2021. As her successor, Monika Tielsch was appointed

as a member of the Supervisory Board as an employee

representative by ruling of the Stuttgart District Court

with effect from 9 December 2021.

The Nomination Committee held two meetings in the

2021 financial year. The Committee specifically consid-

ered the recommendations for the election proposals of

the Supervisory Board to the 2021 Extraordinary General

Meeting. In this context, it was guided by the interests

of the Company, taking all circumstances of the individ-

ual case into account, and striving to fulfil the overall

profile of requirements, including the competence pro-

file and the diversity concept for the entire Supervisory

Board.

During the reporting period, there was no reason to

convene the Mediation Committee.

18

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

At the meeting of the Supervisory Board on 2ꢃ April

Audit of the individual company and consolidated

2021, Harald Wilhelm was appointed as a member of the financial statements

Board of Management with responsibility for “Finance &

Controlling / Daimler Mobility” with effect from 1 April

The financial statements of Mercedes-Benz Group AG

and the combined management report for Mercedes-

Benz Group AG and the Group for 2021 were duly

audited by KPMG AG Wirtschaftsprüfungsgesellschaft,

Berlin, and issued with an unqualified audit opinion.

This also applies to the 2021 consolidated financial

statements compiled in accordance with IFRS.

2022 for a further five-year term and Martin Daum as a

member of the Board of Management of Daimler AG

with responsibility for “Daimler Trucks & Buses” with

effect from 1 March 2022 for a further three-year term.

The Supervisory Board had in mind that Martin Daum

would step down from the Board of Management when

the spin-off and hive-down of the Daimler commercial

In a meeting of the Supervisory Board on 2ꢃ February

vehicle business had been implemented and would lead 2022, the preliminary key figures of the 2021 company

the Daimler Truck company, which would then be listed

on the stock exchange.

and consolidated financial statements as well as the

proposal to the 2022 Annual General Meeting for the

appropriation of profits were discussed and noted with

approval in the presence of representatives of the audi-

Effective from the spin-off and hive-down, Martin Daum

resigned from the Board of Management on 9 December tor. The Supervisory Board determined that there were

2

021.

no objections to their publication. The preliminary key

figures for the 2021 financial year and the proposal for

the appropriation of profits were published at the

annual press conference on 24 February 2022.

At the end of July 2021, the Supervisory Board resolved

to appoint Sabine Kohleisen as successor to Wilfried

Porth as member of the Board of Management responsi-

ble for Human Resources and Director of Labour Rela-

tions for a three-year term with effect from 1 December

At the meeting on 10 March 2022, the Supervisory

Board discussed the financial statements of the Com-

pany, the consolidated financial statements and the

combined management report, including the non-finan-

cial declaration for Mercedes-Benz Group AG and the

Group, as well as the corporate governance declaration,

the remuneration report, and the proposal for the

appropriation of profits, each of which had been issued

with an unqualified audit opinion by the auditor. The

members of the Supervisory Board were provided with

extensive documentation for their preparation, including

the annual report with the consolidated financial state-

ments compiled in accordance with IFRS, the combined

management report including the non-financial declara-

tion for Mercedes-Benz Group AG and the Group, as

well as the corporate governance declaration, the remu-

neration report, the company financial statements of

Mercedes-Benz Group AG, the proposal of the Board of

Management for the appropriation of profits, the audit

opinions of KPMG AG Wirtschaftsprüfungsgesellschaft

for the company financial statements of Mercedes-Benz

Group AG and the consolidated financial statements, in

each case including the combined management report,

and information on the internal control system, as well

as drafts of the reports of the Supervisory Board and

the Audit Committee.

2021. Wilfried Porth had previously told the Supervisory

Board that he would resign from the Board of Manage-

ment at his own request at the time of the restructuring

of the Company through the spin-off and hive-down of

the Daimler commercial vehicle business. Wilfried Porth

resigned from the Board of Management on 1 December

2

021.

At the meeting of the Supervisory Board on 2ꢂ October

021, Dr Jörg Burzer was appointed as a member of the

2

Board of Management for a three-year term with effect

from 1 December 2021, with responsibility for “Produc-

tion & Supply Chain Management”.

At the meeting of the Supervisory Board on 2ꢃ February

2

022, the shareholder representatives resolved, on the

basis of a corresponding recommendation by the Nomi-

nation Committee, to propose to the 2022 Annual Gen-

eral Meeting that Dame Veronica Anne (“Polly”) Courtice

and Marco Gobbetti be elected to the Supervisory

Board.

19

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

The Audit Committee and the Supervisory Board

Appreciation

reviewed these documents in detail and discussed them The Supervisory Board would like to thank all employees

intensively in the presence of the auditors, who

reported on the results of their audit and, in particular,

addressed the key audit matters and the relevant audit

procedures, including the conclusions drawn, and were

available for additional questions and information. Fol-

lowing the final result of the review by the Audit Com-

mittee and its own review, the Supervisory Board con-

curred with the result of the audit by the auditor. It

determined that there were no objections to be raised

and adopted the financial statements prepared by the

Board of Management and the combined management

report, including the non-financial declaration. The 2021

company financial statements of Mercedes-Benz

Group AG were thus adopted. On this basis, the Super-

visory Board endorsed the proposal of the Board of

Management for the appropriation of distributable

profit. The Supervisory Board also adopted the report of

the Supervisory Board, the corporate governance decla-

ration and the remuneration report, as well as its pro-

posed resolutions on the agenda items for the 2022

Annual General Meeting.

of the Mercedes-Benz Group and the Daimler Truck

Group as well as the management of the companies for

their active contribution to the successful implementa-

tion of the spin-off and hive-down of the Daimler com-

mercial vehicle business in the past financial year.

The Supervisory Board would like to thank Wilfried

Porth and Martin Daum for their many years of success-

ful service to our company.

The Supervisory Board would also like to thank Raymond

Curry, Dr Jürgen Hambrecht, Petraea Heynike, Joe Kaeser,

Sibylle Wankel, Marie Wieck, and Dr Sabine Zimmer,

who closely supported the Company through their

dedicated work on the Supervisory Board and left the

Supervisory Board last year.

Special thanks go to the former chairman of the Super-

visory Board, Dr Manfred Bischoff, who rendered out-

standing services to the company.

Stuttgart, March 2022

The Supervisory Board

Dr Bernd Pischetsrieder

Chairman

20

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

A.ꢀꢁ

Individualised disclosure of attendance at meetings by members of the Supervisory Board of Mercedes-Benz Group AG in the ꢂꢀꢂꢁ financial year

2021

Meetings attended

Attendance (%)

Plenary Supervisory Board

Dr Bernd Pischetsrieder (Chairman)

Dr Manfred Bischoff (former Chairman, until ꢃ1 March 2021)

Bader M. Al Saad

ꢄ/ꢄ

ꢆ/ꢆ

ꢄ/ꢄ

ꢇ/7

3/3

ꢄ/ꢄ

ꢇ/7

7/7

ꢇ/ꢇ

ꢄ/ꢄ

ꢆ/ꢆ

ꢄ/ꢄ

ꢉ/ꢇ

3/3

ꢄ/ꢄ

3/3

ꢀ/ꢀ

ꢄ/ꢄ

ꢉ/ꢇ

ꢄ/ꢄ

ꢇ/ꢇ

ꢄ/ꢄ

ꢅꢀꢀ

ꢈꢇ

Sari Baldauf

Michael Bettag

Ben van Beurden (since ꢃ1 March 2021)

Nadine Boguslawski (since 1 August 2021)

Dr Clemens Börsig

ꢅꢀꢀ

ꢈꢇ

Michael Brecht

Dr Martin Brudermüller (since ꢃ1 March 2021)

Liz Centoni (since ꢃ1 March 2021)

Raymond Curry (until ꢃ1 August 2021)

Michael Häberle

ꢅꢀꢀ

ꢈ3

Dr Jürgen Hambrecht (until ꢃ1 March 2021)

Petraea Heynike (until ꢃ1 March 2021)

Timotheus Höttges

Joe Kaeser (until 1 October 2021)

Olaf Koch (since 1 October 2021)

Ergun Lümali

ꢅꢀꢀ

N/A

ꢅꢀꢀ

ꢈ3

Roman Romanowski (since 6 September 2021)

Prof Dr Helene Svahn (since 1 October 2021)

Monika Tielsch (since 9 December 2021)

Elke Tönjes-Werner

Sibylle Wankel (until ꢃ1 July 2021)

Dr Frank Weber

ꢅꢀꢀ

Marie Wieck (until 1 October 2021)

Dr Sabine Zimmer (until 8 December 2021)

Roman Zitzelsberger

Presidential Committee

Dr Bernd Pischetsrieder (Chairman)

Dr Manfred Bischoff (former Chairman, until ꢃ1 March 2021)

Ben van Beurden (since ꢃ1 March 2021)

Michael Brecht

3/3

ꢅ/ꢅ

3/3

ꢁ/ꢁ

ꢅ/ꢅ

ꢁ/ꢁ

ꢅꢀꢀ

Dr Jürgen Hambrecht (until ꢃ1 March 2021)

Roman Zitzelsberger

21

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Audit Committee

Dr Clemens Börsig (Chairman)

Michael Brecht

ꢉ/ꢉ

ꢁ/ꢁ

ꢅ/ꢅ

ꢉ/ꢉ

ꢅꢀꢀ

Joe Kaeser (until 1 October 2021)

Olaf Koch (since 1 October 2021)

Ergun Lümali

Nomination Committee

Dr Bernd Pischetsrieder (Chairman)

ꢆ/ꢆ

ꢀ/ꢀ

ꢆ/ꢆ

ꢅꢀꢀ

N/A

ꢅꢀꢀ

Dr Manfred Bischoff (former Chairman, until ꢃ1 March 2021)

Sari Baldauf

Ben van Beurden (since ꢃ1 March 2021)

Legal Affairs Committee

Dr Clemens Börsig (Chairman)

Sari Baldauf (from ꢃ1 March 2021 until 1 December 2021)

Dr Manfred Bischoff (until ꢃ1 March 2021)

Michael Brecht

ꢁ/ꢁ

3/3

ꢅ/ꢅ

ꢁ/ꢁ

ꢀ/ꢀ

ꢁ/ꢁ

ꢅ/ꢅ

3/3

ꢅꢀꢀ

N/A

ꢅꢀꢀ

Liz Centoni (since 2 December 2021)

Michael Häberle

Olaf Koch (since 1 October 2021)

Ergun Lümali (since 1 August 2021)

Sibylle Wankel (until ꢃ1 July 2021)

Marie Wieck (until 1 October 2021)

22

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

The Supervisory Board

Dr Bernd Pischetsrieder

Chairman of the Supervisory Board of Mercedes-Benz Group AG

Elected until 2024

Michael Brecht*

Deputy Chairman of the Supervisory Board of Mercedes-Benz Group AG

Chairman of the General Works Council of the Mercedes-Benz Group;

Chairman of the Works Council of the Mercedes-Benz plant in Gaggenau

Elected until 202ꢃ

Bader M. Al Saad

Chairman of the Board of Directors and Director General of the Arab Fund

for Economic & Social Development

Elected until 2022

Sari Baldauf

Chair of the Board of Directors of Nokia Oyj

Elected until 202ꢃ

Michael Bettag*

Chairman of the Works Council of the Mercedes-Benz AG Nuremberg Own Retail Branch

Elected until 202ꢃ

Ben van Beurden

Chief Executive Officer of Shell plc

Elected until 2025

(since ꢃ1 March 2021)

*

Employee representatives

w

Further information on the members of the Supervisory Board of Mercedes-Benz Group AG

2ꢃ

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Dr Clemens Börsig

Former Chairman of the Supervisory Board of Deutsche Bank AG

Elected until 2022

Nadine Boguslawski*

First Authorised Representative of IG Metall (German Metalworkers’ Union) Stuttgart

Appointed until 202ꢃ

(since 1 August 2021)

Dr Martin Brudermüller

Chairman of the Board of Executive Directors of BASF SE

Elected until 2025

(since ꢃ1 March 2021)

Liz Centoni

Chief Strategy Officer and GM, Applications Cisco, Inc.

Elected until 2025

(since ꢃ1 March 2021)

Michael Häberle*

Deputy Chairman of the General Works Council of Mercedes-Benz Group AG;

Chairman of the Works Council at the Mercedes-Benz Untertürkheim Site

Elected until 202ꢃ

Timotheus Höttges

Chairman of the Board of Management of Deutsche Telekom AG

Elected until 2025

Olaf Koch

Partner and Managing Director of Zintinus GmbH

Elected until 2025

(since 1 October 2021)

*

Employee representatives

w

Further information on the members of the Supervisory Board of Mercedes-Benz Group AG

24

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Ergun Lümali*

Deputy Chairman of the Group Works Council of the Mercedes-Benz Group;

Chairman of the General Works Council of Mercedes-Benz Group AG;

Chairman of the Works Council of the Mercedes-Benz Sindelfingen Plant

Elected until 202ꢃ

Roman Romanowski*

Head of the Executive Legal Department at the Board of Management of IG Metall

(German Metalworkers’ Union)

Appointed until 202ꢃ

(since 6 September 2021)

Prof Dr Helene Svahn

Professor of Nanobiotechnology at the Royal Institute of Technology, Sweden

Elected until 2025

(since 1 October 2021)

Monika Tielsch*

Member of the Works Council of the Mercedes-Benz Sindelfingen Plant (RD)

Appointed until 202ꢃ

(since 9 December 2021)

Elke Tönjes-Werner*

Deputy Chairwoman of the Works Council of the Mercedes-Benz Bremen Plant

Elected until 202ꢃ

Dr Frank Weber*

Centre Manager BodyTEC, Mercedes-Benz AG;

Chairman of the Management Representative Committee,

Mercedes-Benz Group

Elected until 202ꢃ

Roman Zitzelsberger*

District Manager of IG Metall (German Metalworkers’ Union) in Baden-Württemberg

Elected until 202ꢃ

*

Employee representatives

w

Further information on the members of the Supervisory Board of Mercedes-Benz Group AG

25

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Retired from the Supervisory Board

Dr Manfred Bischoff

Former Chairman of the Supervisory Board of Daimler AG

Retired on ꢃ1 March 2021

Raymond Curry*

President of the United Auto Workers (UAW) and Member of the International Executive Board

Retired on ꢃ1 August 2021

Dr Jürgen Hambrecht

Former Chairman of the Supervisory Board of BASF SE

Retired on ꢃ1 March 2021

Petraea Heynike

Former Executive Vice President of the Executive Board of Nestlé S.A.

Retired on ꢃ1 March 2021

Joe Kaeser

Chairman of the Supervisory Board of Siemens Energy AG

Retired on 1 October 2021

Sibylle Wankel*

First Authorised Representative IG Metall (German Metalworkers’ Union) in Munich

Retired on ꢃ1 July 2021

Marie Wieck

Former General Manager of IBM Blockchain

Retired on 1 October 2021

Dr Sabine Zimmer*

Head of Training Policy Germany at the Daimler Group

Retired on 8 December 2021

*

Employee representatives

26

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Objectives and Strategy

The automotive industry is currently in the middle of its biggest ever trans-

formation. Moreover, the world as a whole is changing at an increasingly

dynamic rate. Sustainability and, in particular, environmental and climate

protection are among the most urgent issues of our time. Digitalisation and

shifts in global trade are changing our business and our company. We firmly

believe that individual mobility will remain a basic human need, and it will

have to be provided in an energy-saving, low-emission and environmentally

compatible manner. As a company, we also bear social responsibility. Not

only do we face up to the challenges of the future; as the inventor of the

automobile, we also want to set benchmarks for tomorrow’s sustainable

mobility.

New corporate structure

diversified in line with their customers, technologies,

risks and markets, and the necessary processes can be

adapted to the competitive environment and changing

market conditions in an even more agile and targeted

manner. Moreover, the separation provides the Daimler

Truck Group with direct access to the capital market and

thus to additional sources of funding. The spin-off and

hive-down of the Daimler commercial vehicle business

New competitors have entered the automotive market

with alternative drive technologies, and some of them

are highly valued by the capital market. Consumers and

governments are increasingly focusing on sustainability

and the reduction of CO emissions. The associated

2

switch to new technologies has triggered strong

demand for capital and requires lean organisational

structures and short decision-making paths. In addition, was approved by an overwhelming majority of 99.90% of

the covid-19 pandemic has accelerated the steadily

growing process of digitalisation. Most recently, it

became apparent that there were fewer industrial over-

laps between the car and commercial vehicle busi-

nesses than previously expected. Corporate functions

generated only limited synergies.

the shareholders at the Extraordinary General Meeting

on 1 October 2021.

The commercial vehicle business that is concentrated at

Daimler Truck AG was separated from the Daimler Group

and transferred under the umbrella of Daimler Truck

Holding AG to an independent group with its own finan-

cial services company. Trading in the shares of Daimler

Truck Holding AG began on the Frankfurt Stock

Exchange on 10 December 2021. The shareholders of

Daimler AG received, in proportion to their previously

existing shareholdings, one registered no-par-value

In view of this situation, the Board of Management and

the Supervisory Board of Daimler AG decided in 2021 to

spin off and hive down the commercial vehicle business

in the context of Project Focus. The implementation of

these measures resulted in a historic realignment of the

Company. The separation aims to improve conditions for share of Daimler Truck Holding AG for each two regis-

the implementation of the respective strategies of the

remaining Mercedes-Benz Group and the new Daimler

Truck Group. Each company will develop and pursue its

own independent strategy. Independently, the business

activities of the two groups can be even more strongly

tered no-par-value shares of Daimler AG. Mercedes-

Benz Group AG initially held ꢃ5% of the share capital of

Daimler Truck Holding AG. In January 2022, shares

2ꢂ

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

amounting to approximately 5% of the equity capital of

Daimler Truck Holding AG were transferred to the pen-

sion plan assets of Mercedes-Benz AG.

services business of Daimler Truck Group were trans-

ferred to Daimler Truck AG. Additional parts will be

transferred in 2022. Transitional service agreements will

temporarily enable the remaining companies of the

Mercedes-Benz Group to provide services to the

Daimler Truck Group and vice versa for a transitional

period. You can find in-depth information on Project

In preparation for the spin-off and hive-down, we cre-

ated or expanded the necessary headquarters functions

for the Daimler Truck Group and severed many of the

service relationships between the Mercedes-Benz Cars

Focus on our website group.mercedes-benz.com/

w

&

Vans and the Daimler Trucks & Buses divisions. The

company/business-units/project-focus.html.

financial services business conducted by Mercedes-

Benz Mobility AG was split between two independent

financial services companies and most of the financial

Project Focus: The new MercedesꢃBenz Group

Structure before implementation

Daimler AG

Mercedes-Benz AG

Daimler Truck AG

Daimler Mobility AG

Structure after implementation

Mercedes-Benz Group AG

Daimler Truck Holding AG

Mercedes-Benz AG

Mercedes-Benz

Mobility AG

Daimler Truck AG

Daimler Truck

Financial Services

GmbH

28

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Sustainability, integrity and diversity are the basis of We are firmly convinced that we can only be successful

our conduct

over the long term if we fulfil not only our economic and

environmental responsibilities but also our responsibil-

ity to society. Especially in times of change and

As a company, we assume responsibility for the eco-

nomic, ecological and social effects of our business

activity. As a founding member of the UN Global Com-

pact, we are committed to the Compact’s ten universal

principles, the United Nations’ Sustainable Develop-

ment Goals and the Paris Agreement on climate change.

upheaval, we need to have values that provide us with

orientation. For the Mercedes-Benz Group, integrity

means doing the right thing. For us, this includes adher-

ing to external and internal rules, aligning our activities

with shared values, and following our moral compass.

New technologies and business models offer tremen-

dous opportunities, but at the same time, they pose

ethical and legal questions. That’s why we provide our

technical Compliance Management System, or tCMS for

short, to help our engineers address challenging ques-

tions and unclear legal situations during the entire

product development and certification process. We use

our Human Rights Respect System (HRRS) to make a

risk-based and systematic assessment of respect for

human rights at our Group companies and in the supply

Sustainability is part of the foundation of our Mercedes-

Benz strategy and thus an integral part of our corporate

strategy. We want to create permanent value for our

stakeholders: our customers, employees, investors,

business partners and society as a whole. This requires

a culture of integrity and future-oriented cooperation

with our workforce and our partners in industry, govern-

ment and society at large. Diversity is our driving force

for ideas, renewal and inventiveness, all of which we

actively strive to achieve. A central sustainability man-

agement system enables the effective planning of ambi- chains. We summarise our many years of commitment

tious goals and their implementation.

to human rights in our Principles of Social Responsibility

and Human Rights. These Principles serve as the bind-

ing foundation for the implementation of human rights

standards at the Mercedes-Benz Group.

For example, we have set ourselves an ambitious cli-

mate protection goal along the value chain: to make our

entire new vehicle fleet CO -neutral by 20ꢃ9. It encom-

2

passes climate neutrality at our suppliers, CO -neutral

production in our production facilities worldwide and

All of the divisions have formulated strategies or inten-

sified existing ones on the basis of their earnings and

growth targets, our commitment to sustainability, and

2

the CO -neutrality of our vehicles during the use phase.

2

We also want to drive forward the implementation of our CO -neutral mobility and integrity as guiding principles.

2

climate neutrality objective at our suppliers and part-

ners. Among other things, we are working together with

all of the steel suppliers to create a green steel supply

chain. Our Factory 56 is the benchmark with regard to

flexibility, efficiency, digitalisation and green production

for our global production network. In addition to climate

protection, we take on responsibility for air quality. By

2025, we want our new car fleet to no longer have any

relevant impact on nitrogen-dioxide pollution in urban

areas. Another important aim is to increasingly decouple

the consumption of resources per vehicle from the

growth in vehicle sales. We are working to close mate-

rial cycles and increase the proportion of secondary raw

materials in our vehicles, as well as further improving

the efficiency of our processes.

29

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Mercedes-Benz Cars Strategy

focus on our core business and in doing so to highlight

the customer experience even more strongly than

before and utilise the potential of digitalisation. Sustain-

ability, integrity and diversity serve as the foundation of

our strategy. Everyone’s actions are becoming increas-

ingly important with regard to climate change. We are

addressing this change and shaping the path towards

sustainable mobility.

In 2020, we presented our Mercedes-Benz Cars strat-

egy, which consists of six strategic pillars. Our goal is to

build the world’s most desirable cars. We want to fur-

ther increase our structural profitability and take the

lead in shaping the successful transformation to an

emission-free and software-driven future. We want to

MercedesꢃBenz Cars Strategy

Our goal: We will build the world’s most desirable cars.

Think

Focus

Expand

Embrace

Lead

Lower

and act

like a luxury

brand

on

profitable

growth

customer base

by growing

sub-brands

customers and

grow recurrent

revenues

in electric

drive and

car software

cost base

and improve

industrial

footprint

Sustainability, Integrity and Diversity as our foundation.

ꢃ0

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Building on the strategy we adopted for Mercedes-Benz

Cars in 2020, we took an important strategic step in

021 by switching from “Electric first” to “Electric only”.

In this way, we are clearly committed to all-electric

drive systems during the development of our vehicles

and also accelerating the transformation towards an

emission-free and software-driven future.

Focus on profitable growth

We want to make the accelerated transformation

towards an all-electric future profitable and to continue

our growth in the lucrative market segments. Important

ways in which this can be achieved are focusing and

further developing our portfolios by allocating funds to

the most profitable models, and good pricing. We want

to also employ these means for the systematic electrifi-

cation of our models, with appealing electric vehicles

throughout the entire Mercedes-Benz brand portfolio.

By optimising our mix of sales channels, we also plan to

target our customers even more effectively. One of the

focal points here is the expansion of online commerce.

2

Think and act like a luxury brand

Luxury has always been part of our DNA, but we will

focus our thoughts and actions even more strongly on it

in the future. Our claim as a luxury brand is to offer the

most desirable vehicles in all segments and throughout

all brands. Our understanding of luxury is shaped by a

harmony between pioneering technologies, extraordi-

nary aesthetics and integrated sustainability. We want

to create an intuitive and individualised experience for

our customers at every touchpoint with our brand — a

holistic luxury experience that fascinates, offers out-

standing moments, goes beyond people’s expectations

and sparks desires. To this end, we are working hard on

strategically realigning our products and services across

all brands. For example, we are reorienting our cam-

paign language and working closely with cooperation

partners in order to jointly make tomorrow’s individual

mobility visionary in scope. This includes experience

platforms that showcase contemporary topics from the

lives of our fans and customers and thus create

approachable and unique moments. We have the com-

plete customer journey in view here — from the first

contact with our brands to the purchase and driving of

our vehicles and the use of our range of services, we

want to offer our customers a comfortable, individual

and highly emotional experience.

Expand customer base by growing sub-brands

According to brand consultant Interbrand’s “Best Global

Brands 2021” report, Mercedes-Benz has strengthened

its leading position as the only European brand among

the world’s Top ꢅ0. As a result, we have remained the

most valuable and only luxury automotive brand among

the world’s Top 10 for the sixth year in a row. Not only

our outstanding S-Class luxury saloon car but also

Mercedes-Benz’s entire attractive brand portfolio — in

particular our exceptional Mercedes-AMG,

Mercedes-Maybach and Mercedes-EQ brands, as well

as our iconic G-Class product brand — contribute to

this success. Our Mercedes-Benz Cars strategy is raising

these brands to the next level and accelerating their

development so they can unfold their full potential and

achieve additional EBIT growth. To accomplish this, we

will create an even stronger interrelationship between

the brands Mercedes-AMG, Mercedes-Maybach and the

G-Class in order to exploit synergies and address our

customers even more effectively. This particularly

includes the adequate care of these special customer

groups online and in retail. We want our Mercedes-EQ

vehicles to position us as a leading tech brand not only

in the upper-range segment but also in all other vehicle

classes. This has already been highlighted by the suc-

cessful world premieres of the EQA, EQB, EQE and EQS

in 2021.

ꢃ1

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Embrace customers and grow recurrent revenues

In order to intensify and further boost customer loyalty,

we are systematically creating unique customer experi-

As an interim goal for 2022, we plan to offer battery

electric vehicles in all of the segments in which the

Mercedes-Benz brand is represented. Beginning in 2025,

ences along our entire customer journey and addressing customers are to be offered an all-electric alternative

customers in an individualised and data-driven manner.

The basic precondition for this is the availability of thor-

oughly digitalised sales processes. In this way, we can

flexibly adapt and enhance all channels — online and

offline, and from consulting to service — to the dynamic

customer requirements.

for every model and all new vehicle architectures

launched on the market are to be exclusively electric. In

2021 alone, we presented four new electric vehicles,

and these are to be followed by SUV variants of the EQS

and the EQE in 2022. The electrification will encompass

the entire Mercedes-Benz brand portfolio and is to

include the electric Mercedes-Maybach SUV in 202ꢃ

and an electric G-Class in 2024.

Two of the many examples of how we are already suc-

cessfully implementing this vision are the first pilot mar-

kets where our new vehicles can be bought online and

the data-based campaign for the EQS. Moreover, we can

provide our customers with tailored offers that enthuse

them about more than just the purchase of vehicles.

These include such things as after-sales services and

spare parts as well as the increasing demand for over-

the-air (OTA) updates and subscriptions to digital ser-

vices. This enables us not only to continuously enhance

the attractiveness of our products throughout their life

cycles but also boost our profitability through recurring

revenues.

We want to further increase our expertise in the field of

electric mobility and also boost vertical integration by

insourcing drive-system technologies for electric vehi-

cles. Our own electric motors are an important part of

this strategy with a clear focus on the efficiency and

costs of the overall system. To ensure more efficient

production and promote the future development of bat-

tery cells and modules, we plan to work together with

partners such as Automotive Cells Company SE (ACC) to

build eight cell factories worldwide. We are working

hard to prepare our global manufacturing network for

the production of all-electric vehicles. Beginning in

2022, eight electric vehicles from Mercedes-Benz will

drive off the assembly lines at seven locations on three

continents.

Lead in electric drive and car software

We at Mercedes-Benz want to become the leader for

electric mobility and vehicle software. Our previously

announced ambitious product development goals and

the market launch of new emission-free and soft-

ware-driven technologies have accelerated the strategic

step from “Electric first” to “Electric only”. In this dec-

ade, they are thus already paving the way for an

all-electric future. This means that we are preparing

ourselves to become all-electric wherever market con-

ditions allow by the end of this decade.

The market launch of the EQS has also set new bench-

marks for vehicle charging: “Plug & Charge” enables a

seamless charging process without requiring additional

steps for authentication and payment processing. More-

over, “Mercedes me Charge” allows our customers to

access one of the world’s largest charging networks,

which currently encompasses more than 690,000

direct-current and alternating-current charging points

(as of January 2022). In addition, Mercedes-Benz is

working together with partners on the global expansion

of the charging network.

ꢃ2

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

In order to underscore our claim to leadership for vehi-

Lower cost base and improve industrial footprint

Our accelerated transformation requires us to consist-

ently forge ahead with the pursuit of our profitability

and cash-flow objectives. We want to lower our break-

cle software, we plan to introduce our own data-based

and updatable Mercedes-Benz Operating System (MB.

OS), starting in 2024. We are using a proprietary system

in order to meet the needs of our customers even better even point and take additional steps towards reducing

in the future. In this way, we want to provide our cus-

tomers with a unique brand experience that includes

new digital services and product features and to keep

control of the interface with our customers in our

Mercedes-Benz ecosystem. With our new MB.OS oper-

ating system, we want to create the basis that will ena-

ble us to respond to customer requirements even faster

and more flexibly in the future, including during a prod-

uct’s life cycle — by means of over-the-air (OTA)

updates, for example. Another aim is to create smart

connectivity between the vehicle, the cloud and the IoT

world (Internet of Things).

the cost base and improving our industrial footprint. To

this end, we are also working on further reducing fixed

and variable costs as well as on lowering investment in

property, plant and equipment in relation to total

investment. By 2025, we want to reduce our fixed costs

by more than 20% relative to the comparable actual fig-

ures for Mercedes-Benz AG in 2019. Among other things,

we plan to achieve this by consistently reducing com-

plexity along the entire value chain. By 2025, we also

plan to reduce capital expenditure and investment in

research and development by more than 20% compared

to 2019. With its strategic step from “Electric first” to

“

Electric only”, Mercedes-Benz is also shifting its capital

allocation. We plan to achieve further cost reductions

by standardising battery platforms and creating scalable

vehicle architectures. In combination with improved

battery technology, we expect this to greatly reduce the

battery’s share of a vehicle’s total cost. We are therefore

sticking to our profitability targets even in an increas-

ingly battery electric world.

Today, we already meet the demanding legal require-

ments for an internationally certifiable system approval

for conditional driving automation according to SAE

Level ꢃ (pursuant to UN R15ꢂ) — the first automotive

company in the world to do so. Thus we can offer our

customers not only enhanced ride comfort and safety,

but also the luxury of reduced driver stress and the

freedom to carry out certain secondary activities. The

respective national road traffic regulations stipulate

which secondary activities a driver may legally perform.

Beginning in the first half of 2022, we want to offer our

customers DRIVE PILOT for the S-Class. This system

makes conditional driving automation (SAE Level ꢃ)

possible in congested traffic as well as in traffic jams on

selected stretches of German motorways at speeds of

up to 60km/h.

ꢃꢃ

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Mercedes-Benz Vans Strategy

“We exceed customers’ expectations with the most

desirable vans and services”

As part of our strategy process, the Mercedes-Benz

Vans Strategy, implemented in 2020, was confirmed in

principle and refined in certain areas. We have acceler-

ated our electrification strategy and firmly embedded

digitalization and data-driven business as an additional

guiding principle in our strategy.

Our goal is to exceed the expectations of our customers

with the most desirable vans and services. Mercedes-

Benz Vans builds premium vehicles that our customers

consider to be far more than a capital good. We aim to

continue to live up to this position by focusing our

activities on impressing our customers with our vans

and services.

The Mercedes-Benz Vans strategy consists of our goal,

five strategic pillars and three guiding principles.

MercedesꢃBenz Vans Strategy

Our goal: We exceed customers’ expectations with the

most desirable vans and services

Lead

Target

Focus

Embrace

Lower

in electric

drive and digital

solutions

premium

segments

on

profitable

growth

customers and

grow recurrent

revenues

total

cost base

Guided by economic, environmental and social sustainability

Accelerated by digitalization and data-driven business

Driven by a highly qualified, performance-minded and motivated team

ꢃ4

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Our strategy is based on five pillars:

Target premium segments

Mercedes-Benz Vans is proud to have greatly shaped

the vans market worldwide since the very beginning. As

part of the Mercedes-Benz brand family, we want to

sharpen our profile as a premium supplier of future-ori-

ented transport solutions for commercial and private

customers. For private customers, the V-Class and the

EQV are already successfully established in the pre-

mium segment. With the Concept EQT, we are giving a

Lead in electric drive and digital solutions

We intend to set new standards for sustainable electric

mobility and digital solutions. With the eVito Panel Van,

the eVito Tourer, the eSprinter and the EQV, the

Mercedes-Benz Vans portfolio is almost completely

electrified. In 2022, we will complete the electrification

of our van model series with the introduction of the

eCitan and the electrified variant of the T-Class. In order tangible impression of our first premium vehicle in the

to make our portfolio sustainable and future-proof, we

are focusing on the consistent further development of

high-performance electric variants. In the middle of the

decade, we plan to launch VAN.EA, a new, electric-only

architecture which will contribute to emission-free

mobility and transportation in the future.

small van segment for families and private customers

keen on leisure activities. For commercial customers,

Mercedes-Benz Vans offers premium vehicles in all van

segments with the Sprinter, the Vito and the new Citan.

In both the commercial and the private segment,

Mercedes-Benz Vans stands for the highest levels of

quality, reliability and sustainability.

Beginning in the second half of 2022, we will gradually

roll out a sustainable repair concept in all van segments

to prolong the life cycle of high-voltage batteries

installed in our vehicles. To the “three Rs” in the circular

economy of “reduce”, “reuse”, “recycle”, a fourth can

now be added: “repair”. To protect human rights, we will

only procure battery cells containing lithium and cobalt

from certified mines in the future. Furthermore, every

stage of the battery cell providers’ supply chains will be

Focus on profitable growth

Another key element of our strategy is the increased

focus on high-sales and high-margin markets as well as

sales channels. In parallel with the expansion of our

activities in Europe, we also intend to further intensify

our efforts in China, the United States and Canada and

to align our portfolio even more closely with the respec-

tive market requirements. An important new target

inspected according to OECD guidelines. When it comes group we have identified are up-and-coming sectors

to customer-oriented digital services, we want to further with great future potential such as the camper van seg-

strengthen our position. We aim to further expand the

broad range of Mercedes me services for private and

commercial customers. In addition, we continuously

work on systematically connecting our vehicles.

ment. At the same time, we are focusing on reducing

complexity, including the continuous review of our

product portfolio.

Embrace customers and grow recurrent revenues

Mercedes-Benz Vans will further intensify its coopera-

tion with customers in order to strengthen and expand

its long-term customer relationships. We aim to tailor

our products and services precisely to our customers’

needs in order to increase their satisfaction and loyalty

on a lasting basis. A focus here is on co-creation — the

joint development of segment-specific and user-spe-

cific solutions. Our goal is to generate additional reve-

nue potentials along the entire customer lifecycle: from

customer service to sales and after-sales services.

Moreover, we are pushing direct sales by implementing

our Retail of the Future concept while improving our

profitability.

ꢃ5

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Lower total cost base

Accelerated by digitalization and data-driven

At Mercedes-Benz Vans, we aim to continuously

improve our profitability and cash flow. At the same

time, we want to safeguard investments in the future as

well as the accelerated transformation to electric mobil-

ity. We want to continuously improve our processes,

increase flexibility and reduce the cost base. For

instance, we are fully unlocking the potential of digitali-

zation in order to increase our efficiency. We are con-

sistently examining our expenditures and evaluating the

possibilities for strategic partnerships to safeguard our

competitiveness. This is how we intend to significantly

reduce our cost base in the long run.

business

Digitalization and a business model driven by data are

highly relevant for Mercedes-Benz Vans, and were thus

embedded in our strategy as additional guiding princi-

ples. Our comprehensive digital strategy aims to exploit

the potentials of the digital transformation as effectively

as possible. Among other things, this includes the opti-

mal design of the digital customer experience, the

expansion of our digital product and service portfolio as

well as the optimization of our internal business pro-

cesses by means of digital technologies. In all of our

activities, we aim for maximum interconnection and

synergies with Mercedes-Benz Cars.

Our strategic actions are guided by three principles:

Driven by a highly qualified, performance-minded

and motivated team

In times of profound changes, the motivation and com-

mitment of our employees is more important than ever.

Guided by economic, environmental and social

sustainability

As part of the Mercedes-Benz Group, Mercedes-Benz

Vans has made sustainability an integral part of its strat- With our People Principles, we focus on our employees

egy. At Mercedes-Benz Vans, sustainability means creat- and define how we want to communicate, lead and col-

ing economic, environmental and social value for all of

our stakeholders: customers, employees, investors,

business partners and society as a whole. We have set

ambitious targets for our sustainability themes.

laborate. In addition, we offer our employees targeted

qualification measures for future-oriented topics. We

also provide new ideas for a state-of-the-art working

environment, in which our employees can continue to

work successfully in the future.

One of our main goals, formulated in our Ambition 20ꢃ9,

is CO neutrality. In this strategy, we are striving to

2

make the fleet of new private and commercial vans

(sold by Mercedes-Benz AG or by Mercedes-Benz AG as

general contractor, including upfitter solutions)

CO -neutral over the entire lifecycle by 20ꢃ9. As early as

2

2022, the production in our own Mercedes-Benz Vans

plants worldwide will be CO -neutral.

2

ꢃ6

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

Mercedes-Benz Mobility Strategy

We are supporting the transformation to electric

mobility

Mercedes-Benz Mobility has a clear ambition: “Best-in-

class mobility services — customer-focused, seamlessly

integrated and flexible”. We want to be the company of

choice for our customers — not only for financing and

leasing contracts but also for fleet management and

flexible rental and subscription services, as well as

insurance and other vehicle-related services.

When a leasing contract expires, we actively inform our

customers that they can switch to an electric vehicle.

Our rental and subscription services make it easier for

people to use electric cars without tying them down for

the long term. The switch to electric mobility is made

even easier by charging and payment services.

We make a seamlessly integrated customer

experience possible

In the years ahead, Mercedes-Benz plans to sell more

and more vehicles online. Our mobility services should

therefore be completely integrated into the digital brand

experience. As a result, customers will be able not only

Our Mercedes-Benz Mobility 2025 strategy focuses on

our customers. We know their needs, and we want to

gain an even better data-based understanding of them

in the future. This will boost their loyalty to the

Mercedes star, lead to the development of additional

vehicle-related services, and contribute to the growth of to buy their preferred vehicle online, but to obtain

the Mercedes-Benz Group. Our service offerings here

should be seamlessly integrated into the Mercedes-

Benz brand environment.

financing, leasing and insurance online as well.

Specifically, we are focusing on the following areas of

action.

MercedesꢃBenz Mobility Strategy

Our goal: Best-in-class mobility services — customer-oriented,

seamlessly integrated and flexible

We support the

sustainable

Our services are

100% digital and

seamlessly integrated

into the world

We digitise and

automate our

processes end-to-end

with the help of

strategic partnerships

for technology

We are becoming a

data-driven company

transformation to

electric mobility and

our products generate

additional income

from services

of Mercedes-Benz

and operations

We are strengthening our high-performance culture

ꢃꢂ

Annual Report 2021 · Mercedes-Benz Group

To Our Shareholders

We automate and digitalise our internal processes

Our product landscape will be harmonised internation-

ally. In addition, we want to systematically automate our

internal processes, thereby simplifying and accelerating

them. In doing so, we are prioritising information tech-

nology partnerships.

We are evolving into a data-driven company

Luxury-class mobility services are data-based mobility

services. That’s why we are developing the necessary

teams and skills so that we can gain an even better

understanding of our customers’ needs and align our

services with them even more precisely.

We are enhancing our high-performance culture

Our values remain the lodestar for the further develop-

ment of our corporate culture. The central tenets of our

cooperation are openness, integrity and respect, focus

on the customer, financial and social responsibility,

diverse and motivated employees, the will to achieve

top performance and a commitment to more sustaina-

bility.

ꢃ8

Annual Report 2021 · Mercedes-Benz Group

Image subject

Selection tbd.

ꢃ9

Annual Report 2021 · Mercedes-Benz Group

COMBINED

MANAGEMENT REPORT

WITH

NON-FINANCIAL

DECLARATION

4

0

Annual Report 2021 · Mercedes-Benz Group

COMBINED MANAGEMENT REPORT WITH

NON-FINANCIAL DECLARATION (1/2)

4

ꢁ

3 Corporate Profile

3 Business model

ꢇ Important events

ꢄ Performance measurement system

ꢄ Financial performance measures

ꢉꢀ Key performance indicators

ꢉꢅ Declaration on Corporate Governance

52 Economic Conditions and Business Development

ꢉꢆ The world economy

ꢉ3 Automotive markets

ꢉꢁ Business development

ꢉꢇ Investment and research activities

ꢉꢈ CO emissions of the new car fleet in Europe

ꢀ

59 Profitability, Liquidity and Capital Resources,

Financial Position

ꢇꢀ Profitability

ꢇꢄ Liquidity and capital resources

ꢈꢀ Financial position

84 Mercedes-Benz Group AG (condensed version in

accordance with HGB)

ꢈꢁ Profitability

ꢈꢉ Financial position, liquidity and capital resources

ꢈ7 Risks and opportunities

ꢈꢈ Outlook

89 Non-Financial Declaration

ꢈꢄ Sustainability as value added

ꢄ7 Environmental issues

ꢅꢀꢀ Employee issues

ꢅꢀꢈ Social issues

ꢅꢅ3 Integrity and compliance

Annual Report 2021 · Mercedes-Benz Group

COMBINED MANAGEMENT REPORT WITH

NON-FINANCIAL DECLARATION (2/2)

124 Overall Assessment of the Economic Situation

125 Takeover-Relevant Information and Explanation

130 Risk and Opportunity Report

ꢅ3ꢀ Risk and opportunity management system

ꢅ33 Risks and opportunities

ꢅ33 Economic conditions

ꢅ3ꢁ Industry and business risks and opportunities

ꢅ37 Company-specific risks and opportunities

ꢅꢁꢅ Financial risks and opportunities

ꢅꢁ3 Legal and tax risks and opportunities

ꢅꢁꢄ Overall assessment of the risk and opportunity

situation

150 Outlook

ꢅꢉꢀ The world economy

ꢅꢉꢅ Automotive markets

ꢅꢉꢅ Unit sales

ꢅꢉꢆ Revenue and earnings

ꢅꢉꢆ Free cash flow and cash conversion rate

ꢅꢉ3 Dividend

ꢅꢉ3 Investment and research activities

ꢅꢉꢁ CO emissions of the new car fleet in Europe

ꢀ

ꢅꢉꢁ Overall statement on future development

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Corporate Profile

Business model

transferred approximately 5% of the shares of Daimler

Truck Holding AG to the pension plan assets of

Mercedes-Benz AG.

Daimler AG was renamed as Mercedes-Benz Group AG

with effect from 1 February 2022. Unless there is a spe-

cific historical context to the former company name in

individual cases, the new company name is used in this

Management Report and the name Mercedes-Benz

Group is used for the Group. The same applies to the

former Daimler Mobility AG, which was renamed as

Mercedes-Benz Mobility AG on 1 February 2022.

The spin-off and hive-down of the Daimler commercial

vehicle business has changed the Group’s structure.

Since the conclusion of the transaction in December

2021, the business operations of the Mercedes-Benz

Group have been managed by the divisions Mercedes-

Benz Cars, Mercedes-Benz Vans and Mercedes-Benz

Mobility. For the purposes of external reporting, the

Mercedes-Benz Cars and Mercedes-Benz Vans seg-

Mercedes-Benz can look back on a tradition covering

more than 1ꢃ5 years — a tradition that goes back to Got- ments have been combined into the reportable segment

tlieb Daimler and Carl Benz, the inventors of the auto-

mobile, and features pioneering achievements in auto-

motive engineering. Today, the company is a luxury

vehicle manufacturer with an outstanding range of cars

and vans. Its product portfolio is rounded off by a range

of customised financial services and mobility services.

Mercedes-Benz’s goal is to continue playing a leading

role in the development of products and services for

the future of mobility. The automotive industry is in the

Mercedes-Benz Cars & Vans. The former Daimler Trucks

& Buses segment is included in the statement of income

and the statements of cash flows as discontinued oper-

ations until the date of its deconsolidation and is pre-

sented in the reconciliation. We use the equity method

of accounting for the minority interest of ꢃ5% in Daimler

Truck Holding AG that existed at the end of 2021, which

is also included in the reconciliation. The financial ser-

vices business that was to be placed in the Daimler

process of a fundamental transformation, and we intend commercial vehicle business in the future is included in

to play a major role in actively shaping that change.

Mercedes-Benz Group AG is the parent company of the

Mercedes-Benz Group and has its headquarters in

Stuttgart.

the statement of income and the statements of cash

flows until the date of its deconsolidation. Until then, it

was part of the Mercedes-Benz Mobility segment.

Details of the accounting method used for the spin-off

and hive-down can be found in the Profitability chapter

and in Note ꢃ of the Notes to the Consolidated Financial

Statements.

With the approval of the Supervisory Board, the Board

of Management of Daimler AG decided on ꢃ0 July 2021

to spin off and hive down large parts of the former

Daimler Trucks & Buses segment, including the related

financial services business. The shareholders approved

the spin-off and hive-down agreement at the Extraordi-

nary General Meeting of Daimler AG on 1 October 2021.

The General Meeting of Daimler Truck Holding AG gave

its approval on 5 November 2021. The entry of the spin-

off and hive-down in the commercial register on 9

December 2021 completed the spin-off and hive-down

of the Daimler commercial vehicle business and it was

deconsolidated. In January 2022, Daimler AG

Mercedes-Benz Group AG is closely linked with

Mercedes-Benz AG and functions as an operating unit

that defines the Group’s strategy. It also makes strategic

decisions for business operations and, as the Group

parent company, ensures the effectiveness of organisa-

tional, legal and compliance-related functions through-

out the Group. Mercedes-Benz AG is responsible for the

business of Mercedes-Benz Cars & Vans. Mercedes-

Benz Mobility AG is responsible in particular for the

Group’s financing and leasing products.

4

ꢃ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

This Annual Report combines the management reports

B.01

for Mercedes-Benz Group AG and for the Group. The

Combined Management Report has been expanded with

the addition of the combined Non-Financial Declaration

of Mercedes-Benz Group AG and of the Group.

The brand world of the Mercedes-Benz Group

Mercedes-Benz Group

Revenue:

€168.0 billion

Employees:

172,425

Mercedes-Benz Cars & Vans

Mercedes-Benz Mobility

With its strong brands, the Mercedes-Benz Group is

active in nearly all the countries of the world. The Group

has production facilities in Europe, North and South

America, Asia and Africa. The global networking of

research and development activities as well as of pro-

duction and sales locations gives Mercedes-Benz

advantages in the international competitive environ-

ment and also offers additional growth opportunities.

Revenue:

€109.6 billion

158,228

Revenue:

Employees:

€27.9 billion

9,531

Employees:

Mercedes-Benz Cars offers a broad product portfolio,

ranging from the family of compact models to a highly

varied range of C-Class and E-Class models, SUVs, road-

sters, coupés and convertibles, and S-Class luxury

saloons. In addition to the Mercedes-Benz brand, the

product portfolio also encompasses the brands

Mercedes-AMG, Mercedes-Maybach, Mercedes-EQ and

smart, as well as the G-Class brand. The Mercedes me

brand provides access to the digital services of

Mercedes-Benz. In this way, we are expanding the

Mercedes-Benz brand values through the addition of

specific individual characteristics so that we can fulfil

individual customer wishes even more effectively. Both

our customers and the sales figures confirm that elec-

tric mobility is gaining ground, and we can meet this

customer need with our Mercedes-EQ brand. The most

between four battery electric vans: the eSprinter, the

eVito panel van, the eVito Tourer and the EQV multi-pur-

pose vehicle. In 2022, the product range will be supple-

mented by the T-Class van for private customers and its

electrified variant, as well as by the eCitan. Mercedes-

Benz Vans will then offer battery-electric vans in all seg-

ments. The next generation of the eSprinter has already

been announced. The Mercedes-Benz Vans division has

important markets for Mercedes-Benz Cars in 2021 were manufacturing facilities in Germany, Spain, the United

China with ꢃ8% of unit sales, the United States (1ꢃ%),

Germany (11%), the other European markets (2ꢃ%),

South Korea (4%) and Japan (2%).

States and Argentina, and also produces vehicles in the

Fujian Benz Automotive Co., Ltd. joint venture in China.

The production of the Citan and T-Class small vans with

the respective electric variants is part of the strategic

alliance with Renault-Nissan-Mitsubishi. The most

important markets for Mercedes-Benz Vans in 2021

were Germany with 25% of unit sales, the remaining

EUꢃ0 markets (European Union, United Kingdom, Swit-

zerland, Norway) with ꢃ8%, the United States with 1ꢃ%

and China with 10%.

Mercedes-Benz Vans is a global supplier of a complete

portfolio of vans. The models offered in the commercial

segment comprise the Sprinter large van, the Vito mid-

size van (marketed as the “Metris” in the United States)

and, since the year 2021, the new Citan urban delivery

van. The range of Mercedes-Benz vans in the pri-

vate-customer segment consists of the V-Class full-size

multi-purpose vehicle and the Marco Polo camper vans

and recreational vehicles. Mercedes-Benz Vans has

embedded its claim to electric mobility leadership in its

strategy and is systematically electrifying all of its

model series. Today, customers can already choose

4

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

The Mercedes-Benz Mobility division supports the sales

Daimler Trucks & Buses remains one of the world’s big-

of the Mercedes-Benz Group’s vehicle brands worldwide gest manufacturers of trucks of over six tons gross vehi-

with tailored mobility and financial services. These ser-

vices range from customised leasing and financing

packages and insurance solutions to flexible subscrip-

tion and rental models and fleet management services

for business customers. Mercedes-Benz Mobility has

approximately five million leased and financed vehicles

in ꢃ5 markets for its financing, leasing and insurance

business alone, which is clear proof of its ability to offer

outstanding services that meet a wide range of require-

ments. The mobility ecosystem is rounded off by flexi-

ble-use services such as Mercedes-Benz Rent (rental

vehicles), as well as by investments in companies that

offer mobility services. Along with the services offered

by the YOUR NOW joint ventures, Mercedes-Benz

Mobility also offers premium ride-hailing services with

luxury vehicles via StarRides and Blacklane.

cle weight. Daimler Trucks & Buses operates a global

network in which it produces trucks under the brands

Mercedes-Benz, Freightliner, Western Star, FUSO and

BharatBenz, and buses under the brands Mercedes-

Benz, Setra, Thomas Built Buses and FUSO. Daimler

Trucks & Buses has more than 40 production facilities

that are located in North America, Europe, Asia and

Latin America.

Daimler Trucks’ product range includes light-, medium-

and heavy-duty trucks for long-distance, distribution

and construction-site haulage, as well as special vehi-

cles that are used mainly in municipal applications. Due

to close links in terms of production technology, the

division’s product range also includes buses of the

Thomas Built Buses and FUSO brands. The Daimler

Buses product range comprises city and inter-city buses,

touring coaches and bus chassis. Whereas the European

market is mainly for complete buses, the business in

Latin America, Mexico, Africa and Asia focuses on the

production and distribution of bus chassis.

The description of the business model of Daimler Trucks

&

Buses refers to the time before the spin-off and hive-

down of the commercial vehicle business took effect,

i.e., until 9 December 2021.

4

5

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Important events

Changes in the Board of Management of Daimler AG

At its meeting on 2ꢃ April 2021, the Supervisory Board

of Daimler AG decided to extend the terms of Board of

Management members Martin Daum and Harald Wil-

helm. The appointment of Harald Wilhelm as the

Daimler AG Board of Management member responsible

for Finance, Controlling and Daimler Mobility was

extended until 202ꢂ. Correspondingly, Harald Wilhelm

was also reappointed as the Mercedes-Benz AG Board

of Management member for Finance and Controlling.

Supervisory Board of Daimler AG elects

Bernd Pischetsrieder as its new Chairman

The Supervisory Board of Daimler AG elected a new

Chairman during its inaugural meeting directly following

the virtual Annual General Meeting for the financial year

2020 on ꢃ1 March 2021. Bernd Pischetsrieder suc-

ceeded Manfred Bischoff, who stepped down after

heading the Supervisory Board for 14 years.

Additional changes to the composition of the

Supervisory Board

On 21 July 2021, the Group announced that Wilfried

Porth, the member of the Board of Management respon-

A large majority of the shareholders at the virtual Annual sible for Human Resources and the Director of Labour

General Meeting on ꢃ1 March 2021 elected Liz Centoni,

Chief Strategy Officer and General Manager of Applica-

tions at Cisco Systems, Inc., Ben van Beurden, Chief

Executive Officer at Shell plc, and Martin Brudermüller,

Chairman of the Board of Executive Directors of BASF

SE, as new members of the Supervisory Board. They

Relations, would be stepping down in December 2021

after working for ꢃꢂ years for the company and serving

for 1ꢃ years on the Board of Management. Porth stepped

down at his own request at the time of Daimler AG’s

realignment, which consisted of the spin-off and hive-

down of Daimler’s commercial vehicle business. The

succeeded Petraea Heynike and Jürgen Hambrecht, who, Supervisory Board of Daimler AG appointed Sabine

like Manfred Bischoff, also stepped down from the

supervisory body. The terms of the newly elected mem-

bers began after the conclusion of the Annual General

Meeting in 2021 and will expire at the end of the Annual

General Meeting held in 2025.

Kohleisen to succeed Porth as the member of the Board

of Management responsible for Human Resources and

Director of Labour Relations.

On 2ꢂ October 2021, it was announced that in the

course of the Group’s split into the truck and bus busi-

ness and the car and van activities, the Daimler AG

Supervisory Board would appoint Jörg Burzer, the

Mercedes-Benz AG Board of Management member

responsible for Production and Supply Chain Manage-

ment, to the Daimler AG Board of Management, effec-

tive 1 December 2021.

On ꢃ0 July 2021, Daimler AG announced that as a result

of the Group’s planned realignment, which involved the

spin-off and hive-down of the truck and bus business,

the former Daimler Supervisory Board members Marie

Wieck and Joe Kaeser would relinquish their positions

and concentrate on the Supervisory Board of Daimler

Truck Holding AG in the future.

Markus Schäfer, the Daimler AG Board of Management

member responsible for Group Research and the Chief

Operating Officer of Mercedes-Benz Cars, became the

Chief Technology Officer on the Daimler AG Board of

Management as well as the Mercedes-Benz AG Board of

Management member responsible for Development and

Procurement. In this expanded position, he also took on

overall responsibility for electric drive systems and

vehicle software as well as for connectivity and autono-

mous driving.

The former Daimler Supervisory Board members Marie

Wieck and Joe Kaeser relinquished their positions in

the course of the company’s realignment and will con-

centrate on the Supervisory Board of Daimler Truck

Holding AG in the future. A large majority of the virtual

Extraordinary General Meeting on 1 October 2021

elected Helene Svahn, Professor in Nanobiotechnology

at the Royal Institute of Technology, Sweden, and Olaf

Koch, Partner and Managing Director of Zintinus GmbH,

as their successors on the Supervisory Board of

Daimler AG.

4

6

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

In order to further standardise the Board of Manage-

Daimler Truck AG and Cummins Inc. plan global

cooperation for medium-duty commercial vehicle

engines

Daimler Truck AG and the American engine manufacturer

Cummins Inc. announced on 2ꢃ February 2021 that they

had signed a memorandum of understanding concern-

ing a global strategic partnership for medium-duty

engines.

ment positions of Daimler AG and Mercedes-Benz AG,

Hubertus Troska, the Daimler AG Board of Management

member responsible for Greater China, was also

appointed to the Board of Management of Mercedes-

Benz AG.

Management’s recommendations approved with

a large majority at the Annual General Meeting

At the virtual Annual General Meeting on ꢃ1 March 2021,

an overwhelming majority of the shareholders approved

the management’s recommendations. Among other

Daimler Truck AG and Volvo Group establish fuel-cell

joint venture cellcentric

On 1 March 2021, Daimler Truck AG and Volvo Group

things, they decided to pay a dividend of €1.ꢃ5 per share established a previously announced fuel-cell joint ven-

(

2020: €0.90) for the 2020 financial year. The total divi-

ture. To this end, Volvo Group purchased 50% of the

shares of the existing company Daimler Truck Fuel Cell

GmbH & Co. KG for approximately €0.6 billion. Daimler

Truck AG and Volvo Group agreed to rename the com-

pany as cellcentric GmbH & Co. KG.

dend amounted to €1.4 billion (previous year: €1.0 bil-

lion). The activities of the Board of Management mem-

bers were approved by 9ꢂ.94% of the share capital

represented at the Annual General Meeting. The figure

for the Supervisory Board members was 95.1ꢂ%. The vir-

tual Annual General Meeting was followed on the Inter-

Mercedes-Benz Drive Systems Campus:

net by more than 12,000 viewers. A total of 5ꢂ.21% of the Stuttgart-Untertürkheim focuses on “Electric only”

share capital was represented at the meeting.

As part of Ambition 20ꢃ9 (the company’s path to

achieving CO neutrality), Mercedes-Benz is systemati-

2

Overwhelming majority at the Extraordinary

General Meeting vote for the spin-off of the Daimler

commercial vehicle business

cally reorganising its Mercedes-Benz Drive Systems

business unit and the plant in Stuttgart-Untertürkheim

in line with “Electric only”. The company is investing a

nine-digit amount in the transformation of the site,

After the Supervisory Board and the Board of Manage-

ment of Daimler decided on ꢃ February 2021 to evaluate which in the future will focus its research, development

a spin-off of the truck & bus business and make prepa-

rations for a separate stock-exchange listing of Daimler

Truck, an overwhelming majority of the Daimler AG

shareholders at the virtual Extraordinary General Meet-

ing on 1 October 2021 voted to approve the company’s

historic realignment. A total of 99.90% of the share capi-

tal represented at the meeting approved the spin-off

and hive-down of the Daimler commercial vehicle busi-

ness and the subsequent listing of Daimler Truck Hold-

ing AG as a separate company on the Frankfurt Stock

Exchange. An overwhelming majority (99.89%) of the

share capital at the shareholders’ meeting also voted in

favour of changing the name of Daimler AG to

Mercedes-Benz Group AG, effective 1 February 2022.

The new name emphasises the company’s future focus

on the cars and vans of the brands Mercedes-Benz,

Mercedes-AMG, Mercedes-Maybach, Mercedes-EQ and

Mercedes me, as well as our iconic G-Class product

brand.

and production on electric drive technologies. Starting

in 202ꢃ, a new factory for the small-batch production of

lithium-ion battery cells and an in-house battery-safety

lab will complement Mercedes-Benz’s existing research

and development activities in the field of battery tech-

nology. Battery systems for all-electric and plug-in

hybrid vehicles will be produced at the Mercedes-Benz

battery factories in Hedelfingen and, in the future, Brühl.

The production and assembly of electric-drive parts for

future Mercedes-EQ models shall start at the end of

2024.

BMW Group and Daimler Mobility sell PARK NOW to

EasyPark Group

On 9 March 2021, BMW Group and Daimler Mobility AG

announced that they would be selling their joint venture

PARK NOW Group to EasyPark Group. After the authori-

ties gave their approval, the transaction was concluded

on 1 June 2021.

4ꢂ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Involvement in Hꢂ Green Steel

Mercedes-Benz acquires interest in ACC

It was announced on 25 May 2021 that Mercedes-Benz

has become the first car manufacturer to participate in

the Swedish start-up H2 Green Steel (H2GS), in order to

As announced on 24 September 2021, Mercedes-Benz

has acquired an interest in the European battery-cell

manufacturer Automotive Cells Company SE (ACC) in

order to promote the development and production of

next-generation high-performance battery cells and

modules. Together with its partners Stellantis and

TotalEnergies, Mercedes-Benz intends to accelerate the

development of ACC to achieve sustainable state-of-

the-art cell technology, competitive costs and a cell

capacity of at least 120 gigawatt-hours by the end of

this decade. The partners plan to build eight cell facto-

ries worldwide, of which four will be located in Europe.

use CO -free steel in series-produced vehicles.

2

Mercedes-Benz is working together with all our steel

suppliers to create a green steel supply chain. To this

end, the partners are intentionally not using carbon off-

setting measures, but instead preventing and reducing

CO emissions. In this endeavour, the partnership with

2

H2GS is another consistent step in the direction of CO₂

neutrality. With its Ambition 20ꢃ9 strategy, Mercedes-

Benz is striving to create a fleet of completely con-

nected and CO -neutral vehicles by 20ꢃ9.

2

Mercedes-Benz and NVIDIA enter into development

cooperation for automated driving

Pioneering work for electric charging infrastructure

On 5 July 2021, it was announced that the three leading

commercial vehicle manufacturers Daimler Truck,

TRATON GROUP and Volvo Group have signed a memo-

randum of understanding regarding the creation and

operation of a high-performance public charging net-

work for heavy-duty battery-electric long-haul trucks

and touring coaches in Europe. The parties aim to initi-

ate and greatly accelerate the creation of a publicly

accessible charging infrastructure. In this way, they

want to increase customers’ confidence in the electrifi-

Mercedes-Benz AG entered into a development cooper-

ation with NVIDIA Corporation, Santa Clara, California,

United States, in November 2021. The goal of the devel-

opment cooperation is to develop one of the most

advanced computer and software architectures in the

automotive industry for use in Mercedes-Benz model

series. This new architecture will enable future vehicles

to be equipped with automated driving and parking

functions starting in 2024.

cation process and also make a clear contribution to the Daimler Truck shares listed on the stock exchange

creation of a climate-neutral transport system in the

European Union.

Following the spin-off and hive-down of the Daimler

commercial vehicle business, trading of the Daimler

Truck Holding AG shares began at the Frankfurt Stock

Exchange on 10 December 2021.

Mercedes-Benz presents sustainable brand

experience at IAA MOBILITY

At IAA MOBILITY in Munich (ꢂ–12 September 2021),

Mercedes-Benz utilised all of the opportunities that the

new concept of the International Motor Show (IAA) has

to offer. Mercedes-Benz presented a wide variety of

theme and experience areas within the city, on the Blue

Lane and in the trade-fair hall so that visitors could

emotionally experience the transformation into a sus-

tainable, emission-free and digital future. The key mes-

sage was “Lead in Electric”. Mercedes-Benz showed the

entire breadth of its current and future electric mobility

portfolio. Seven of the ten premieres were of all-electric

models, ranging from the EQB and the EQE to the

Mercedes-Benz EQG and Mercedes-Maybach EQS con-

cept vehicles.

4

8

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Performance measurement system

B.02

Calculation of value added

Value-based management

Cost of

capital (%)

The performance measurement system used at the

Mercedes-Benz Group is designed to ensure that our

investors’ interests and expectations are taken into

account within the framework of a value-based man-

agement system. Value added shows the extent to

which the Group and its divisions achieve or exceed the

return requirements of the investors, thus creating

additional value.

Value

Profit

measure

Net assets

×

=

–

added

Cost of capital

B.ꢀꢃ

Cost of capital

ꢂꢀꢂꢁ

2020

in %

Value added is derived from the financial value drivers

which, due to their direct relationship to ongoing busi-

ness operations, are utilised as financial performance

indicators for the periodic assessment of the perfor-

mance of the Group and its divisions.

Group, after taxes

ꢄ

ꢁꢂ

8

12

Automotive divisions, before taxes

Mercedes-Benz Mobility, before taxes

In this sense, value added can be calculated as the dif-

ference between the measure of operating profit (EBIT

or net operating profit) and the cost of capital of the

Financial performance measures

Profit measure

average net assets.



B.02

The measure of operating profit at the divisional level is

EBIT (earnings before interest and income taxes). EBIT

thus reflects the divisions’ responsibility for profit and

loss. EBIT that is calculated at the Group level takes into

account centrally managed matters and eliminations. In

order to provide a more transparent presentation of our

ongoing business, we additionally calculate and report

adjusted EBIT for both the Group and the divisions. The

adjustments include individual items if they lead to

material effects in a reporting year. These individual

items can relate in particular to legal proceedings and

The return on net assets (RONA) is calculated from the

ratio of EBIT to net assets. Value is created for our

shareholders when RONA exceeds the cost of capital.

The required rate of return on net assets, and hence the

cost of capital rate, is derived from the minimum rates

of return that equity investors and lenders expect on

their invested capital. During the year under review, the

cost of capital rate of the Group remained unchanged at

8% after taxes. For the automotive divisions, the cost of

capital rate remained at 12% before taxes; for

Mercedes-Benz Mobility, an unchanged cost of equity of related measures, restructuring measures and M&A

2% before taxes was applied. B.03 transactions. Group EBIT minus the centrally managed

1



income taxes equals net operating profit.

chapter Profitability



B.12 in the

Until the day of the spin-off and hive-down of the

Daimler commercial vehicle business on 9 December

2021, the statements regarding the management system,

the financial performance measures and the most

meaningful performance indicators also encompassed

the scope of the former segment Daimler Truck & Buses.

The quantitative development of value added and the

related financial performance measures is explained in

the chapter Profitability.

49

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Return on sales

The adjustments include individual items if these items

lead to material effects in a reporting period. These

individual items can relate in particular to legal pro-

ceedings and related measures, restructuring measures

and M&A transactions. On the basis of adjusted CFBIT

and adjusted EBIT, we report an adjusted cash conver-

sion rate (adjusted CCR) for the automotive divisions.

As one of the main factors influencing value added,

return on sales is of particular importance for assessing

the profitability of the automotive divisions. Return on

sales is the ratio of EBIT to revenue, whereby unit sales

are the primary source of revenue. The measure of prof-

itability for Mercedes-Benz Mobility is not return on

sales but return on equity (the ratio of EBIT to average

equity on a quarterly basis). On the basis of adjusted

EBIT, we report an adjusted return on sales for the auto- Key performance indicators

motive divisions and an adjusted return on equity for

Mercedes-Benz Mobility.

The key financial indicators for measuring the operating

financial performance of the Mercedes-Benz Group, in

addition to EBIT and revenue, are the free cash flow of

the industrial business, investment in property, plant

and equipment, and research and development expend-

iture. In addition, adjusted return on equity and new

business are the key performance indicators for

Mercedes-Benz Mobility.

Net assets

All assets, liabilities and provisions for which the auto-

motive divisions are responsible in day-to-day opera-

tions are allocated to them. Performance measurement

at Mercedes-Benz Mobility is implemented on an equity

basis. Net assets at the Group level include the net

operating assets of the automotive divisions and the

equity of Mercedes-Benz Mobility, as well as assets and

liabilities from income taxes and other reconciliation

items which cannot be allocated to the divisions. Aver-

age annual net assets are calculated on the basis of

In addition to the financial indicators, we use various

non-financial indicators to help us manage the Group.

Of particular importance in this respect are the unit

sales, which we also use as the basis for our capacity

and human resources planning. Another key perfor-

average quarterly net assets.

E

Profitability

mance indicator is the figure for the CO emissions of

ꢂ

Cash flow

our fleet of new cars in Europe (European Union, Nor-

way and Iceland). This takes into account the indicator’s

great importance for the management of the Company,

especially with regard to sustainability aspects.

A change in net assets — for example as a result of

investments — generally leads to the application or

release of liquid funds. Along with earnings, net assets

thus also have a direct effect on the cash flow. Of out-

standing importance for the financial strength of the

As of the financial year 2022, the respective values from

Mercedes-Benz Group is the free cash flow of the indus- Mercedes-Benz Cars and Mercedes-Benz Vans are used

trial business, which comprises the cash flows at the

automotive divisions and the cash flows from interest,

taxes and other reconciliation items that cannot be allo-

cated to the divisions. The operating cash flow before

interest and taxes (CFBIT) for the automotive divisions

is derived from EBIT and the change in net assets. The

cash conversion rate (CCR) is the ratio of CFBIT to EBIT

over a period of time and is an important measure for

cash-flow management. In order to provide a more

transparent presentation of our ongoing business, we

additionally calculate and report the adjusted free cash

flow of the industrial business and the adjusted CFBIT

of the automotive divisions.

as key performance indicators for unit sales, invest-

ments in property, plant and equipment and research

and development expenditure instead of the aggregated

Group values, as these only have an emphasised rele-

vance as controlling factors for the automotive divisions.

5

0

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Declaration on Corporate Governance

The Declaration on Corporate Governance combined for

the Company and the Group in accordance with Section

2

89f and Section ꢃ15d of the German Commercial Code

can be found in the chapter Declaration on Corpo-

rate Governance and can also be viewed on the Inter-

net at group.mercedes-benz.com/dcg.

E

w

Pursuant to Section ꢃ1ꢂ Subsection 2 Sentence 6 of the

German Commercial Code (HGB), the purpose of the

audit of the statements pursuant to Section 289f Sub-

sections 2 and 5 and Section ꢃ15d of the HGB by the

auditors is limited to determining whether such state-

ments have actually been provided.

5

1

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Economic Conditions

and Business Development

The world economy

were increasingly lifted beginning in the second quarter

and completely eliminated in some areas. This led to a

strong economic recovery in the summer months.

Towards the end of the year, supply problems in the

manufacturing sector slowed down the further recovery

During the reporting year, the world economy recovered

strongly from the severe downturn it had suffered in

2020 as a result of the global covid-19 pandemic. At

about 5.5%, it expanded at a pace last seen in the 19ꢂ0s. and a renewed flare-up of the pandemic strained the

In industrialised countries, the increasing availability of

vaccines allowed many restrictions to be lifted, thus

triggering a dynamic upswing in which economic output

increased by approximately 5% compared to the previ-

ous year. The emerging markets were also able to more

than offset the prior year’s decrease, growing by around

confidence of companies and consumers alike. None-

theless, the euro zone’s economy as a whole grew by

5.2% and thus returned to its pre-crisis level at the end

of the year. Consumer prices also rose significantly in

the euro zone, increasing by 2.6% on average compared

to the prior year, although the increases differed widely

between the various member states. The inflation rate

actually reached 5.0% in December.

6.5%. This situation also caused world trade to recover

and expand by a good 12%. Nevertheless, the ongoing

pandemic and regional restrictions led to problems — in

some cases considerable — in global supply chains, and

caused supply bottlenecks in many sectors of the econ-

omy. During the second half of the year in particular,

China was the first major economy to fully recover.

However, the country’s economic growth was consider-

ably less dynamic later in the year due to the govern-

this noticeably slowed down the economic recovery and ment’s rigorous zero-covid strategy, a more restrictive

led to a significant increase in inflation in many regions.

monetary and fiscal policy, regulatory interventions, a

slowdown of the property sector and a shortage of

energy as a result of a lack of coal. But thanks to posi-

tive base effects, the gross domestic product increased

strongly by 8.1% during the year as a whole.

These developments also affected the United States.

After the economic recovery had been driven by gov-

ernment stimulus measures and transfer payments in

the first half of the year, the spread of the delta variant

of covid-19 and the worsening supply bottlenecks

caused a noticeable slowdown during the rest of the

year. Moreover, the strong increase in US consumer

price inflation to ꢂ.0% in December and 4.ꢂ% for the

year as a whole dampened consumer confidence and

Currency exchange rates were volatile in this environ-

ment. Against the US dollar, the euro moved between

$1.121 and $1.2ꢃ4 during the year. At the end of 2021, the

euro was about 8% weaker than at the end of 2020. The

range of fluctuation of the Japanese yen against the

purchasing power. Nonetheless, the United States econ- euro was 125.2 to 1ꢃ4.1. Year-on-year, the value of the

omy as a whole grew very dynamically by 5.ꢂ% in 2021

and was already able to return to its pre-crisis level in

the second quarter.

euro increased by around ꢃ% against the yen. At the end

of 2021, the value of the British pound compared to the

euro was about ꢂ% higher than at the end of the previ-

ous year. The euro lost about 1% against the Brazilian

real. By contrast, it rose by almost ꢂ0% against the Turk-

ish lira. The euro fell considerably against the Russian

rouble, losing around ꢂ% in relative value.

In the euro zone, a severe wave of infections in the win-

ter of 2020/21 triggered another recession and caused

the economy to get off to a weak start to the year.

Thanks to the lower numbers of infections, restrictions

5

2

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Following a coronavirus-related drop in 2020, demand

Semiconductor-related supply bottlenecks also

for oil recovered during the reporting year and was tem-

porarily boosted even further by the strong rise in the

price of natural gas. At the same time, the supply of oil

was restricted. As a result, the price of oil rose to over

USD 80 per barrel in 2021, its highest level in three

years. Oil cost approximately USD ꢂ8 per barrel at the

end of the year, or around 50% more than at the end of

occurred in the van markets. Nevertheless, the com-

bined market segment for mid-size and large vans

recovered considerably, growing by around 10% in the

EUꢃ0 region (European Union, United Kingdom, Switzer-

land and Norway). The development of the small-van

segment was much less favourable. Following a sharp

contraction in 2020, this market segment shrank in vol-

ume by an additional 12% in the EUꢃ0 region. The US

market for large vans contracted by almost 5% com-

pared with the previous year. Meanwhile, the Chinese

market for mid-size vans once again greatly surpassed

its volume of the previous year, increasing by almost

2020. The average price for the year as a whole was

about 65% higher than that for the previous year.

Automotive markets

20%. In Brazil, sales of large vans surpassed those of

The development of the global car market differed con-

siderably in the first and second halves of 2021. Thanks

to the strong recovery of the world economy, unit sales

rose at a clearly double-digit rate in the first half of the

year, compared to the low pandemic-related level of

the previous year by around 14%.

The dynamic macroeconomic situation was also

reflected in the overall favourable development of the

main sales markets for trucks. However, the develop-

ment could have been even better in many areas had it

not been for the semiconductor-related production bot-

tlenecks. In North America, the market for heavy-duty

trucks (Class 8) was much larger (+15%) than the cri-

sis-impacted low level of the previous year. With an

increase of 19%, the market for heavy-duty trucks also

grew considerably in the EUꢃ0 region. The Brazilian

market also recovered strongly, with growth of around

45%. By contrast, the Japanese market contracted

slightly by 5%.

2020. However, the scarcity of semiconductors caused

supply bottlenecks to become increasingly severe later

in the year. As a result, the global market contracted

noticeably year-on-year despite continued high cus-

tomer demand in the second half of 2021. For the year

as a whole, the prior year’s low level was slightly sur-

passed by about 5%.

This development was visible in all of the major sales

regions over the year. During 2021, the Chinese market

was about 6.5% above the 2020 level, having con-

tracted much less than other regions in the previous

pandemic year. During the reporting year, the European

market was unable to rise above the very low level of

Major sales markets for heavy buses were restrained in

their development. The market in the EUꢃ0 region only

succeeded in reaching the previous year’s low level.

Following the pronounced drop in 2020, the market in

Brazil also remained at about the same volume as in

that year.

2020. Although the US market for cars and light trucks

was also weak during the second half of the year, when

it was substantially lower than in 2020, it rose slightly

year-on-year, by around ꢃ%.

5

ꢃ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Business development

Unit sales

B.04

Unit sales structure of Mercedes-Benz Cars (in %)

The Mercedes-Benz Group sold a total of 2.ꢂ5 million

vehicles in the reporting year (2020: 2.84 million). On

the one hand, the sales development was boosted by

the recovery of key markets from the coronavirus-re-

lated effects of the previous year. On the other hand, it

was impacted by worsening supply bottlenecks for sem-

iconductors. On balance, our automotive divisions,

including Trucks & Buses until the spin-off and hive-

down of Daimler’s commercial vehicle business, posted

unit sales that were slightly lower than in the previous

year. At the beginning of 2021, we had expected sales to

increase significantly. In the interim report for the third

quarter, we had already adjusted the Group’s forecast

for total unit sales to a level slightly lower than the fig-

ure recorded in the prior year.

7

12

49

15

SUVs*

A-/B-Class

E-Class

C-Class

Others

17

*

including GLA and GLB

3

15

48

Asia

Europe

34

North America

Other markets

In 2021, Mercedes-Benz Cars sold a total of 1,94ꢃ,900

units, which is slightly lower than in the previous year

(2020: 2,08ꢂ,200). We remain number one in the pre-

mium segment in Germany and some other key Euro-

pean markets, as well as in South Korea and Japan,

measured by the number of new vehicle registrations. At

the beginning of 2021, Mercedes-Benz Cars had still

expected its unit sales to increase significantly.

The unit sales figures for Mercedes-Benz Cars provided

above include our top brands: Mercedes-AMG sold

1

ꢃ5,100 units (+12%), while sales of the G-Class

The A-Class and B-Class models, including the CLA and

CLA Shooting Brake, which were affected by the global

supply bottlenecks for semiconductors, achieved unit

sales of ꢃ22,800 vehicles (-28%). Sales of C-Class vehi-

cles decreased by 2ꢃ% to 2ꢃ9,000 saloons, estates,

coupés and cabriolets. A total of 295,100 vehicles of the

increased to 40,500 units (+18%) and unit sales of

Mercedes-Maybach brand vehicles rose to 16,600

(+68%).

In Europe, Mercedes-Benz Cars sold 662,ꢃ00 vehicles,

or 16% fewer units than in 2020. Among other things, we

E-Class were delivered to customers (-11%). Unit sales of registered decreases in the core markets of Germany

our sports cars (SL, SLC and AMG GT) amounted to

0,900 vehicles and were thus ꢃ9% lower than in the

previous year. The growth of the SUV segment provided

a boost, which caused our unit sales there to rise to

(-2ꢃ%), the United Kingdom (-21%) and Spain (-21%). In

China, the single largest market for Mercedes-Benz Cars,

unit sales of ꢂꢃ4,ꢂ00 vehicles were achieved (2020:

ꢂ58,100). At 290,600 vehicles, our unit sales in North

America surpassed the previous year’s level (2020:

286,800). In the region’s main market, the United States,

our sales rose by 1% to 251,400 units.

1

946,600 vehicles (+ꢂ%). This was partly due to electri-

fied models such as the EQA, of which we sold 24,800

units. Global sales of the S-Class, including the top

models from the Mercedes-Maybach and AMG brands,

rose to 91,100 units in 2021 (+6ꢃ%). We sold ꢃ8,400

fortwo and forfour vehicles of the smart brand world-

wide, thus surpassing the prior year’s level (2020:

ꢃ5,200).

5

4

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Mercedes-Benz Vans finished the 2021 financial year

Mercedes-Benz Mobility concluded 1.6 million new

financing and leasing contracts worth a total of €6ꢃ.6

billion in 2021. The total value of all new contracts was

thus slightly below the prior-year level (-6%; -5% after

with unit sales of ꢃ86,200 vehicles worldwide (2020:

ꢃꢂ4,ꢂ00). Although 2021 was impacted by a scarcity of

semiconductors, unit sales were nevertheless slightly

higher than in the previous year. This corresponds to the adjusting for the effects of currency translation). The

forecast that was made at the beginning of 2021. At

46,000 units, sales in the EUꢃ0 core region remained

at the previous year’s level (2020: 245,200). We sold

8,200 vehicles in Germany during this period (2020:

09,500). At 55,ꢃ00 units, sales in North America were

at the same level as in the previous year (2020: 54,400). New business (€26.5 billion, -ꢃ%) and contract volume

effects of the supply bottlenecks for semiconductors

prevented us from achieving our original forecast of a

slight increase in new business. New business

2

9

decreased in the United States and China in particular.

1

We achieved a new record of 48,ꢃ00 vehicles sold in

the United States (2020: 4ꢂ,500). We also achieved a

new record in China of ꢃ8,500 units sold (2020:

ꢃ0,500). In Latin America, our sales rose by 41% to

(€6ꢃ.0 billion, -ꢃ%) were slightly lower in the Europe

region. The fleet business, consisting of the brands Ath-

lon and Daimler Fleet Management, had a total of

ꢃ98,000 contracts at the end of the year (-1%). This cor-

responds to a contract volume of €6.6 billion.

16,900 units.

In 2021, the business development of Mercedes-Benz

Mobility was greatly affected by the spin-off and hive-

down of Daimler’s commercial vehicle business. The

first part was separated with effect from 9 December

The first stage of the spin-off and hive-down of the

commercial vehicle business only affected the Americas

region and Africa & Asia-Pacific (excluding China). This

effect has to be taken into consideration for the busi-

ness development in these regions, which is described

below.

2

021 with the remaining parts to follow in stages in

022. The separation had substantial effects on con-

tract volume. However, new business in 2021 still

included a large proportion of the commercial vehicle

business. As a result, the change with respect to the

prior year’s figure is less pronounced than for the con-

tract volume.

New financing and leasing contracts worth €20.ꢃ billion

(-ꢂ%) were concluded in the Americas. Contract volume

amounted to €ꢃ8.4 billion at the end of December and

was thus much lower (-25%) than at the end of 2020.

New business (€6.5 billion, -4%) and contract volume

(€1ꢃ.2 billion, -21%) were also considerably lower in the

Africa & Asia-Pacific region (excluding China).

At the beginning of the year 2021, we had still expected

contract volume to remain stable. However, this

assumption still included the contract volume of the

spun-off and hived-down Daimler commercial vehicle

business. Following the spin-off and hive-down,

New business decreased sharply in China, where we

concluded new leasing and financing contracts worth

Mercedes-Benz Mobility had a contract volume of €1ꢃꢃ.ꢂ €10.ꢃ billion (-1ꢃ%) in 2021. At the end of 2021, contract

billion (-11%; -15% after adjusting for currency-transla-

tion effects) at the end of 2021.

volume in China amounted to €19.0 billion (+ꢂ%).

5

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

After staying at a low level in the first few months of

021 due to covid-19, the number of transactions for the

Investment and research activities

2

mobility services at the YOUR NOW joint ventures FREE

NOW & REACH NOW, SHARE NOW and CHARGE NOW

recovered significantly as covid-19-related restrictions

were eased later in the year. Last year, the mobility ser-

vice providers registered a total of 2ꢃ5 million transac-

Investments in property, plant and equipment

We intend to use our divisional strategies to shape the

transformation of the automotive industry from a posi-

tion of leadership in a sustainable, customer-focused,

innovative and efficient manner. In view of this situation,

tions. This figure includes the transactions at PARK NOW sustainability and in particular the electrification of our

until the joint venture was sold on ꢃ1 May 2021.

product range are especially important, as is the digital

networking of our products and processes along all

stages of the value chain. To this end, we will have to

continue to invest extensively in our global production

network. In doing so, we are prioritising the projects in

all of our divisions in which we will invest in the future.

Before the spin-off and hive-down went into effect on

9

December 2021, unit sales at Daimler Trucks in 2021

were significantly above the previous year’s level. In

020, unit sales had been severely impacted by the

2

consequences of the covid-19 pandemic. In 2021,

despite supply bottlenecks for semiconductors in par-

During the year under review, our investments in prop-

ticular during the second half of the year, unit sales rose, erty, plant and equipment amounted to €4.6 billion and

largely as a result of market recoveries. Until the spin- were thus much lower than in the previous year (2020:

off and hive-down went into effect on 9 December 2021, €5.ꢂ billion). At the beginning of the year, we expected a

4

0ꢃ,900 heavy-, medium- and light-duty trucks as well

volume at about the same level as in 2020. One of the

main reasons for this deviation was the spin-off and

as buses of the Thomas Built Buses and FUSO brands

were delivered in the year under review (2020: ꢃ58,ꢃ00). hive-down of the commercial vehicle business. We

In financial year 2021, Daimler Buses sold 1ꢂ,ꢃ00 buses

and bus chassis worldwide (2020: 20,200) before the

spin-off and hive-down went into effect on 9 December

already adjusted our forecast accordingly when we

reported on the results of the third quarter.

2021. The marked decrease was mainly influenced by

the lower number of business days in the traditionally

strong sales month of December.

B.ꢀꢅ

Investments in property, plant and equipment by division

ꢂꢀꢂꢁ

ꢆꢀꢆꢀ

ꢆꢅ/ꢆꢀ

At the beginning of 2021, we had forecast a major

increase in unit sales for the Daimler Trucks & Buses

segment during the whole of 2021 and we confirm this

forecast at the time of the spin-off and hive-down.

In millions of euros

% change

Mercedes-Benz Group

in % of revenue

ꢆ,ꢅꢇꢈ

ꢂ.ꢇ

ꢉ,7ꢁꢅ

3.7

-ꢆꢀ

-ꢆꢆ

Mercedes-Benz Cars & Vans

in % of revenue

ꢃ,ꢇꢄꢇ

ꢃ.ꢅ

ꢁ,ꢈꢇꢆ

ꢁ.ꢄ

Order situation

At the end of 2021, incoming orders were at a high level

at Mercedes-Benz Cars. Although the semiconductor

shortage restricted the availability of some vehicle mod-

els, this did not have a substantial impact on incoming

orders as a whole. On the product side, this develop-

ment was primarily driven by our EQ models, SUV mod-

els and the new S-Class. Despite the restricted availa-

bility of some models due to semiconductor supply

bottlenecks, Mercedes-Benz Vans set a new record for

unit sales in 2021. High demand for the Sprinter, the

Vito, the V-Class, the Citan and the electric vans con-

tributed to this positive development.

Mercedes-Benz Mobility

in % of revenue

ꢇꢄ

3ꢄ

+ꢅꢀꢀ

-ꢅꢀ

ꢀ.ꢃ

ꢀ.ꢅ

Daimler Trucks & Busesꢊ

in % of revenue

ꢇꢁꢀ

ꢂ.ꢀ

7ꢈꢄ

ꢆ.3

1

Until the spin-off and hive-down took effect on 9 December 2021.

5

6

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

In 2021, investments in property, plant and equipment

Research and development

at Mercedes-Benz Cars & Vans focused on production

preparations for the new C-Class and the battery elec-

tric vehicles on the EVA2 platform. In addition, we

invested considerable funds in battery production. At

Our research and development expenditure amounted

to €9.1 billion in 2021 and was thus slightly higher than

in the previous year (2020: €8.6 billion). This amount

corresponds to our forecast for the year published in

the Annual Report 2020. €2.4 billion (2020: €2.5 billion)

of the development costs were capitalised, which repre-

sents a capitalisation rate of 2ꢂ% (2020: 29%). The

amortisation of capitalised research and development

expenditure totalled €2.1 billion during the year under

review (2020: €1.9 billion).

€ꢃ.8 billion, investments in property, plant and equip-

ment in 2021 were 22% lower than the high level of the

prior year. The investments in property, plant and

equipment amounted to €ꢃ.6 billion at Mercedes-Benz

Cars and €0.2 billion at Mercedes-Benz Vans. At the

beginning of 2021, we had still expected the total

investments in property, plant and equipment at

Mercedes-Benz Cars & Vans to be at the previous year’s

level.

Research and development expenditure at Mercedes-

Benz Cars & Vans amounted to €ꢂ.ꢂ billion (2020: €ꢂ.2

billion) and was thus slightly higher than in the previous

year. The focus was on topics such as the next genera-

tion of electric vehicles and battery production. In addi-

tion, we intensified our research and development

expenditure for digitalisation and automated driving.

Research and development expenditure amounted to

€ꢂ.2 billion at Mercedes-Benz Cars and €0.5 billion at

Mercedes-Benz Vans. At the beginning of 2021, we

expected the total research and development expendi-

ture at Mercedes-Benz Cars & Vans to be slightly higher

than in the previous year.

Investments in property, plant and equipment at

Daimler Trucks & Buses amounted to €0.ꢂ billion until

the spin-off and hive-down took effect on 9 December

2021 and were thus considerably lower than in the pre-

vious year (2020: €0.8 billion). In addition to the trans-

formation, the focus was on the optimisation of produc-

tion and the sales and spare-parts network, as well as

on investments in infrastructure projects. At the begin-

ning of 2021, we had forecast that investments in prop-

erty, plant and equipment would be much higher during

the whole of 2021 than in the previous year. We already

adjusted this forecast to a level well below that of the

prior year when we reported on the results of the third

quarter of 2021. The shortening of the reporting period

played a major role in this adjustment.

Research and development expenditure at Daimler

Trucks & Buses in 2021 amounted to €1.5 billion until the

spin-off and hive-down went into effect and was thus at

the previous year’s level (2020: €1.5 billion). The most

important projects of Daimler Trucks & Buses were in

the areas of emission standards and fuel efficiency, as

well as customised products and technologies for

important growth markets. At the beginning of 2021, we

forecast that research and development expenditure in

2

021 would be slightly higher than in the previous year.

When we reported on the results of the third quarter of

021, we adjusted this forecast to the previous year’s

2

level for the period until the spin-off and hive-down

went into effect.

5

ꢂ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

CO emissions of the new car fleet in Europe

B.ꢀ6

2

Research and development expenditure by division

In the reporting year, the average CO emissions of our

ꢂꢀꢂꢁ

ꢆꢀꢆꢀ

ꢆꢅ/ꢆꢀ

2

total car fleet in Europe (European Union, Norway and

Iceland) as measured on the basis of legal regulations

will have amounted to an estimated 115g/km (WLTP,

including vans that are registered as passenger cars).

In millions of euros

% change

Mercedes-Benz Group

thereof capitalised

ꢈ,ꢁꢀꢅ

ꢂ,ꢆꢃꢅ

ꢇ,6ꢈꢅ

ꢂ,ꢂ6ꢂ

ꢁ,ꢆ6ꢈ

ꢁꢇꢃ

ꢈ,ꢇꢅꢁ

ꢆ,ꢁꢄꢈ

7,ꢅꢄꢄ

ꢆ,3ꢄꢅ

ꢅ,ꢁꢈꢈ

ꢅꢀ7

+ꢇ

-3

The CO target of 125g/km was thus achieved in Europe

2

Mercedes-Benz Cars & Vans

+7

-ꢉ

(European Union, Norway and Iceland) in 2021. As a

thereof capitalised

result, our CO emissions decreased significantly com-

2

_D_a_i_m_l_e_r_T_r_u_c_k_s_&_B_u_s_e_s1

-ꢅ

pared to the comparable WLTP value for 2020 of 1ꢃ6g/

km, as had been forecast at the beginning of 2021.

thereof capitalised

+ꢇꢆ

1

Until the spin-off and hive-down took effect on 9 December 2021.

5

8

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Profitability, Liquidity and Capital

Resources, Financial Position

To provide a better insight into the Group’s profitability,

liquidity and capital resources, and financial position,

the condensed statement of income, the condensed

statement of cash flows and the condensed statement

of financial position are shown for the Mercedes-Benz

Group as well as for the “Industrial Business” and

Spin-off and hive-down of Daimler’s commercial

vehicle business

The spin-off and hive-down of the Daimler commercial

vehicle business was completed with the entry of the

spin-off and hive-down in the Commercial Register on

9 December 2021 and the Daimler commercial vehicle

business was deconsolidated. As of ꢃ1 December 2021,

the Mercedes-Benz Group held a minority interest of

ꢃ5% in Daimler Truck Holding AG. The interest is

accounted for using the equity method.

“

Mercedes-Benz Mobility”. The industrial business and

Mercedes-Benz Mobility columns represent a business

point of view.

Until the spin-off and hive-down of the Daimler com-

mercial vehicle business on 9 December 2021, the

industrial business comprised the vehicle segments

The criteria for classification as “discontinued opera-

tions” and as assets and liabilities “held for distribution

Mercedes-Benz Cars & Vans and Daimler Trucks & Buses. or sale” in accordance with the IFRS 5 accounting

After the spin-off and hive-down, the former Daimler

Trucks & Buses segment and the equity-method valua-

tion of the investment in Daimler Truck Holding AG is

shown in the reconciliation of the reportable segments

to the Group.

standard have been met with the approval for the trans-

action of the Board of Management and the Supervisory

board since ꢃ0 July 2021.

The discontinued operations, the deconsolidation of the

spun-off assets and liabilities, and classifications as

held for sale as of ꢃ1 December 2021 have the following

effects on the consolidated statement of income, the

consolidated statement of cash flows and the consoli-

dated statement of financial position.

Mercedes-Benz Mobility is identical to the Mercedes-

Benz Mobility segment. In order to ensure that the EBIT

of Mercedes-Benz Mobility can be compared with the

previous year, the scheduled depreciation and the equi-

ty-method measurement valuation of the non-current

assets classified as held for distribution or sale, which

have not been recognized since ꢃ0 July 2021 from the

Group’s perspective, are shown in the reconciliation. In

the segment reporting, the segment earnings of

Mercedes-Benz Mobility are thus reported inde-

pendently of the effects of the spin-off and hive-down

of the Daimler commercial vehicle business.

Continuing operations are presented in the

consolidated statement of income; the profit or loss

after tax of discontinued operations is shown in a sepa-

rate line after profit of continuing operations. The previ-

ous year’s figures have been adjusted accordingly.

The profit from the deconsolidation is shown in the rec-

onciliation and relates not only to the former Daimler

Trucks & Buses segment, but also to the Mercedes-Benz

Mobility segment. In the course of deconsolidation,

Intra-Group eliminations between the industrial busi-

ness and Mercedes-Benz Mobility are generally allo-

cated to the industrial business. Eliminations of transac- earnings were allocated to the parts of the segments to

tions between continuing and discontinued operations

are generally included in discontinued operations. For

transfers of fixed assets, the elimination is attributed to

the disposed operation.

be disposed of based on the allocation of the fair value

of Daimler’s commercial vehicle business.

5

9

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration



Group revenue is shown in Table B.07 and Group EBIT Adjustment of individual items

is shown in Table B.09 also for the total of continuing



To make the presentation of the ongoing business more

transparent, adjusted figures are also calculated and

reported for both the Group and the segments. The

adjustments include individual items insofar as they

lead to significant effects in a reporting year. These indi-

vidual items can relate in particular to legal proceedings

and related measures, restructuring measures and M&A

and discontinued operations.

In the consolidated statement of cash flows, the con-

solidated cash flows from continuing and discontinued

operations are shown for the reporting period and the

previous year. The free cash flow of the industrial busi-

ness, net liquidity and net debt are also reported on this transactions. Further information on the performance

basis. In addition, the free cash flow of the industrial

business for continuing operations is reported.

measure system can be found in the “Corporate Profile”

section of this Annual Report.

In the consolidated statement of financial position,

those assets and liabilities of the Daimler commercial

vehicle business as of ꢃ1 December 2021 are presented

as assets and liabilities held for sale that are to be

transferred to the Daimler Truck Group or sold to exter-

nal third parties in 2022. The carrying amounts of the

previous year are shown in accordance with the previ-

ous method of presentation in accordance with IFRS 5.

The assets and liabilities classified as held for distribu-

tion since ꢃ0 July 2021 were deconsolidated as of

Profitability

Consolidated statement of income of the Mercedes-

Benz Group

Revenue from continuing operations of €1ꢃꢃ.9 billion

in 2021 was significantly above the prior-year figure

(2020: €121.8 billion). Also adjusted for negative

exchange-rate effects, it was significantly higher than in

2020.

 

B.07 B.08

9

December 2021.

The increase in revenue was primarily due to the signifi-

cantly improved sales structure at the Mercedes-Benz

Cars & Vans division.

Detailed information on the spin-off and hive-down of

the Daimler commercial vehicle business and the scope

of the discontinued operations, the assets and liabilities

spun-off as part of the deconsolidation and the assets

and liabilities classified as held for sale can be found in

Revenue from continuing and discontinued

operations amounted to €168.0 billion (2020:

Note 3 of the Notes to the Consolidated Financial State- €154.ꢃ billion).

ments.

In the 2020 Group Management Report, it was fore-

casted that revenue in 2021 would be significantly

above the prior-year level. This forecast was also con-

firmed in the interim report for the third quarter of 2021

for revenue from continuing and discontinued opera-

tions of the Mercedes-Benz Group. The expectation was

thus met at the end of the year.

Unless otherwise stated, the following information on

the consolidated statement of income of the Mercedes-

Benz Group relates exclusively to continuing operations.

60

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

B.ꢀꢇ

Selling expenses increased by €0.2 billion to €9.2 bil-

Revenue by segment and region

lion. In the previous year, the measures and adjust-

ments to a pension and healthcare plan in the United

States initiated as a result of the covid-19 pandemic led

to a reduction in selling expenses. As a percentage of

revenue, selling expenses decreased from ꢂ.4% to 6.9%.

2

021

ꢆꢀꢆꢀ

ꢆꢅ/ꢆꢀ

In millions of euros

% change

Revenue from continuing opera-

tions

133,893

34,078

ꢅꢆꢅ,77ꢈ

3ꢆ,ꢉ3ꢅ

ꢅꢀ

ꢉ



B.08

Revenue from discontinued opera-

tions

In the past financial year, general administrative

expenses increased by €0.ꢃ billion to €2.8 billion. The

increase is partly due to the use of short-time work in

Germany in 2020. As a percentage of revenue, general

administrative expenses remained at the prior-year level

Revenue from continuing and

discontinued operations

1ꢉ7,971

ꢅꢉꢁ,3ꢀꢄ

ꢄ

Segments¹

Mercedes-Benz Cars & Vans

Mercedes-Benz Mobility

Reconciliation²

109,ꢉ48

27,941

30,382

ꢄꢈ,ꢉ7ꢇ

ꢆ7,ꢇꢄꢄ

ꢆꢈ,ꢀ3ꢁ

ꢅꢅ

ꢅ

of 2.1% (2020: 2.1%).



B.08

ꢈ

Research and non-capitalised development

expenditure of €5.5 billion in 2021 was above the pri-

or-year level (2020: €4.8 billion). It is 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 as well as safety technologies,

automated and autonomous driving and the digital con-

nectivity of the products. As a proportion of revenue,

research and non-capitalised development costs

increased from 4.0% to 4.1%. Further information on the

Group’s research and development is provided in the

Regions¹

Europe

ꢉ5,924

24,424

47,5ꢉ1

41,752

45,439

25,437

9,047

ꢇꢁ,ꢆꢆꢇ

ꢆꢉ,ꢆꢇꢆ

ꢁꢆ,ꢄ37

37,ꢈꢀꢅ

3ꢄ,ꢄꢁꢁ

ꢆꢅ,3ꢁ3

7,ꢆꢀꢆ

3

-3

thereof Germany

North America

thereof United States

Asia

ꢅꢅ

ꢅꢀ

ꢅꢁ

ꢅꢄ

ꢆꢇ

thereof China

Other markets

1

Revenue by segment and region is shown for continuing and discontinued operations.

The volumes of the former Daimler Trucks & Buses segment until the time of the decon-

solidation are shown in the reconciliation.

“

Investment and research activities” section of this

2

The reconciliation includes eliminations between the segments and from transactions

between continuing and discontinued operations.

Combined Management Report. B.08



Other operating income of €1.2 billion was below the

Cost of sales amounted to €10ꢃ.2 billion in 2021,

level of the previous year (2020: €1.8 billion). Other

increasing by 1.6% compared with the previous year. Pri- operating income includes the share attributable to the

or-year cost of sales were impacted by production and

cost adjustments in response to the covid-19 pandemic.

On the other hand, expenses in connection with the

adjustment and realignment of capacities within the

spin-off and hive-down of the Mercedes-Benz Mobility

segment. The resulting loss (after deduction of transac-

tion costs) amounts to €ꢂ82 million. The share attributa-

ble to the spin-off and hive-down of the former Daimler

global production network at the Mercedes-Benz Cars & Trucks & Buses segment is reported in profit from dis-

Vans segment adversely affected cost of sales in the

previous year. At the Mercedes-Benz Mobility segment

higher expenses for credit-risk provisions and the

impairment of software in the context of optimising the

IT architecture had a negative impact on cost of sales in

continued operations. In March 2021, in connection with

the founding of the fuel-cell joint venture Daimler Truck

Fuel Cell GmbH & Co. KG (now cellcentric GmbH & Co.

KG; cellcentric), there was also a positive effect on

earnings of €1.2 billion, which is attributable almost

equally to the Mercedes-Benz Cars & Vans segment and

the former Daimler Trucks & Buses segment. Other

operating income includes the share attributable to the

the previous year.



B.08

Overall, gross profit in relation to revenue increased

from 16.6% to 22.9%.

61

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Mercedes-Benz Cars & Vans segment. The portion

attributable to Daimler Trucks & Buses is reported in the

profit/loss from discontinued operations. B.08

from continuing and discontinued operations to

adjusted EBIT from continuing and discontinued opera-

tions is shown in table B.10.



In 2021, profit from equity-method investments of

Net interest expense amounted to €0.2 billion (2020:

€0.1 billion). B.08

€1.4 billion was above the prior-year level (2020:

0.ꢂ billion). After the previous year was strongly



€

impacted by the covid-19 pandemic, a recovery in the

markets in 2021 resulted in significantly improved profit

from equity-method investments. This led to an

increase of €0.2 billion in profit from the Chinese

investment in Beijing Benz Automotive Co., Ltd. (BBAC)

and of €0.2 billion in profit from the mobility services of

the YOUR NOW group. In addition, the impairments of

the carrying amounts of investments in BAIC Motor Cor-

poration Ltd. (BAIC Motor) decreased by €0.2 billion.

The tax expense of €4.8 billion (2020: €1.9 billion)

recognised under income taxes increased mainly due to

the increased profit before income taxes. The effective

tax rate for 2021 was ꢃ0.1% (2020: ꢃ2.ꢃ%). Note 10 to

the Consolidated Financial Statements includes further

information on the factors affecting the tax rate.



B.08

After income taxes, profit from discontinued

operations amounted to €12.4 billion. This profit essen-

tially comprises the profit from the spin-off and hive-

down of the former Daimler Trucks & Buses segment of

€10.0 billion (after deduction of transaction costs). In

addition, profit from the ongoing business of the dis-

continued operations, after taxes, of €2.4 billion is also

included. The portion from the spin-off and hive-down

attributable to Mercedes-Benz Mobility is reported in

other operating income from continuing operations.



B.08

Other financial income of €0.ꢃ billion was an improve-

ment of €0.6 billion from the prior-year expense of

€

0.ꢃ billion. This resulted primarily from the increase in

discount factors for non-current other provisions of

0.2 billion and the increase in the measurement of

equity interests at fair value of €0.2 billion. B.08

€



B.08

The Mercedes-Benz Group achieved earnings before

interest and taxes (EBIT) of €16.0 billion in 2021, which Net profit of €2ꢃ.4 billion is significantly above the pri-

is significantly higher than in the previous year (2020:

6.1 billion). Exchange-rate effects had a negative net

impact. B.08

or-year figure (2020: €4.0 billion). Net profit of €0.4 bil-

lion is attributable to non-controlling interests

(2020: €0.4 billion). Net profit attributable to the

shareholders of Daimler AG amounts to €2ꢃ.0 billion

(2020: €ꢃ.6 billion), representing an increase in

€



EBIT from continuing and discontinued operations

increased from €6.6 billion to €29.1 billion and was thus



earnings per share to €21.50 (2020: €ꢃ.ꢃ9). B.08

significantly higher than the prior-year level.



B.09

The calculation of earnings per share is based on an

unchanged average number of outstanding shares of

1,069.8 million.

The forecast made in the 2020 Management Report was

thus fulfilled at the end of 2021. For the Group we had

forecasted a significant increase in EBIT compared with

the previous year, which was particularly impacted by

the covid-19 pandemic. This forecast was confirmed in

the interim report for the third quarter of 2021 for the

Mercedes-Benz Group, also taking into account the

spin-off and hive-down at the end of 2021.

Further information on the individual items of the con-

solidated statement of income is provided in Notes 5ff.

of the Notes to the Consolidated Financial Statements.

The Mercedes-Benz Group’s adjusted EBIT from contin-

uing and discontinued operations amounted to €19.2 bil-

lion (2020: €8.6 billion). The reconciliation from EBIT

62

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Table



B.09 shows the composition of Group EBIT from

continuing operations based on the individual segments

and the total of the EBIT of the Mercedes-Benz Group

from continuing and discontinued operations.

B.ꢀꢄ

Mercedes-Benz

Group

Mercedes-Benz

Mobility

Condensed statement of income

Industrial Business

2

021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

In millions of euros

Revenue

133,893

-103,218

30,ꢉ75

ꢅꢆꢅ,77ꢈ

-ꢅꢀꢅ,ꢉꢄꢆ

ꢆꢀ,ꢅꢈꢇ

105,952

-80,328

25,ꢉ24

-8,502

-1,908

ꢄꢁ,ꢀ7ꢄ

-77,ꢀꢆꢁ

ꢅ7,ꢀꢉꢉ

-ꢈ,ꢆꢈ3

-ꢅ,7ꢆꢉ

27,941

-22,890

5,051

-ꢉ92

ꢆ7,ꢇꢄꢄ

-ꢆꢁ,ꢉꢇꢈ

3,ꢅ3ꢅ

-ꢇꢈ3

Cost of sales

Gross profit

Selling expenses

General administrative expenses

-9,194

-ꢈ,ꢄꢇꢇ

-2,808

-ꢆ,ꢉꢀ7

-900

-7ꢈꢆ

Research and non-capitalised

development costs

-5,4ꢉ7

1,153

1,352

317

-ꢁ,ꢈ3ꢄ

ꢅ,7ꢄ3

7ꢁ7

-5,4ꢉ7

973

-ꢁ,ꢈ3ꢄ

ꢅ,ꢇ3ꢆ

ꢅ,ꢅꢀ7

-ꢆꢄꢆ

-

180

-

ꢅꢇꢅ

-3ꢇꢀ

-3ꢅ

Other operating income

Profit/loss on equity-method investments, net

Other financial income/expense, net

EBIT

1,492

323

-140

-ꢉ

-3ꢆ3

ꢇ,ꢀꢄꢅ

-ꢅ3ꢁ

ꢉ,ꢄꢉ7

-ꢅ,ꢄꢆꢇ

ꢁ,ꢀ3ꢅ

-ꢆꢆ

1ꢉ,028

-217

12,535

-209

ꢁ,ꢇꢉꢉ

-ꢅꢆꢁ

3,493

-8

ꢅ,ꢁ3ꢇ

-ꢅꢀ

Interest expense

Profit from continuing operations, before income taxes

Income taxes

15,811

-4,7ꢉ1

11,050

12,34ꢉ

23,39ꢉ

390

12,32ꢉ

-3,854

8,472

12,34ꢉ

20,818

ꢁ,ꢉ3ꢅ

-ꢅ,ꢁꢅ3

3,ꢅꢅꢈ

-ꢆꢆ

3,485

-907

2,578

0

ꢅ,ꢁꢆꢇ

-ꢉꢅ3

ꢄꢅ3

ꢀ

Profit from continuing operations

Profit/loss from discontinued operations

Net profit

ꢁ,ꢀꢀꢄ

3ꢈꢆ

3,ꢀꢄꢇ

2,578

ꢄꢅ3

thereof attributable to non-controlling interests

thereof attributable to shareholders of Mercedes-Benz Group AG

thereof continuing operations

23,00ꢉ

10,ꢉ95

12,311

3,ꢇꢆ7

3,ꢇꢉꢇ

-ꢆꢄ

thereof discontinued operations

Earnings per share (in euros)

for profit attributable to shareholders of Mercedes-Benz Group AG

Basic

21.50

10.00

11.50

21.50

10.00

11.50

3.3ꢄ

3.ꢁꢆ

thereof continuing operations

thereof discontinued operations

Diluted

-ꢀ.ꢀ3

3.3ꢄ

thereof continuing operations

thereof discontinued operations

3.ꢁꢆ

-ꢀ.ꢀ3

6ꢃ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

B.ꢀꢈ

Mercedes-Benz

Group

Mercedes-Benz

Cars & Vans

Mercedes-Benz

Mobility

EBIT Mercedes-Benz Group

Reconciliation

2

021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

In millions of euros

Revenue

133,893

-103,218

30,ꢉ75

ꢅꢆꢅ,77ꢈ

-ꢅꢀꢅ,ꢉꢄꢆ

ꢆꢀ,ꢅꢈꢇ

109,ꢉ48

-83,713

25,935

-8,ꢉ32

-1,ꢉ57

ꢄꢈ,ꢉ7ꢇ

-ꢈꢅ,ꢅꢄꢁ

ꢅ7,3ꢈꢆ

-ꢈ,ꢉ3ꢄ

-ꢅ,ꢁꢉꢈ

27,941

-22,890

5,051

-ꢉ92

ꢆ7,ꢇꢄꢄ

-ꢆꢁ,ꢉꢇꢈ

3,ꢅ3ꢅ

-ꢇꢈ3

-3,ꢉ9ꢉ

3,385

-311

130

-ꢁ,ꢁꢄ7

ꢁ,ꢅ7ꢀ

-3ꢆ7

ꢆꢉꢇ

Cost of sales

Gross profit

Selling expenses

General administrative expenses

-9,194

-ꢈ,ꢄꢇꢇ

-2,808

-ꢆ,ꢉꢀ7

-900

-7ꢈꢆ

-251

-ꢆꢇ7

Research and non-capitalised

development costs

-5,4ꢉ7

2,822

-ꢁ,ꢈ3ꢄ

ꢆ,ꢆꢅ7

ꢇ,ꢀꢄꢅ

ꢉꢅꢆ

-5,433

3,413

13,ꢉ2ꢉ

0

-ꢁ,ꢈꢀꢈ

ꢆ,ꢉꢄꢉ

ꢉ,ꢅ7ꢆ

ꢀ

-

34

-

-ꢆ3ꢀ

ꢅ,ꢁ3ꢇ

ꢀ

-34

-ꢉ25

-3ꢅ

-ꢅꢁꢈ

-ꢉꢅ7

ꢉꢅꢆ

Other income/expense

EBIT from continuing operations

EBIT from discontinued operations

1ꢉ,028

13,041

3,493

0

-1,091

13,041

EBIT from continuing and

discontinued operations

29,0ꢉ9

ꢇ,ꢇꢀ3

13,ꢉ2ꢉ

ꢉ,ꢅ7ꢆ

3,493

ꢅ,ꢁ3ꢇ

11,950

-ꢉ

Revenue and EBIT by segment

relation to revenue increased from 1ꢂ.6% to 2ꢃ.ꢂ%. Func-

tional costs increased in 2021, mainly due to advance

expenditure for future technologies and vehicles. In the

previous year, the measures introduced as a conse-

quence of the covid-19 pandemic and adjustments to a

pension and healthcare plan in the United States led to

an improvement in the cost position. The increased

income from the equity-method investment in Beijing

Benz Automotive Co., Ltd. (BBAC) had a positive impact

on earnings. There were positive effects from the dis-

counting of non-current provisions in other financial

income/expense.

The revenue of the Mercedes-Benz Cars & Vans seg-

ment increased due to a significantly improved sales

structure by 11% to €109,648 million in 2021 (2020:

€98,5ꢂ6 million). The segment’s revenue was thus sig-

nificantly above the level of the previous year and met

the forecast for 2021.

EBIT amounted to €1ꢃ,626 million (2020: €5,1ꢂ2 million)

and adjusted EBIT amounted to €1ꢃ,914 million (2020:

€6,802 million). The adjusted return on sales of 12.ꢂ%

was significantly higher than the adjusted prior-year fig-

ure of 6.9% and thus exceeded the forecast of an

adjusted return on sales between 8% and 10% made in

the 2020 Management Report. This also exceeded the

changed forecast in the capital market reports of an

Restructuring expenses of €46ꢃ million (2020:

€1,4ꢂ6 million) had a negative impact on earnings. They

included personnel-cost optimisation programmes of

adjusted return on sales of 10% to 12% due to the strong €46ꢃ million (2020: €605 million). In the prior-year,

profitability.



B.10

expenses for the adjustment and realignment of capaci-

ties within the global production network of €8ꢂ1 million

were also included. Effects from ongoing governmental

and court proceedings and measures taken relating to

Mercedes-Benz diesel vehicles resulted in a negative

impact on earnings of €ꢃꢃꢃ million (2020: €154 million).

The M&A items include expenses in connection with the

change in the investment structure of the motorsport

business of €96 million. On the other hand, income of

A greatly improved sales structure, significantly

improved net pricing and a favourable product mix as

well as the positive development of the used-car busi-

ness had a very positive impact on gross profit. On the

other hand, there was a decline in unit sales, especially

in the second half of 2021, caused by the worldwide

shortage of semiconductor components. In addition,

higher raw-material prices and negative exchange-rate

effects reduced gross profit. Overall, gross profit in

64

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

€

604 million in connection with the establishment of

reconciliation in particular includes the profit from the

deconsolidation of the Daimler commercial vehicle

business including transaction costs.

the joint venture for fuel cells, cellcentric, resulted in a

positive contribution to earnings.

EBIT of the Mercedes-Benz Mobility segment

amounted to €ꢃ,49ꢃ million in 2021 (2020: €1,4ꢃ6 mil-

lion) and adjusted EBIT amounted to €ꢃ,449 million

Items at the corporate level resulted in earnings of

€11,940 million (2020: expenses of € 12ꢂ million).

(2020: €1,595 million). Adjusted return on equity of

The increase in earnings is due in particular to the profit

22.0% was above the adjusted prior-year figure of 10.9%. from the spin-off of €9,216 million (after transaction

The Mercedes-Benz Mobility segment thus exceeded

the forecast made in the 2020 Management Report for

costs).

2

021 of an adjusted return on sales of 12% to 1ꢃ%. It

In 2021 until the time of deconsolidation, the former

Daimler Trucks & Buses segment had revenue of

was even able to meet the forecast that was changed in

the course of the year in the context of the capital mar-

ket reports to an adjusted return on equity of 20% to

€ꢃ6,219 million (2020: €ꢃ4,6ꢂ1 million). The segment’s

revenue was thus slightly above the level of the previ-

ous year. In the 2020 Management Report, we had orig-

inally forecasted revenue to be significantly higher than

in the previous year. This forecast could not be met. The

former Daimler Trucks & Buses segment was able to

exceed the forecast that was changed in the course of

the year in the context of the capital market reports to

revenue at prior-year level. EBIT of the former Daimler

Trucks & Buses segment (including the continuing

scheduled depreciation and measurement of equi-

ty-method investments, excluding financial services and

in accordance with the recognition and measurement

principles described in the Notes to the Consolidated

Financial Statements) amounted to €2,486 million

2



2%. B.10

One of the main reasons for the positive development

of gross profit in relation to revenue in 2021 was primar-

ily lower credit-risk provisions, as the previous year’s

figure was impacted by cost adjustments in response to

the covid-19 pandemic. Further positive effects were

achieved due to lower refinancing costs, the improved

development of mobility and fleet services business,

and lower functional costs in connection with person-

nel-cost optimisation programmes of €45 million (2020:

€

6ꢂ million). Furthermore, positive effects on earnings

resulted from the reversal of a provision for legal dis-

putes and the sale of all shares in Via Transportation Inc. (2020: €525 million).

of €89 million. Another positive effect resulted from the

impairment of capitalised software development costs

in the previous year. On the other hand, the measures

introduced due to the covid-19 pandemic, including the

use of short-time work in Germany, led to an improve-

ment in the cost position in the previous year.

The disclosures for the equity-method loss of €1 million

of the new Daimler Truck Group including the spun-off

activities of the financial services business represent

the best possible estimate for the period between

10 December and ꢃ1 December 2021. See Note 14 of the

Notes to the Consolidated Financial Statements regard-

ing the equity-method measurement of the Daimler

Truck Group.

The reconciliation of the divisions’ EBIT to Group EBIT

comprises gains and/or losses at the corporate level

and the effects on earnings of eliminating intra-Group

transactions between the divisions.

Earnings for both years are reduced by impairments of

the carrying amount of the investment in BAIC Motor

(€120 million; 2020: €ꢃꢃ0 million).

Since the spin-off and hive-down of the Daimler com-

mercial vehicle business, both the operating results of

the former Daimler Trucks & Buses segment and the

results from the equity interest in Daimler Truck Hold-

ing AG have been shown in the reconciliation. The

65

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

The elimination of intra-Group transactions resulted in

The reconciliation from EBIT to adjusted EBIT is shown

earnings of €10 million in 2021 (2020: €122 million).



in table B.10.

B.ꢁꢀ

Mercedes-Benz

Group

Reconciliation EBIT to EBIT adjusted

Cars & Vans

Mobility

Reconciliation

2

021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

In millions of euros

EBIT from continuing and discontinued

operations

13,ꢉ2ꢉ

333

ꢉ,ꢅ7ꢆ

ꢅꢉꢁ

ꢅ,ꢁ7ꢇ

ꢀ

3,493

0

ꢅ,ꢁ3ꢇ

ꢀ

11,950

1

-ꢉ

ꢅꢀ

29,0ꢉ9

334

ꢇ,ꢇꢀ3

ꢅꢇꢁ

ꢅ,ꢈ7ꢁ

ꢀ

Legal proceedings (and related measures)

Restructuring measures¹

4ꢉ3

45

ꢅꢉꢄ

ꢀ

17ꢉ

ꢆ3ꢄ

ꢀ

ꢉ84

M&A transactions²

-508

-89

-10,2ꢉ0

-10,857

EBIT adjusted of continuing and

discontinued operations

13,914

ꢇ,ꢈꢀꢆ

3,449

ꢅ,ꢉꢄꢉ

1,8ꢉ7

ꢆꢁꢁ

19,230

ꢈ,ꢇꢁꢅ

Return on sales/return on equity (in %)

12.4

12.7

ꢉ.ꢆ

ꢇ.ꢄ

22.3

22.0

ꢄ.ꢈ

Return on sales/return on equity adjusted

ꢃ

(in %)

ꢅꢀ.ꢄ

1

Personnel-cost optimisation programmes are included in the reconciliation restructuring measures.

2

The M&A items in the reconciliation include the following topics: deconsolidation of the former Daimler Trucks & Buses segment and the Mercedes-Benz Mobility segment; discontinued

scheduled depreciation and equity-method measurement of non-current assets held for distribution or sale; founding of the fuel-cell joint venture cellcentric; costs associated with the

spin-off and hive-down and expenses from the measurement of the Mercedes-Benz Mobility disposal groups held for sale.

3

Adjusted return on sales is calculated as the ratio of adjusted EBIT to revenue. Adjusted return on equity is calculated as the ratio of adjusted EBIT to the adjusted equity of the quarters.

66

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Value added

As described in the section “Performance measurement

system” in chart B.02, value added is calculated as

At the Mercedes-Benz Mobility segment, value added

of €1.6 billion was significantly above the prior-year

level of minus €0.ꢃ billion. The segment’s return on



the difference between the measure of earnings and the equity amounted to 22.ꢃ% (2020: 9.8%). The growth of

cost of capital. The measure of earnings for the reporta-

ble segments is EBIT and for the Group is net operating

profit, which also includes earnings effects for which

the segments are not accountable or which are attribut-

able to the discontinued operations, such as income

taxes and other reconciliation items. The cost of capital

used in the calculation of value added is based on aver-

age net assets multiplied by the cost-of-capital rate.

value added primarily reflects the increase in earnings

of €2.1 billion. There was an opposing effect from the

increase in average total equity, which was higher by

€1.1 billion despite the deconsolidation of the financial

services business of the Daimler commercial vehicle

business.

B.ꢁꢁ

Table



B.11 shows value added for the Group and for

Value added

the individual segments. The reconciliation of the seg-

ments’ EBIT to net operating profit as well as the aver-

2021

ꢆꢀꢆꢀ

-ꢉꢄꢅ

ꢆꢅ/ꢆꢀ

In millions of euros

Change

age net assets are shown in tables

Table B.14 shows how net assets are derived from the

consolidated statement of financial position.

 

B.12 and B.13.



Mercedes-Benz Group

18,93ꢉ

+ꢅꢄ,ꢉꢆ7

Mercedes-Benz Cars & Vans

Mercedes-Benz Mobility

9,5ꢉꢉ

1,ꢉ34

ꢅ,ꢆ3ꢄ

-3ꢅꢇ

+ꢈ,3ꢆ7

+ꢅ,ꢄꢉꢀ

The Mercedes-Benz Group’s value added increased by

19.5 billion to €18.9 billion in 2021, representing a

€

return on net assets of 40.4% (2020: ꢂ.0%). This was

substantially higher than the Group’s required cost of

capital rate of 8%. The positive development of value

added was mainly due to the increase in the segments’

EBIT by €10.5 billion and in the reconciliation’s EBIT by

B.ꢁꢂ

Reconciliation to net operating profit

2021

ꢆꢀꢆꢀ

ꢆꢅ/ꢆꢀ

In millions of euros

Change

€11.8 billion, which primarily comprises the earnings

from discontinued operations before income taxes. In

addition, the decrease of €1.5 billion in average net

assets also positively impacted value added. This was

mainly attributable to the deconsolidation of the

Daimler commercial vehicle business and to lower aver-

age assets and liabilities from income taxes. An oppo-

site effect came from the increase in equity-method

investments due to the inclusion of our shareholding in

Daimler Truck Holding AG.

Mercedes-Benz Cars & Vans

Mercedes-Benz Mobility

EBIT of the segments

13,ꢉ2ꢉ

3,493

ꢉ,ꢅ7ꢆ

ꢅ,ꢁ3ꢇ

ꢇ,ꢇꢀꢈ

+ꢈ,ꢁꢉꢁ

+ꢆ,ꢀꢉ7

17,119

+ꢅꢀ,ꢉꢅꢅ

Profit/loss from discontinued

1

operations

12,401

-4,822

-1,090

7ꢆ

-ꢅ,ꢄꢇꢁ

-ꢉꢅ7

+ꢅꢆ,3ꢆꢄ

-ꢆ,ꢈꢉꢈ

-ꢉ73

_I_n_c_o_m_e_t_a_x_e_s2

_O_t_h_e_r_r_e_c_o_n_c_i_l_i_a_t_i_o_n2

Net operating profit

Mercedes-Benz Group

23,ꢉ08

ꢁ,ꢅꢄꢄ

+ꢅꢄ,ꢁꢀꢄ

At the Mercedes-Benz Cars & Vans segment, value

added of €9.6 billion was significantly higher than the

prior-year amount of €1.2 billion, primarily due to the

very positive earnings development. The increase of

1

2

Adjusted for after-tax interest income.

To the extent not allocated to Mercedes-Benz Mobility.

€1.1 billion in average net assets, which was mainly

caused by lower average provisions for other risks and

an increase in average equity-method investments,

which were partially offset by lower average inventories,

had only a slightly negative effect on value added.

6ꢂ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

B.ꢁꢃ

B.ꢁꢆ

Net assets (average)

Net assets of the Mercedes-Benz Group at year-end

2

021

ꢆꢀꢆꢀ

ꢆꢅ/ꢆꢀ

2021

ꢆꢀꢆꢀ

ꢆꢅ/ꢆꢀ

In millions of euros

% change

In millions of euros

% change

Mercedes-Benz Cars & Vans

Mercedes-Benz Mobility¹

33,835

15,ꢉ81

3ꢆ,7ꢇꢈ

ꢅꢁ,ꢇꢀꢅ

+3

+7

Net assets¹

Intangible assets

Property, plant and equipment

Leased assets

14,387

27,497

14,400

20,97ꢉ

ꢉ,875

ꢅꢉ,ꢇꢈꢇ

3ꢁ,ꢄꢀꢁ

ꢅ7,ꢄꢁꢄ

ꢆꢉ,ꢆꢄꢈ

ꢄ,ꢄꢆꢄ

-ꢈ

-ꢆꢅ

-ꢆꢀ

-ꢅ7

-3ꢅ

Net assets

of the segments

49,51ꢉ

7,ꢉ25

ꢁ7,3ꢇꢄ

ꢄ,ꢉꢅ3

+ꢁ

Daimler Trucks & Buses²

-ꢆꢀ

Inventories

Equity-method

investments³

Trade receivables

1,45ꢉ

ꢁꢇ3

+ꢆꢅꢁ

Less provisions

for other risks

Assets and liabilities from income

-15,097

-9,ꢉ70

-ꢅꢄ,3ꢄꢇ

-ꢅꢅ,ꢇꢀꢉ

-ꢆꢆ

-ꢅ7

4

taxes

131

ꢆ,ꢀꢈꢈ

ꢁ3ꢇ

-ꢄꢁ

Less trade payables

Other reconciliation⁴

-331

-

Less other assets

and liabilities

-14,393

-1,815

14,448

-33,ꢀꢄꢆ

ꢆ,ꢅꢅꢇ

-ꢉ7

-

Net assets

Mercedes-Benz Group

Assets and liabilities

from income taxes

58,397

ꢉꢄ,ꢈꢇꢄ

-ꢆ

1

Total equity.

Total equity

of Mercedes-Benz Mobility

2

Former Daimler Trucks & Buses segment. In the fourth quarter of 2021, no amounts have

been considered for the deconsolidated Daimler commercial vehicle business.

To the extent not allocated to the segments.

ꢅꢁ,3ꢅꢉ

+ꢅ

3

4

To the extent not allocated to Mercedes-Benz Mobility.

Mercedes-Benz Group

57,ꢉ08

ꢉꢇ,ꢅꢀꢁ

+3

1

To the extent not allocated to Mercedes-Benz Mobility.

68

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Liquidity and capital resources

Cash management centrally determines the cash

requirements and surpluses. By means of cash-pooling

procedures, liquidity is centrally concentrated on bank

accounts of the Mercedes-Benz Group in various cur-

rencies. Most of the payments between Group compa-

nies are made through internal clearing accounts so that

the number of external cash flows is reduced to a mini-

mum. The Mercedes-Benz Group has established stand-

ardised processes and systems to manage its bank

accounts and internal cash-clearing accounts, and to

execute automated payment transactions.

Principles and objectives of financial management

Financial management at the Mercedes-Benz Group

consists of capital structure management, cash and

liquidity management, market-price risk management

(foreign exchange rates and interest rates), as well as

pension-asset management and credit and country risk

management. Worldwide financial management is per-

formed within the framework of legal requirements con-

sistently for all Group entities by the Treasury depart-

ment of the Mercedes-Benz Group. Financial

management operates within a framework of guidelines,

limits and benchmarks, and on the operational level is

organisationally separate from other functions such as

settlement, financial controlling, reporting and account-

ing.

Management of market-price risks aims to minimise

the impact of fluctuations in foreign exchange rates and

interest rates on the earnings of the divisions and the

Group. The Group’s overall exposure to these mar-

ket-price risks is determined to provide a basis for

hedging decisions, which include the definition of hedg-

ing volumes and corresponding periods, as well as the

selection of hedging instruments. The hedging strategy

is specified at Group level and uniformly implemented

in the segments. Decisions regarding the management

of risks resulting from fluctuations in foreign exchange

rates, as well as decisions on asset/liability manage-

ment (liquidity and interest rates), are regularly made by

the relevant internal committees and the superordinate

Treasury Risk Management Committee.

Capital structure management designs the capital

structure of the Mercedes-Benz Group and its subsidi-

aries. Decisions regarding the capitalisation of the

Group’s mobility, production, sales or financing compa-

nies are based on the principles of cost-optimised and

risk-optimised liquidity and capital resources.

The purpose of liquidity management is to enable the

Group to meet its payment obligations at any time. For

this purpose, the Group records the cash flows from

operating and financial activities in a rolling plan. The

resulting financial requirements are covered by the use

of appropriate instruments for liquidity management

Management of pension assets (plan assets) includes

the investment of the assets to cover the corresponding

pension obligations. The plan assets are legally sepa-

rated from the Group’s assets and are invested primarily

in funds; they are not available for general business

purposes. The plan assets are spread across various

investment categories such as equities, fixed-interest

securities, alternative investments and real estate,

depending on the expected development of pension

obligations and with the help of risk-return optimisation.

The performance of asset management is measured by

comparison with defined reference indices. The invest-

ment risks are limited via a Group-wide guideline. In

addition, there are local regulations for risk manage-

ment for the individual plan assets. Additional informa-

tion on pension plans and similar obligations is pro-

vided in Note 23 of the Notes to the Consolidated

Financial Statements.

(e.g. bank credit, commercial paper and notes); liquidity

surpluses are invested in the money market or the capi-

tal market taking into account risk and return expecta-

tions. Our goal is to ensure the level of liquidity

regarded as necessary at optimal costs. Besides opera-

tional liquidity, the Mercedes-Benz Group maintains

additional liquidity reserves which are available in the

short term. Those additional financial resources include

a pool of receivables from the financial services busi-

ness which are available for securitisation in the capital

market and a contractually confirmed syndicated credit

facility. As of December 2021, the Group also has liquid-

ity reserves in the form of its shareholding in Daimler

Truck Holding AG, which can be sold if the need arises

after a twelve month hard lockup period agreed in con-

text of the spin-off and hive-down of the Daimler com-

mercial vehicles business.

69

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

The risk volume that is subject to credit risk

Further information on the management of market-price

risk, credit risk and liquidity risk is provided in Note 34

of the Notes to the Consolidated Financial Statements.

management includes all of the Mercedes-Benz

Group’s worldwide creditor positions with financial

institutions, issuers of securities, and customers in the

financial services business and the automotive busi-

ness. Credit risks with financial institutions and issuers

of securities arise primarily from investments executed

as part of our liquidity management and from the appli-

cation of derivative financial instruments. The manage-

ment of these credit risks is mainly based on an internal

limit system that reflects the creditworthiness of the

respective financial institution or issuer. The credit risk

with customers of our automotive business results from

relationships with contracted dealerships and general

agencies, other corporate customers and retail custom-

ers. In connection with the export business, general

agencies that according to our creditworthiness analy-

ses are not sufficiently creditworthy are generally

required to provide collaterals such as first-class bank

guarantees. The credit risk with end-customers in the

financial services business is managed by Mercedes-

Benz Mobility on the basis of a standardised risk-man-

agement process. In this process, minimum require-

ments are defined for the sales-financing and leasing

business and standards are set for credit processes, as

well as for the identification, measurement and man-

agement of risks. Key elements for the management of

credit risks are appropriate creditworthiness assess-

ments supported by statistical risk-classification meth-

ods, as well as structured portfolio analysis and portfo-

lio monitoring.

Cash flows from continuing and discontinued

operations

The Group’s statement of cash flows, as well as the free

cash flow of the industrial business, shows the sum of

continuing and discontinued operations. Discontinued

operations include the cash flows of the spun-off and

hived-down companies until completion of the spin-off

on 9 December 2021.

Cash provided by operating activities of continuing

and discontinued operations



B.15 amounted to

€24.5 billion in 2021 (2020: €22.ꢃ billion). Compared to

the prior year, which was strongly affected by the world-

wide consequences of the covid-19 pandemic, 2021

showed a significant improvement in the overall busi-

ness performance. Additional positive effects arose

from the leasing and sales-financing business.

Negative effects resulted from the development of

working capital, particularly due to the increase in

inventory levels as a result of shortages of semiconduc-

tor components. Furthermore, income taxes paid

increased in comparison to the previous year, due to the

substantial improvement in the overall business perfor-

mance in 2021.

Additional opposing effects resulted from payments of

€0.9 billion made in March 2021 resulting from the set-

tlement in the previous year of civil and environmental

claims made by several US authorities in connection

with emission-control systems used in certain diesel

vehicles. During the reporting period, payments were

Financial country risk management includes various

aspects: the risk from investments in subsidiaries and

joint ventures, the risk from the cross-border financing

of Group companies in risk countries, and the risk from

direct sales to customers in those countries. The

Mercedes-Benz Group has an internal rating system that made as part of the personnel-cost-optimisation pro-

assigns all countries in which it operates to risk catego-

ries. Risks from cross-border receivables are partially

protected with the use of letters of credit and bank

guarantees in favour of Mercedes-Benz Group AG and

other Group companies. In addition, an internal com-

mittee sets and restricts the level of hard-currency

credits granted to Mercedes-Benz Mobility companies

in risk countries.

gramme resulting from the agreed measures to reduce

costs and the number of employees in a socially accept-

able manner. In contrast, the cash flow in the prior year

was adversely affected by payments made in the con-

text of reviewing and prioritising the product portfolio

for the planned discontinuation of X-Class production

during the first quarter of 2020.

ꢂ0

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Included in other non-cash expense and income is

Cash used for financing activities from continuing

and discontinued operations B.15 amounted to a

mainly the result of the deconsolidation of the spin-off

and hive-down of the Daimler commercial vehicle busi-

ness (€9.2 billion).



cash outflow of €19.1 billion (2020: €10.ꢂ billion). The

increase compared to the previous year is primarily due

to the lower net-increase in financing liabilities due to

the positive liquidity situation and the higher dividend

payment made to the shareholders of Mercedes-Benz

Group AG in comparison to the previous year. Cash and

cash equivalents increased by €0.1 billion compared

with ꢃ1 December 2020, after taking currency-transla-

tion effects into account. Total liquidity, which also

includes marketable debt securities and similar invest-

ments, increased by €1.ꢃ billion to €ꢃ0.8 billion.

Cash used for investing activities from continuing

and discontinued operations



B.15 amounted to

€6.2 billion (2020: €6.4 billion). The decrease in cash

outflow resulted in particular from the cash inflow from

repayments of loans from the Daimler Truck Group after

the spin-off and hive-down, for financing the purchases

of the Financial Services business associated with the

Daimler commercial vehicle business (€6.9 billion). Fur-

ther positive effects resulted from decreased invest-

ments in property, plant and equipment and intangible

assets, as well as from a cash inflow of €0.6 billion in

connection with the partial sale of shares in cellcentric

to the Volvo Group. The sale proceeds, which were

received in March 2021, have been divided between the

Mercedes-Benz Cars & Vans segment and the former

Daimler Trucks & Buses segment. On the other hand,

cash outflows resulted from the spin-off and hive-down

of the Daimler commercial vehicle business (€5.5 bil-

lion), as well as from higher investments in marketable

debt securities and similar investments.

ꢂ1

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

B.ꢁꢅ

Mercedes-Benz

Mobility

Condensed statement of cash flows¹

Mercedes-Benz Group

Industrial Business

2

021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

In millions of euros

Cash and cash equivalents at beginning of period

Profit before income taxes of continuing and discontinued operations

Depreciation and amortisation/impairments

23,048

28,775

ꢉ,980

ꢅꢈ,ꢈꢈ3

ꢇ,33ꢄ

ꢈ,ꢄꢉ7

20,344

25,290

ꢉ,837

ꢅꢇ,ꢅꢉꢆ

ꢁ,ꢄꢅ3

ꢈ,ꢇꢉ3

2,704

3,485

143

ꢆ,73ꢅ

ꢅ,ꢁꢆꢇ

3ꢀꢁ

Other non-cash expense and income and

gains/losses on disposals of assets

-12,198

-7ꢀꢉ

-12,315

-ꢅ,ꢅꢁ7

117

ꢁꢁꢆ

Change in operating assets and liabilities

Inventories

-2,5ꢉ1

120

ꢆ,ꢀ3ꢄ

ꢅ,33ꢄ

-ꢆꢄꢄ

-3,0ꢉ7

245

ꢅ,ꢄꢁꢅ

ꢄꢀꢅ

50ꢉ

-125

123

ꢄꢈ

ꢁ3ꢈ

Trade receivables

Trade payables

1,574

3,879

1,428

-1,2ꢉ1

1,451

-50

-ꢆꢈꢉ

-ꢁꢅ

-ꢅꢁ

Receivables from financial services

Vehicles on operating leases

Other operating assets and liabilities

ꢆ,3ꢄ7

ꢅ,ꢈꢆꢆ

ꢇꢉ3

3,929

3,043

-714

ꢆ,ꢁ3ꢈ

ꢅ,ꢄꢁꢁ

-ꢉ7ꢁ

-1,ꢉ15

-547

-ꢅꢆꢆ

ꢅ,ꢆꢆ7

Dividends received

from equity-method investments

1,ꢉ25

-3,812

24,549

ꢅ,7ꢈ3

-ꢅ,ꢄꢄ3

ꢆꢆ,33ꢆ

1,ꢉ25

-2,3ꢉ1

15,493

ꢅ,7ꢈꢆ

-ꢈꢀꢇ

-

-1,451

9,05ꢉ

ꢅ

-ꢅ,ꢅꢈ7

ꢉ,3ꢅꢇ

Income taxes paid

Cash provided by operating activities

ꢅ7,ꢀꢅꢇ

Additions to property, plant and equipment and

intangible assets

-7,320

220

-ꢈ,ꢉꢇꢀ

-ꢁꢀꢆ

-7,181

-34

-ꢈ,ꢁ7ꢆ

-ꢁꢀꢁ

-139

254

-ꢈꢈ

ꢆ

Investments in and disposals of shareholdings

Acquisitions and sales of marketable debt securities

and similar investments

-1,309

ꢉ,853

ꢆ,ꢅꢁꢄ

-1,245

ꢉ,853

ꢅ,ꢄꢆꢄ

-ꢉ4

ꢆꢆꢀ

Repayment of financing of Daimler’s commercial vehicles business

-

Cash and cash equivalents disposed of from the deconsolidation of

Daimler’s commercial vehicles business

-5,489

819

-

3ꢄꢆ

-5,254

802

-

33ꢈ

-235

17

-

ꢉꢁ

Other cash inflows

Cash used for/provided by investing activities

Change in financing liabilities

-ꢉ,22ꢉ

-17,200

-1,810

-49

-ꢇ,ꢁꢆꢅ

-ꢄ,ꢉꢀ3

-ꢅ,ꢆꢁꢉ

ꢅ

-ꢉ,059

-13,455

-1,775

-49

-ꢇ,ꢇꢀꢄ

-ꢅꢆ,ꢀꢁꢉ

-ꢅ,ꢆ3ꢅ

-ꢅꢆ

-1ꢉ7

-3,745

-35

ꢅꢈꢈ

ꢆ,ꢉꢁꢆ

-ꢅꢁ

Dividends paid

Other transactions with shareholders

Internal equity and financing transactions

Cash used for financing activities

-

ꢅ3

-

2,74ꢉ

-12,533

7,ꢄꢇꢇ

-ꢉ,3ꢆꢆ

-2,74ꢉ

-ꢉ,52ꢉ

-7,ꢄꢇꢇ

-ꢉ,ꢁꢆꢉ

-19,059

-ꢅꢀ,7ꢁ7

Effect of foreign exchange-rate changes on cash

and cash equivalents

870

-ꢄꢄꢄ

789

-ꢈꢄ3

81

-ꢅꢀꢇ

Cash and cash equivalents at end of period

23,182

ꢆ3,ꢀꢁꢈ

18,034

ꢆꢀ,3ꢁꢁ

5,148

ꢆ,7ꢀꢁ

thereof cash and cash equivalents classified as assets held for sale at

end of period

ꢉ2

ꢀ

0

ꢀ

ꢉ2

ꢀ

1

In the consolidated statement of cash flows, the consolidated cash flows from continuing and discontinued operations are presented. The cash flows from continuing and discontinued

operations are shown in Note 3 to the Consolidated Financial Statements. A reconciliation from continuing and discontinued operations to profit/loss before income taxes is also

included in Note 3 to the consolidated financial statements.

ꢂ2

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

The parameter used by Mercedes-Benz Group AG to

B.ꢁ6

measure the financial capability of the industrial busi-

ness is the free cash flow of the industrial business

Free cash flow of the industrial business from continuing and

discontinued operations

2

021

ꢆꢀꢆꢀ

ꢆꢅ/ꢆꢀ



B.16, which is derived from the reported cash flows

In millions of euros

Change

from operating and investing activities. The cash flows

from sales and purchases of marketable debt securities

and similar investments included in cash flows from

investing activities are deducted, as those securities are

allocated to liquidity and changes in them are thus not a

part of the free cash flow of the industrial business. On

the other hand, effects in connection with the recogni-

tion and measurement of right-of-use assets, which

result from lessee accounting and are largely non-cash

items, are included in the free cash flow of the industrial

business.

Cash provided by

operating activities

15,493

-ꢉ,059

ꢅ7,ꢀꢅꢇ

-ꢇ,ꢇꢀꢄ

-ꢅ,ꢉꢆ3

+ꢉꢉꢀ

Cash used for

investing activities

Change in marketable

debt securities and

similar investments

1,245

-495

-ꢅ,ꢄꢆꢄ

-3ꢉꢅ

+3,ꢅ7ꢁ

-ꢅꢁꢁ

Right-of-use assets

Repayment of financing of

Daimler’s commercial vehicles

business

-ꢉ,853

-

-ꢇ,ꢈꢉ3

Cash and cash equivalents dis-

posed of in the deconsolidation of

Daimler’s commercial vehicles

business

Other adjustments relate to effects from the financing

of the Group’s own dealerships and effects from depos-

its within the Group. In addition, the calculation of the

free cash flow includes the cash flows to be shown

under cash used for financing activities in connection

with the acquisition or disposal of shares in subsidiaries

without loss of control.

5,254

21

-

+ꢉ,ꢆꢉꢁ

-ꢅꢅꢅ

Other adjustments

ꢅ3ꢆ

Free cash flow of the

industrial business

8,ꢉ0ꢉ

ꢈ,ꢆꢉꢄ

+3ꢁ7

Legal proceedings (and related

measures)

1,ꢉꢉ1

754

ꢉꢄꢉ

3ꢀꢅ

-

+ꢅ,ꢀꢇꢇ

+ꢁꢉ3

-ꢅ3ꢄ

Restructuring measures

M&A transactions

-139

Free cash flow of the industrial

business adjusted

10,882

ꢄ,ꢅꢉꢉ

+ꢅ,7ꢆ7

ꢂꢃ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

The free cash flow of the industrial business from

continuing and discontinued operations amounted to

8.6 billion in 2021 and as such was at the prior-year

In the interest of greater transparency in reporting on

the ongoing business an adjusted free cash flow of

the industrial business from continuing and

€

level of €8.ꢃ billion. The free cash flow of the industrial

business was thus above the forecast of significantly

below the prior-year level as made in the Outlook sec-

tion of the 2020 Annual Report, as well as the forecast



discontinued operations B.16 is also calculated and

reported. The adjustments for legal proceedings include

payments by the automotive segments in connection

with ongoing governmental and legal proceedings and

of slightly below the prior-year level as made in the Out- related measures taken with regard to Mercedes-Benz

look section of the quarterly report as of ꢃ0 September

021.

diesel vehicles. This relates in particular to payments

made in March 2021. The adjustments for restructuring

measures include payments made in connection with

the personnel-cost-optimisation programme in the

2

The slight increase of €0.ꢃ billion to €8.6 billion in the

free cash flow of the industrial business was particularly reporting period and for the product-portfolio review

affected by a significant improvement in the overall and prioritisation in the prior year. The adjustments for

business performance compared with the previous year, M&A transactions comprise payments received from the

which was greatly impacted by the worldwide conse-

quences of the covid-19 pandemic. Furthermore, the

decreased investments in property, plant and equip-

ment and intangible assets, as well as from the cash

inflow of €0.6 billion in connection with the partial sale

of shares in cellcentric to the Volvo Group, had a posi-

tive effect on the free cash flow of the industrial busi-

Volvo Group for the partial sale of shares in cellcentric

and payments made for the purchase of the British

electric motors specialist YASA Limited. The adjusted

free cash flow of the industrial business led to a cash

inflow of €10.9 billion (2020: €9.2 billion).

In 2021, the free cash flow from continuing and

ness. Negative effects resulted from the development of discontinued operations of the Mercedes-Benz

working capital, particularly due to the increase in

inventory levels as a result of shortages of semiconduc-

tor components. Furthermore, income taxes paid

increased in comparison to the prior year, due to the

substantial improvement in the overall business perfor-

mance. Additional negative effects resulted from pay-

ments made in March 2021 of €0.9 billion resulting from

the settlement in the previous year of civil and environ-

mental claims made by several US authorities in con-

nection with emission-control systems used in certain

diesel vehicles, and other related payments. During the

reporting period, payments were made as part of the

personnel-cost-optimisation programme resulting from

the agreed measures to reduce costs and the number of

employees in a socially acceptable manner. The free

cash flow of the industrial business in the previous year

was adversely affected by payments made in the con-

text of reviewing and prioritising the product portfolio

for the planned discontinuation of X-Class production

during the first quarter of 2020.

Group resulted in a cash inflow of €1ꢂ.6 billion (2020:

€1ꢃ.4 billion). Besides the effects of the free cash flow

of the industrial business, the free cash flow of the

Mercedes-Benz Group is mainly affected by the leasing

and sales-financing business of Mercedes-Benz Mobility.

As well as being calculated on the basis of the disclosed

cash flows from operating and investing activities, the

free cash flow of the industrial business can also be

calculated on the basis of the cash flows before interest

and taxes (CFBIT) of the automotive segment. The rec-

onciliation from the CFBIT of Mercedes-Benz Cars &

Vans to the free cash flow of the industrial business also

includes payments of interest and taxes for the

Mercedes-Benz Cars & Vans segment. The other recon-

ciliation items include, in addition to the items attribut-

able to the industrial business but for which Mercedes-

Benz Cars & Vans is not responsible, in particular the

free cash flow of the former Daimler Trucks & Buses

segment. Table



B.17 shows the reconciliation of the

CFBIT of Mercedes-Benz Cars & Vans to the free cash

flow of the industrial business.

ꢂ4

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

The CFBIT of the automotive segment is derived from

EBIT and the change in net assets, and also includes

additions to right-of-use assets. Table B.18 shows the

composition of CFBIT for Mercedes-Benz Cars & Vans.

The line “Other” mainly comprises payments made in

the reporting period for liabilities and provisions recog-

nised in the previous years in connection with legal pro-

ceedings, as well as personnel and value-added-tax

matters, and the elimination of the profit and loss effect

included in EBIT from the sale of cellcentric.

B.ꢁꢇ

Reconciliation from CFBIT to the free cash flow of the industrial busi-

ness from continuing and discontinued operations



2

021

ꢆꢀꢆꢀ

In millions of euros

CFBIT Mercedes-Benz Cars & Vans

Income taxes paid/refunded

Interest paid/received

10,170

-1,870

-1ꢉ4

7,ꢀꢁꢈ

-ꢁꢀꢅ

ꢄ3

Other reconciling items

470

ꢅ,ꢉꢅꢄ

ꢈ,ꢆꢉꢄ

Free cash flow of the industrial business

8,ꢉ0ꢉ

Table



B.19 shows the reconciliation from CFBIT to

adjusted CFBIT and the adjusted cash conversion

rate. The adjusted cash conversion rate for Mercedes-

Benz Cars & Vans of 0.9 was in line with the adjusted

cash conversion rate of 0.ꢂ to 0.9 forecasted in the Man-

agement Report as of ꢃ1 December 2020 and within the

slightly changed forecast of ꢃ0 September 2021, of

between 0.8 and 1.0.

B.ꢁꢄ

CFBIT

Mercedes-Benz

Cars & Vans

2021

ꢆꢀꢆꢀ

In millions of euros

For the year 2021 the free cash flow of the industrial

business from continuing operations amounted to

EBIT

13,ꢉ2ꢉ

-ꢉ98

ꢉ,ꢅ7ꢆ

ꢅ,ꢉꢇꢀ

-3ꢀꢅ

Change in working capital

Net financial investments

€ꢂ.9 billion. It was calculated based on the CFBIT of

-118

Mercedes-Benz Cars & Vans and payments of interest

and taxes related to this segment, as well as other rec-

onciling items that are allocated to the industrial busi-

ness but for which the Mercedes-Benz Cars & Vans seg-

ment is not responsible.

Net investments in property, plant and

equipment and intangible assets

-ꢉ,095

ꢉ,17ꢉ

-7,ꢉꢇ7

7,3ꢀ3

ꢈꢈꢅ

Depreciation and amortisation/impairments

Other

-2,721

10,170

CFBIT

7,ꢀꢁꢈ

ꢂ5

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

B.ꢁꢈ

B.ꢂꢀ

Reconciliation to CFBIT adjusted

Net liquidity of the industrial business

Mercedes-Benz

Cars & Vans

31 Dec.

2021

3ꢅ Dec.

ꢆꢀꢆꢀ

ꢆꢅ/ꢆꢀ

In millions of euros

Change

2

021

ꢆꢀꢆꢀ

In millions of euros

Cash and cash equivalents

18,034

ꢆꢀ,3ꢁꢁ

-ꢆ,3ꢅꢀ

Marketable debt securities

and similar investments

CFBIT

10,170

1,ꢉ58

557

7,ꢀꢁꢈ

ꢉꢇꢈ

3ꢀꢅ

-

ꢉ,591

24,ꢉ25

-3,877

ꢉ,ꢁꢇꢈ

ꢆꢉ,ꢈꢅꢆ

-ꢄ,ꢅꢇꢈ

+ꢅ,ꢅꢆ3

-ꢅ,ꢅꢈ7

+ꢉ,ꢆꢄꢅ

Legal proceedings (and related measures)

Restructuring measures

M&A transactions

Liquidity

Financing liabilities

-90

Liabilities from refinancing

internal dealerships

CFBIT adjusted

12,295

7,ꢄꢅ7

-3ꢉ

-

-3ꢇ

Market valuation and

currency hedges

for financing liabilities

EBIT adjusted

13,914

0.9

ꢇ,ꢈꢀꢆ

ꢅ.ꢆ

293

ꢅ,ꢆꢅꢅ

-ꢄꢅꢈ

Adjusted cash conversion rate ^ꢁ

Financing liabilities

(nominal)

-3,ꢉ20

21,005

-7,ꢄꢉ7

ꢅ7,ꢈꢉꢉ

+ꢁ,337

+3,ꢅꢉꢀ

1

Adjusted cash conversion rate is the ratio of adjusted CFBIT to adjusted EBIT.

Net liquidity

The net liquidity of the industrial business



B.20 is

calculated as the total amount as shown in the state-

ment of financial position of cash, cash equivalents and

marketable debt securities and similar investments

included in liquidity management, less the curren-

cy-hedged nominal amounts of financing liabilities.

Compared with ꢃ1 December 2020, the net liquidity of

the industrial business increased by €ꢃ.2 billion

to €21.0 billion. The increase is mainly due to the posi-

tive free cash flow of the industrial business and posi-

tive exchange-rate effects, which were partially offset

by the dividend payment made to the shareholders of

Mercedes-Benz Group AG and by the disposal of net

liquidity of the industrial business of Daimler’s commer-

cial vehicle business in the amount of €5.9 billion.

To the extent that the Group’s internal refinancing of the

financial services business is provided by the compa-

nies of the industrial business, this amount is deducted

in the calculation of the net debt of the industrial busi-

ness.

Net debt at Group level, which primarily results from

refinancing the leasing and sales-financing business,

decreased compared with ꢃ1 December 2020 as a result

of the spin-off and hive-down of the Daimler commer-

cial vehicle business, by €20.4 billion to €94.8 billion.



B.21

ꢂ6

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

B.ꢂꢁ

Refinancing

Net debt of the Mercedes-Benz Group

The funds raised by the Mercedes-Benz Group in the

3

1 Dec.

021

3ꢅ Dec.

ꢆꢀꢆꢀ

year 2021 primarily served to refinance the leasing and

sales-financing business. For that purpose, the

2

ꢆꢅ/ꢆꢀ

In millions of euros

Change

Mercedes-Benz Group made use of a broad spectrum of

various financing instruments in various currencies and

markets. They include bank loans, commercial paper in

the money market, bonds with medium and long maturi-

ties, promissory-note loans, customer deposits at

Mercedes-Benz Bank, and the securitisation of receiva-

bles from customers in the financial services business

Cash and cash equivalents

23,182

ꢆ3,ꢀꢁꢈ

+ꢅ3ꢁ

Marketable debt securities

and similar investments

7,579

ꢇ,3ꢄ7

ꢆꢄ,ꢁꢁꢉ

+ꢅ,ꢅꢈꢆ

+ꢅ,3ꢅꢇ

Liquidity

30,7ꢉ1

Financing liabilities

-125,905

-ꢅꢁꢉ,ꢈꢁꢆ

+ꢅꢄ,ꢄ37

Market valuation and

currency hedges

(asset-backed securities).

for financing liabilities

327

ꢅ,ꢆꢆꢁ

-ꢈꢄ7

Various issuance programmes are available for raising

longer-term funds in the capital market. They include

the Euro Medium Term Note programme (EMTN) with a

total volume of €ꢂ0 billion, under which Mercedes-Benz

Group AG and several subsidiaries can issue bonds in

various currencies. Other local capital-market pro-

grammes exist, which are significantly smaller than the

EMTN programme Capital-market programmes allow

flexible, repeated access to the capital markets.

Financing liabilities

(nominal)

-125,578

-94,817

-ꢅꢁꢁ,ꢇꢅꢈ

-ꢅꢅꢉ,ꢅ73

+ꢅꢄ,ꢀꢁꢀ

+ꢆꢀ,3ꢉꢇ

Net debt

Contingent liabilities and other financial obligations

At ꢃ1 December 2021, the best estimate for potential

obligations from contingent liabilities is €2.ꢂ billion

(2020: €2.8 billion).

The situation in the bond markets was significantly influ-

enced by the covid-19 pandemic in the reporting year.

The supporting measures taken by governments and

central banks in connection with partly strong economic

growth meant that risk premiums for companies with an

investment-grade rating remained at a moderate level

during the year.

In 2019, Mercedes-Benz Group AG hived down assets

and liabilities of the Mercedes-Benz Cars & Vans seg-

ment into Mercedes-Benz AG and of the Daimler Trucks

&

Buses segment into Daimler Truck AG. The spin-off

and hive-down of the Daimler commercial vehicle busi-

ness results in a subsequent liability relationship out-

side the Group pursuant to Section 1ꢃꢃ Subsections 1

and ꢃ of the German Transformation Act (UmwG).

In the context of its ordinary business operations, the

Group has also entered into other financial

obligations in addition to the liabilities shown in the

consolidated statement of financial position at

ꢃ1 December 2021. These financial obligations result

from contractual commitments to acquire intangible

assets, property, plant and equipment, and leased prop-

erty, as well as irrevocable loan commitments.

Detailed information on contingent liabilities and other

financial obligations is provided in Note 32 of the Notes

to the Consolidated Financial Statements.

ꢂꢂ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

In the reporting period, the Group covered its refinanc-

euros, 2ꢃ% in US dollars, 1ꢃ% in Chinese renminbi, ꢃ%

in British pounds, ꢃ% in Canadian dollars and 2% in Jap-

anese yen.

ing requirements mainly through the issuance of bonds.

They include a so-called benchmark issuance (a bond

with a high nominal volume) by Daimler Finance North

America LLC in the US-dollar area and another by

Mercedes-Benz Group AG in the form of a “green bond”

in the Euro market. Further information on the “green

bond” can be found in the section “Sustainability at the

At ꢃ1 December 2021, the total of financing liabilities

shown in the consolidated statement of financial posi-

tion amounted to €125.8 billion (2020: €145.8 billion).

Mercedes-Benz Group.”



B.22

Detailed information on the amounts and terms of the

main items of financing liabilities is provided in Notes

25 and 34 of the Notes to the Consolidated Financial

Statements. Note 34 also provides information on the

maturities of the other financial liabilities.

In the Chinese market, Daimler International Finance

B.V. placed three so-called panda bonds with a total

volume of CNY 12.0 billion. In addition, a large number

of smaller bonds were issued in various currencies and

markets.

B.ꢂꢂ

The Mercedes-Benz Group also issued small volumes of

Benchmark issuances

commercial paper in 2021.

Month of

Issuer

Volume

USDꢅ,ꢉꢀꢀ million

USDꢅ,ꢀꢀꢀ million

USDꢉꢀꢀ million

€ꢅ,ꢀꢀꢀ million

issuance

Mar. ꢆꢀꢆꢅ

Maturity

Mar. ꢆꢀꢆꢁ

Mar. ꢆꢀꢆꢇ

Mar. ꢆꢀ3ꢅ

Mar. ꢆꢀ33

Daimler Finance

North America LLC

In the reporting year, asset-backed securities (ABS)

were issued in nine countries worldwide. In the United

States, a total refinancing volume of USD 8.2 billion was

generated in five transactions. In addition, one ABS

bond with a refinancing volume of €0.ꢂ billion was

issued in Germany. Furthermore, four ABS transactions

with a total volume of CNY 24.9 billion were placed in

China. ABS transactions were also successfully placed

with investors in Canada, Australia, the United Kingdom,

Japan, Italy and the Netherlands.

Daimler Finance

North America LLC

Daimler Finance

North America LLC

Mercedes-Benz

Group AG

B.ꢂꢃ

Refinancing instruments

Bank credit was another important source of refinanc-

ing in 2021. Loans were provided by globally active

banks as well as by banks operating nationally. The

lenders also included supranational banks such as the

European Investment Bank.

Average interest rates

Carrying amounts

3

1 Dec.

021

3ꢅ Dec.

ꢆꢀꢆꢀ

31 Dec.

2021

3ꢅ Dec.

ꢆꢀꢆꢀ

2

in %

In millions of euros

Notes/bonds and

liabilities from

ABS transactions

1.5ꢉ

ꢅ.ꢇꢀ

84,7ꢉ9

ꢄ3,ꢆ3ꢀ

Since July 2018, the Mercedes-Benz Group has had at its

disposal a syndicated credit facility with a volume of

Liabilities

to financial

institutions

€11 billion from a consortium of international banks. Fol-

2.54

0.25

ꢆ.ꢆꢉ

ꢀ.ꢁꢀ

23,997

13,591

3ꢆ,3ꢄꢅ

ꢅꢁ,ꢉꢅꢇ

lowing the exercise of an extension option of one further

year, it grants the Mercedes-Benz Group additional

financial flexibility until 2025. The Mercedes-Benz

Group does not currently intend to utilise this credit line.

Deposits in the direct

banking business

The carrying amounts of the main refinancing instru-

ments and the weighted average interest rates are

shown in table



B.23. At ꢃ1 December 2021, they are

mainly denominated in the following currencies: 48% in

ꢂ8

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Credit ratings

On 2ꢂ July 2021, S&P Global Ratings (S&P) raised its

long-term rating for Mercedes-Benz Group AG from

BBB+ to A- with a stable outlook. Its short-term rating

remained unchanged at A-2. S&P justified these meas-

ures primarily with the better-than-expected free cash

flow and the good earnings development. S&P assumes

that an accelerated transition to electric vehicles at

Mercedes-Benz Cars can strengthen the market position

over time.

The credit ratings of Mercedes-Benz Group AG changed

in 2021 with three of the agencies we have engaged to

provide ratings. S&P Global Ratings, Fitch Ratings and

DBRS all raised their long-term ratings by one notch. At

the same time, DBRS improved its short-term rating by

one notch. The long-term and short-term credit ratings

for Mercedes-Benz Group AG and its finance companies

provided by Moody’s Investors Service and Scope Rat-

ings remained unchanged in 2021. At the end of the year,

Moody’s changed its long-term credit rating from “sta-

ble” to “positive”. Mercedes-Benz Group AG thus had

solid “A” rating with all five agencies at the end of the

On 5 November 2021, Fitch Ratings (Fitch) upgraded its

long-term issuer default rating for Mercedes-Benz

Group AG from BBB+ to A- with a stable outlook. Its

short-term rating remained unchanged at F1. Fitch

stated that the upgrade reflects the Group’s rapidly

improving profitability and the expectation that it will

strengthen sustainably. Fitch also anticipates a struc-

tural improvement in the free cash flow.

year 2021.



B.24

B.ꢂꢆ

Credit ratings

End of 2021 End of ꢆꢀꢆꢀ

The Canadian agency DBRS upgraded its long-term rat-

ing for Mercedes-Benz Group AG and its rated subsidi-

aries from BBB (high) to A (low) with a stable outlook on

Long-term credit rating

S&P

A-

A3

A-

A

BBB+

A3

1

8 November 2021. At the same time, DBRS lifted its

Moody’s

Fitch

short-term rating from R-2 (high) to R-1 (low). DBRS jus-

tified this change with the improved assessment of

business risk resulting from the spin-off of a majority

stake in Daimler Truck. Furthermore, the assessment of

the Group’s financial risk has also improved due to the

good earnings development.

BBB+

A

Scope

DBRS

A (low) BBB (high)

Short-term credit rating

S&P

A-2

P-2

A-ꢆ

P-ꢆ

Moody’s

Fitch

Moody’s Investors Service (Moody’s) changed its out-

look for the long-term rating from “stable” to “positive”

on ꢂ December 2021, while affirming its long-term and

short-term credit ratings for Mercedes-Benz Group AG

and its rated subsidiaries at Aꢃ and P-2. Moody’s justi-

fied this with the improved margins of the car and van

business, the changeover of the product portfolio to

low-emission and emission-free vehicles in the context

of the new corporate strategy, and reduced financial

debt.

F1

Fꢅ

Scope

DBRS

S-1

S-ꢅ

R-1 (low)

R-ꢆ (high)

ꢂ9

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Financial position

B.ꢂꢅ

Condensed statement of

financial position

Mercedes-Benz

Mobility

Mercedes-Benz Group

Industrial Business

At 3ꢅ December

2

021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

2021

ꢆꢀꢆꢀ

In millions of euros

Assets

Intangible assets

15,005

27,859

44,471

80,ꢉ25

13,588

21,4ꢉꢉ

7,ꢉ73

ꢅꢇ,3ꢄꢄ

3ꢉ,ꢆꢁꢇ

ꢁ7,ꢉꢉꢆ

ꢄꢇ,ꢅꢈꢉ

ꢉ,ꢅꢈꢄ

14,38ꢉ

27,497

14,400

-83

ꢅꢉ,ꢇꢈꢇ

3ꢁ,ꢄꢀꢁ

ꢅ7,ꢄꢁꢄ

-ꢈ3

ꢉ19

3ꢉ2

7ꢅ3

3ꢁꢆ

Property, plant and equipment

Equipment on operating leases

Receivables from financial services

Equity-method investments

Inventories

30,071

80,708

471

ꢆꢄ,ꢇꢀ3

ꢄꢇ,ꢆꢇꢈ

7ꢁꢇ

13,117

20,97ꢉ

ꢉ,875

ꢁ,ꢁꢁ3

ꢆꢉ,ꢆꢄꢈ

ꢄ,ꢄꢆꢄ

ꢆꢀ,3ꢁꢁ

ꢆꢇ,ꢁꢁꢁ

ꢅꢀ,ꢇꢁꢄ

ꢆ3,ꢀꢁꢈ

490

ꢅ,ꢅꢁꢇ

7ꢆꢀ

Trade receivables

798

Cash and cash equivalents

23,120

18,034

5,08ꢉ

ꢆ,7ꢀꢁ

Marketable debt securities

and similar investments

7,579

ꢉ,70ꢉ

873

ꢇ,3ꢄ7

ꢉ,3ꢉꢇ

ꢅ,ꢀꢁꢅ

ꢇ,ꢄꢆꢁ

ꢅꢅ,7ꢀꢁ

-

ꢉ,591

ꢉ,289

302

ꢉ,ꢁꢇꢈ

ꢉ,ꢅꢇꢉ

3ꢀ3

988

417

ꢄꢆꢄ

ꢅꢄꢅ

thereof current

thereof non-current

Other financial assets

Other assets

571

73ꢈ

ꢉ,2ꢉ0

9,043

3,142

259,831

-8,207

-152

-ꢅꢀ,ꢈꢇꢆ

ꢅ,3ꢄꢇ

-

14,4ꢉ7

9,195

2,941

14ꢉ,19ꢉ

ꢅ7,7ꢈꢇ

ꢅꢀ,3ꢀꢈ

-

Assets held for sale

Total assets

201

ꢆꢈꢉ,737

113,ꢉ35

ꢅꢆꢁ,ꢁ7ꢆ

ꢅꢇꢅ,ꢆꢇꢉ

Equity and liabilities

Equity

73,1ꢉ7

21,321

125,843

52,300

73,543

10,ꢉ55

7,805

ꢇꢆ,ꢆꢁꢈ

3ꢆ,ꢉꢆꢀ

ꢅꢁꢉ,ꢈꢁꢆ

ꢉꢄ,3ꢀ3

ꢈꢇ,ꢉ3ꢄ

ꢅꢆ,37ꢈ

ꢈ,ꢉꢄꢈ

58,719

20,385

3,877

ꢁ7,ꢄ33

3ꢅ,3ꢆ3

ꢄ,ꢅꢇꢈ

14,448

93ꢉ

ꢅꢁ,3ꢅꢉ

ꢅ,ꢅꢄ7

ꢅ3ꢇ,ꢇ7ꢁ

7ꢈ,ꢀꢆꢀ

ꢉꢈ,ꢇꢉꢁ

773

Provisions

Financing liabilities

thereof current

121,9ꢉꢉ

70,193

51,773

985

-17,893

21,770

9,ꢉ70

-ꢅꢈ,7ꢅ7

ꢆ7,ꢈꢈꢉ

ꢅꢅ,ꢇꢀꢉ

ꢉ,ꢉ3ꢆ

thereof non-current

Trade payables

Other financial liabilities

Contract and refund liabilities

Other liabilities

5,089

2,71ꢉ

342

3,ꢀꢇꢇ

3ꢉꢈ

9,909

ꢅꢆ,ꢄꢉꢇ

ꢅꢅ,ꢅꢄꢉ

-

9,5ꢉ7

ꢅꢆ,ꢉꢄꢈ

ꢇ,3ꢅ3

10,9ꢉ2

1ꢉ9

ꢉ,282

4,ꢉ80

123

ꢁ,ꢈꢈꢆ

-

Liabilities held for sale

Total equity and liabilities

4ꢉ

-

259,831

ꢆꢈꢉ,737

113,ꢉ35

ꢅꢆꢁ,ꢁ7ꢆ

14ꢉ,19ꢉ

ꢅꢇꢅ,ꢆꢇꢉ

80

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

B.26

B.ꢂꢄ

Assets and liabilities held for sale

of Daimler’s commercial vehicle business

Balance sheet structure Mercedes-Benz Group

In billions of euros

At 31 December 2021

Assets

260 286

70

286 260

Equity and

liabilities

In millions of euros

1

157

62

7

3

Equity

Equipment on operating leases

Receivables from financial services

Cash and cash equivalents

Other financial assets

533

2,228

ꢉ2

Non-current assets

124

100

9

8

9

8

Non-current

liabilities

1

15

1

03

Current assets

thereof liquidity

179

Current

liabilities

Other assets

140

31

2

9

Assets held for sale

3,142

2020

2021

Financial liabilities

Other liabilities

107

ꢉ2

B.ꢂꢇ

Liabilities held for sale

1ꢉ9

Disposed of assets and liabilities

of the Daimler commercial vehicle business

In millions of euros

The balance sheet total of the Group decreased com-

pared with ꢃ1 December 2020 from €285.ꢂ billion to

€259.8 billion. This represents a decrease of 9%.

Adjusted by currency translation effects of €9.0 billion,

there was a decrease of €ꢃ4.9 billion. Mercedes-Benz

Mobility accounted for €146.2 billion of the balance

sheet total (2020: €161.ꢃ billion), equivalent to 56% of

the Group’s total assets (2020: 56%).

Intangible assets

1,773

8,058

3,887

15,759

1,40ꢉ

8,132

3,354

5,489

145

Property, plant and equipment

Equipment on operating leases

Receivables from financial services

Equity-method investments

Inventories

Trade receivables

Cash and cash equivalents

Table



B.25 shows the condensed statement of finan-

Marketable debt securities and similar investments

Other financial assets

cial position for the Group as well as for the industrial

business and Mercedes-Benz Mobility.

1,070

2,8ꢉ8

Other assets

Current assets account for 40% of the balance sheet

total, which is at prior-year level. Current liabilities

amount to ꢃ4% of total equity and liabilities, which is

slightly below prior-year level (2020: ꢃ5%).

Provisions for pensions and similar obligations

Provisions for other risks

Financing liabilities

2,ꢉ3ꢉ

4,ꢉꢉ2

7,801

3,879

2,724

3,344

1,504

Trade liabilities

Other financial liabilities

Contract and refund liabilities

Other liabilities

Graphic



B.26 shows the structure of the balance

sheet by maturity.

The structural changes in the Consolidated Statement of

Financial Position are primarily due to the spin-off of

the Daimler commercial vehicle business as of

9



December 2021 (refer to table B.27). As of

ꢃ1 December 2021, further assets and liabilities of

Daimler’s commercial vehicle business that will be

81

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

transferred in 2022 – as far as the criteria of IFRS 5

were met — are presented as assets and liabilities held

for sale.

semiconductors for vehicles of the Mercedes-Benz Cars

& Vans segment, whose inventories were €2.0 billion

above the prior-year’s level.

Equipment on operating leases and Receivables from The Group’s Equity increased compared with

financial services decreased to a total of €125.1 billion

2020: €14ꢃ.ꢂ billion). The decrease adjusted for the

ꢃ1 December 2020 from €62.2 billion to €ꢂꢃ.2 billion.

The positive effects of currency translation amounted to

€ꢃ.0 billion. The equity increase mainly resulted from

the net profit of continuing operations of €11.1 billion

and the profit from discontinued operations after tax of

€12.ꢃ billion as well as from gains in connection with

pension provisions recognised in other comprehensive

income (€ꢃ.6 billion). Opposing effects mainly came

from the spin-off and hive-down of the Daimler com-

mercial vehicle business of €16.ꢃ billion, the dividend of

€1.4 billion paid out to the shareholders of Mercedes-

Benz Group AG and from the remeasurement of deriva-

tive financial instruments of €0.9 billion recognised in

other comprehensive income. Equity attributable to the

shareholders of Mercedes-Benz Group AG increased

accordingly to €ꢂ2.0 billion (2020: €60.ꢂ billion).

(

effects of currency translation was €24.ꢂ billion. The

leasing and sales-financing business as a proportion of

4

8% of total assets was lower than in the prior year

2020: 50%). As of ꢃ1 December 2021, the Group or

(

respective Mercedes-Benz Mobility recognised €1.6 bil-

lion finance lease contracts under receivables from

financial services and €1.1 billion right-of-use-

assets under equipment on operating leases in connec-

tion to leasing contracts with companies of the Daimler

Truck Group.

Equity-method investments increased to €1ꢃ.6 billion

(2020: €5.2 billion). The remaining minority interest of

ꢃ5% in Daimler Truck Holding AG, has been accounted

for using the equity method effective 10 December

2

€

021; the carrying amount at ꢃ1 December 2021 was

8.8 billion. In addition, the equity-method investments

While the balance sheet total decreased, equity

increased by 18% compared with the previous year.

Accordingly, the Group’s equity ratio of 26.1% was there-

fore significantly above the level at the end of 2020

(21.ꢃ%); the equity ratio for the industrial business was

also include the carrying amounts of our further equity

interests, mainly the interest in Beijing Benz Automotive

Co., Ltd.

4ꢂ.0 % (2020: ꢃꢂ.ꢃ%). It is necessary to consider the fact

Marketable debt securities and similar investments

increased compared with ꢃ1 December 2020 from

that the equity ratios at the end of 2020 and 2021 are

adjusted for the paid and proposed dividend payments.

€6.4 billion to €ꢂ.6 billion as part of the liquidity man-

agement. Those assets include the debt instruments

that are allocated to liquidity, most of which are traded

in active markets. They generally have an external rating

of A or better.

Provisions significantly decreased from €ꢃ2.5 billion to

€21.ꢃ billion; as a proportion of the balance sheet total,

they were also below the prior-year level at 8% (2020:

11%). Provisions for pensions and similar obligations

decreased to €5.4 billion (2020: €12.1 billion). The pres-

ent value of defined-benefit pension obligations

decreased from €ꢃ9.9 billion in the prior year to

Inventories decreased from €26.4 billion to €21.5 bil-

lion, mainly due to the spin-off and hive down of the

Daimler commercial vehicle business. As a proportion of €28.5 billion as of ꢃ1 December 2021. With an effect of

total assets, they were below the prior-year level at 8%

2020: 9%). Inventories decreased in particular in fin-

ished goods, parts and products held for resale by

4.8 billion and in raw materials and manufacturing

supplies by €0.5 billion, while work in progress was

0.ꢃ billion above the prior-year’s level. The different

€8.1 billion, this mainly results from the spin-off and

hive-down of Daimler’s commercial vehicle business.

The increase in discount rates also led to a decrease in

the present value of defined-benefit pension obliga-

tions. The fair value of the pension-plan assets applied

to finance those obligations decreased from €28.9 bil-

lion to €24.2 billion. Opposing the decrease in the plan

(

€

development within the composition of inventories is,

among other things, due to shortages in

82

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

assets caused by the spin-off and hive-down of

Daimler’s commercial vehicle business was the positive

yield development of the plan assets.

Trade payables decreased primarily due to the spin-off

and hive-down of the Daimler commercial vehicle busi-

ness compared with ꢃ1 December 2020 to €10.ꢂ billion

(2020: €12.4 billion). In contrary, trade payables of

Provisions also relate to provisions from product war-

ranties of €6.8 billion (2020: €8.5 billion), from person-

nel and social costs of €4.6 billion (2020: €4.6 billion)

and from liability and litigation risks and regulatory pro-

ceedings of €2.6 billion (2020: €4.6 billion), as well as

provisions for other risks of €1.9 billion (2020: €2.ꢂ bil-

lion). In provisions for other risks, provisions for liability

and litigation risks decreased from the payments made

Mercedes-Benz Cars & Vans increased by €0.8 billion.

Further information on the assets presented in the

statement of financial position and on the Group’s

equity and liabilities is provided in the Consolidated

Statement of Financial Position

dated Statement of Changes in Equity

related notes in the Notes to the Consolidated Financial



D.03, the Consoli-



D.05 and the

in March 2021 in particular as a result of the agreements Statements.

concluded with the US authorities in the previous year

to settle civil and environmental claims regarding the

emission-control systems of certain diesel vehicles. In

the Mercedes-Benz Cars & Vans segment, provisions for

personnel and social costs increased by €1.1 billion,

among other things due to the planned higher profit

sharing for employees (€0.ꢂ billion).



Table B.29 shows the derivation of net assets for the

Mercedes-Benz Cars & Vans segment. They relate to the

operating assets and liabilities for which the automotive

segment is responsible.

B.ꢂꢈ

Financing liabilities of €125.8 billion were significantly

below the level of the previous year (2020: €145.8 bil-

lion), among other things, as a result of a lower net-in-

crease in bonds and liabilities to financial institutions.

The financing liabilities break down 5ꢃ% by bonds, 19%

by liabilities to banks, 15% by liabilities from ABS trans-

actions and 11% by deposits in the direct banking busi-

ness. The financing liabilities available on ꢃ1 December

Net Assets Mercedes-Benz Cars & Vans

At 3ꢅ December

2021

ꢆꢀꢆꢀ

In millions of euros

Intangible assets

14,374

27,51ꢉ

21,077

ꢉ,897

25,894

95,758

71

ꢅ3,ꢄꢄꢅ

ꢆꢇ,ꢇꢇꢅ

ꢅꢄ,ꢅꢅ7

ꢇ,ꢈ3ꢄ

ꢆꢁ,7ꢉꢆ

ꢄꢅ,3ꢇꢀ

ꢀ

Property, plant and equipment

Inventories

2021 relate primarily to the refinancing requirements of

Trade receivables

the leasing and sales-financing business with passenger

cars.

Other segment assets

Segment assets

thereof assets held for sale

Trade payables

9,ꢉ00

50,470

ꢉ0,070

48

ꢈ,7ꢉꢆ

ꢉꢅ,ꢁꢅꢇ

ꢇꢀ,ꢅꢇꢈ

ꢀ

Other segment liabilities

Segment liabilities

thereof liabilities held for sale

Net assets

35,ꢉ88

3ꢅ,ꢅꢄꢆ

8ꢃ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

MercedesꢃBenz Group AG

Condensed version in accordance with the German Commercial Code (HGB)

In addition to reporting on the Mercedes-Benz Group,

the development of Mercedes-Benz Group AG in the

concluded in connection with the transaction. The con-

trol and profit-and-loss transfer agreement existing

between Daimler AG and Daimler Truck AG was trans-

ferred to Daimler Truck Holding AG in the context of the

spin-off with effect from 1 January 2021.

2021 financial year is also described in this section.

Fundamentals, changes in the corporate structure

and the change of the company name

Mercedes-Benz Group AG is the parent company of the

Mercedes-Benz Group and has its headquarters in

Stuttgart. At the Extraordinary General Meeting on

Mercedes-Benz Group AG is closely linked with

Mercedes-Benz AG and functions as an operating busi-

ness entity that defines the Group’s strategy. It also

makes strategic decisions for business operations and,

as the Group’s parent company, ensures the effective-

ness of organisational, legal and compliance-related

functions throughout the Group.

1

October 2021, the shareholders voted in favour of

changing the Company’s name from Daimler AG to

Mercedes-Benz Group AG. This name change was

entered in the commercial register on 1 February 2022.

For this reason, in addition to the name Mercedes-Benz

Group AG, the name Daimler AG is also used here,

depending on the respective facts and time.

The annual financial statements of Mercedes-Benz

Group AG are prepared in accordance with the German

Commercial Code (HGB). The consolidated financial

statements are prepared in accordance with the Inter-

national Financial Reporting Standards (IFRS), as

adopted by the European Union (EU). This results in

some differences with regard to recognition and meas-

urement, primarily in connection with provisions, finan-

As part of the Company’s realignment (Project Focus)

and with the approval of the Supervisory Board, the

Board of Management decided on ꢃ0 July 2021 to spin

off and hive down a large part of the previous Daimler

Trucks & Buses segment, including the associated finan-

cial services business (Daimler commercial vehicle busi- cial instruments, the leasing business and deferred

ness). The legal basis of the reorganisation is the spin-

off and hive-down agreement between Daimler AG and

Daimler Truck Holding AG concluded on 6 August 2021.

taxes.

For Mercedes-Benz Group AG net profit or loss is the

main performance indicator.

The shareholders approved the spin-off and hive-down

agreement at the Extraordinary General Meeting of

Daimler AG on 1 October 2021. The General Meeting of

Daimler Truck Holding AG gave its approval on 5 Novem-

ber 2021. The spin-off and hive-down were entered in

the commercial register on 9 December 2021 with eco-

nomic retroactive effect as of 1 January 2021 (spin-off

effective date). With the spin-off and hive-down taking

effect, as well as other measures provided for in the

demerger agreement, Mercedes-Benz Group AG directly

and indirectly holds a minority interest totalling ꢃ5% of

the share capital of Daimler Truck Holding AG as of the

balance sheet date, and therefore no longer exercises a

controlling influence on the basis of the agreements

Profitability

Net profit amounted to €9.5 billion (2020: €2.1 billion)

and is thus within the expected range of the previous

year’s forecast.

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The profitability of Mercedes-Benz Group AG in the

B.ꢃꢀ

financial year was characterised by significantly better

Condensed income statement of Mercedes-Benz Group AG

financial income.B.30

ꢂꢀꢂꢁ

2020

In millions of euros

Mercedes-Benz Group AG generated revenue of €1.5

billion primarily from the provision of services to com-

panies of the Group (2020: €1.ꢂ billion).

Revenue

ꢁ,ꢆꢄꢄ

-ꢁ,ꢆꢇꢀ

-ꢁ,ꢂꢃꢇ

ꢁꢆꢁ

1,685

-1,641

-928

280

Cost of sales

General administrative expenses

Other operating income

Operating loss

Financial income

Income taxes

Cost of sales amounted to €1.5 billion (2020: €1.6 bil-

lion) and primarily comprises expenses incurred for the

generation of revenue from services provided to com-

panies of the Group.

-ꢁ,ꢀꢇꢄ

ꢁꢁ,ꢂꢇꢁ

-6ꢅꢅ

-604

2,8ꢂ8

-141

Net profit

ꢈ,ꢅꢃꢄ

2,1ꢃꢃ

General administrative expenses amounted to €1.2

billion (2020: €0.9 billion), including expenses of €0.2

billion (2020: €0.0 billion) in connection with Project

Focus and of €0.1 billion (2020: €0.0 billion) in connec-

tion with the transformation of the IT infrastructure.

Offset against other retained earnings

Reduction in assets due to the spin-off

Transfer to other retained earnings

ꢁꢃ,ꢄꢇꢈ

-ꢁꢃ,ꢄꢇꢈ

-ꢆ,ꢁꢄꢈ

-

-689

Other operating income amounted to €0.1 billion

Distributable profit

ꢅ,ꢃꢆꢈ

1,444

(2020: €0.ꢃ billion) and primarily comprises income

from the sale of patents and brands to Daimler Truck AG.

In the previous year, it included income from the sale of

patents in connection with combining the Group-wide

fuel-cell activities and relating to Group-internal deriva-

tives of the vehicle business.

therefore corresponds with that of the Mercedes-Benz

Group, which is described in the chapter Overall Assess-

ment of the Economic Situation.

Financial income increased by €8.4 billion to €11.ꢃ bil-

lion and is thus within the expected range of the previ-

ous year’s forecast. The increase is primarily due to

higher income from investments in subsidiaries and

associated companies. This was the result of a positive

development with profit transfers and higher dividend

distributions from subsidiaries.

Financial position, liquidity and capital resources

Total assets of €8ꢃ.0 billion are €9.6 billion lower than

in the previous year.

Non-current assets decreased during the year 2021 by

€15.1 billion to €41.1 billion. This was caused by the €15.0

billion decrease in financial assets, which mainly

resulted from the spin-off of 65% of the shares of

Daimler Truck AG to Daimler Truck Holding AG, as well

as capital repayments by Mercedes-Benz Capital Neder-

land B.V. (formerly Daimler International Nederland B.V.)

to Mercedes-Benz Group AG.

The income tax expense amounted to €0.ꢂ billion

(2020: €0.1 billion). The rise is mainly due to the sub-

stantial increase in income subject to corporate income

tax as well as income subject to trade tax (2020: trade-

tax loss).

The economic situation of Mercedes-Benz Group AG

mainly depends on the development of its subsidiaries.

Mercedes-Benz Group AG participates in the operating

results of its subsidiaries through dividend distributions

and profit-and-loss transfers. Its economic situation

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B.ꢃꢁ

Receivables, securities and other assets increased

Balance sheet structure of Mercedes-Benz Group AG

compared with December ꢃ1, 2020 by €4.1 billion to

ꢃꢁ Dec.

ꢂꢀꢂꢁ

ꢃ1 Dec.

2020

€

ꢃ2.6 billion. This is due to the increase of €2.1 billion in

other assets which was primarily caused by the pres-

entation of approximately 5% of the shares in Daimler

Truck Holding AG due to the intra-Group sale in January

In millions of euros

Assets

2022 as well as a higher amount of marketable securi-

Non-current assets

Receivables, securities and other assets

Cash and cash equivalents

Current assets

ꢆꢁ,ꢁꢃꢁ

ꢃꢂ,ꢅꢄꢃ

ꢈ,ꢀꢆꢇ

56,161

28,4ꢂ1

ꢂ,658

ꢃ6,129

ꢃ41

ties recognised as current assets. In addition, receiva-

bles from subsidiaries increased by €1.8 billion as a

result of higher financial receivables from profit-and-

loss transfer agreements. This includes a decrease of

ꢆꢁ,6ꢃꢀ

ꢂꢃꢁ

€1.9 billion in receivables from subsidiaries because of

Prepaid expenses

the spin-off and hive-down of the Daimler commercial

vehicle business.

ꢄꢂ,ꢈꢈꢂ

92,6ꢃ1

Equity and liabilities

Cash and cash equivalents increased from €ꢂ.ꢂ billion

Share capital

ꢃ,ꢀꢇꢀ

ꢃ,0ꢂ0

to €9.0 billion.

(conditional capital, €500 million)

Capital reserve

ꢁꢁ,ꢆꢄꢀ

ꢁꢃ,ꢅꢆꢀ

ꢅ,ꢃꢆꢈ

ꢃꢃ,ꢆꢃꢈ

ꢁꢂꢄ

11,480

2ꢃ,2ꢃ0

1,444

ꢃ9,224

19ꢃ

Gross liquidity — defined as cash and cash equivalents

and other marketable securities recognised as current

assets, as well as fixed-term deposits presented under

other assets — increased by €2.4 billion to €15.4 billion

as of the balance sheet date. The increase in gross

liquidity is primarily due to the increase in cash and

cash equivalents of €1.ꢃ billion.

Retained earnings

Distributable profit

Equity

Provisions for pensions and similar obligations

Other provisions

Provisions

ꢁ,ꢇꢇꢅ

ꢁ,ꢈꢀꢃ

ꢃꢅꢄ

1,550

1,ꢂ4ꢃ

Trade payables

140

Other liabilities

ꢆꢇ,ꢂꢇꢁ

ꢆꢇ,6ꢂꢈ

ꢂꢁ

51,48ꢂ

51,62ꢂ

ꢃꢂ

Cash provided by operating activities amounted to

Liabilities

€ꢃ.ꢃ billion in 2021 (2020: €2.6 billion). The increase

Deferred income

resulted in particular from higher dividend distributions

from subsidiaries. There was an opposing, negative

effect on cash provided by operating activities due to

the operating loss and the higher tax expense.

ꢄꢂ,ꢈꢈꢂ

92,6ꢃ1

Cash flows from investing activities resulted in a net

cash outflow of €1.0 billion in 2021 (2020: inflow of €2.ꢃ

billion). Compared with the previous year, there were

higher cash outflows in the area of financial assets from

the corporate restructuring associated with the spin-off

of the Daimler commercial vehicle business. During the

reporting year, there were cash inflows as a result of

capital repayments by the subsidiaries Mercedes-Benz

Capital Nederland B.V. (formerly Daimler International

Nederland B.V.) and Mercedes-Benz Mobility AG (for-

merly Daimler Mobility AG) to Mercedes-Benz Group AG,

as well as from the sale of subsidiaries within the Group

to Daimler Truck AG. There was a cash outflow of €1.2

billion from acquisitions and disposals of securities

conducted within the context of liquidity management

during the reporting year.

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Cash flows from financing activities resulted in a net

cash outflow of €0.9 billion in the reporting period

2020: €0.1 billion). The change is explained by the

higher dividend payment to the shareholders of

Mercedes-Benz Group AG, the increased repayment of

external financing liabilities and the change in receiva-

bles from and liabilities to subsidiaries from intra-Group

transactions in connection with central financial and

liquidity management.

Risks and opportunities

(

The business development of Mercedes-Benz Group AG

mainly depends on the development of its worldwide

subsidiaries and is therefore — through the profit and

loss contributions from subsidiaries and associated

companies — fundamentally subject to the same risks

and opportunities as those of the Group. Mercedes-

Benz Group AG generally participates in the risks of its

subsidiaries and associated companies in line with the

Equity decreased in 2021 by €5.8 billion to €ꢃꢃ.4 billion. percentage of its respective equity interest. This is par-

The spin-off of 65% of the shares of Daimler Truck AG to

Daimler Truck Holding AG and the capital increase at

Daimler Truck AG in the context of this spin-off, as well

as the contractually agreed reimbursement of the costs

incurred by Daimler Truck AG, led to a decrease in

equity of €1ꢃ.9 billion. In addition, equity decreased by

ticularly the case with the shareholding in Daimler Truck

Holding AG. The risks and opportunities are described in

the Risk and Opportunity Report. Risks may additionally

arise from relations with subsidiaries and associated

companies in connection with statutory or contractual

obligations (in particular with regard to financing), as

well as from the impairment of investments in subsidi-

€1.4 billion due to the dividend payment to the share-

holders of Mercedes-Benz Group AG. On the other hand, aries and associated companies. Based on the criteria

equity rose as a result of the net profit for 2021, of

which €4.2 billion was transferred to retained earnings

pursuant to Section 58 Subsection 2 of the German

Stock Corporation Act (AktG). The equity ratio as of ꢃ1

December 2021 was 40.ꢃ% (ꢃ1 December 2020: 42.ꢃ%).

Mercedes-Benz Group AG held no treasury shares as of

ꢃ1 December 2021.

stated in the Risk and Opportunity Report, the possible

impact and probability of occurrence of the risks are

assessed as medium.

Furthermore, pursuant to Section 1ꢃꢃ Subsections 1 and

ꢃ of the German Transformation Act (UmwG), Mercedes-

Benz Group AG is jointly and severally liable for liabili-

ties of €8.9 billion that were transferred to Mercedes-

Benz AG and Daimler Truck AG within the framework of

Project Future. According to the current appraisal, due

to the assessment of the creditworthiness of Mercedes-

Benz AG and Daimler Truck AG, an actual cash outflow

for Mercedes-Benz Group AG is considered to be

unlikely.

Provisions increased by €0.2 billion to €1.9 billion. This

was mainly due to the increase in provisions for income

taxes.

Liabilities decreased by €4.0 billion to €4ꢂ.6 billion.

This was mainly due to the repayment of bonds in the

amount of €4.9 billion. However, liabilities to subsidiar-

ies increased by €0.5 billion. This includes the decrease

of €2.ꢃ billion in liabilities due to the spin-off and hive-

down of the Daimler commercial vehicle business.

8ꢂ

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Outlook

The financial position, cash flows and profitability of

Mercedes-Benz Group AG depend on the business

development and performance of its operating subsidi-

aries, in whose development it participates through

profit-and-loss transfer agreements and dividend distri-

butions.

For the year 2022, we expect Mercedes-Benz Group AG

to post a significantly higher net profit than for the year

2021. In particular, we anticipate significantly improved

financial income resulting from higher profit transfers

and dividends from major subsidiaries.

In addition, due to the interrelations between

Mercedes-Benz Group AG and its subsidiaries, we refer

to the statements in the Outlook chapter, which largely

reflect our expectations for the parent company as well.

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NonꢃFinancial Declaration

We publish the non-financial declaration in accordance

with the provisions of the German Commercial Code

Pursuing sustainable business strategies

The Mercedes-Benz Group acts in line with the sustaina-

ble business strategies adopted by the Board of Man-

agement in 2019. This means that rather than being sup-

plements to the business strategies, sustainability

(

HGB). They apply to the former Daimler AG (Sections

89b–289e HGB) and the former Daimler Group (Sec-

tions ꢃ15b, ꢃ15c HGB) — now known as Mercedes-Benz

2

Group AG and the Mercedes-Benz Group, respectively — issues are instead an integral component of them.

for the reporting period 1 January 2021 to ꢃ1 December

2

021. Daimler Truck AG is only included in this non-fi-

Our strategic goals are based on the UN’s Sustainable

Development Goals (SDGs) — especially SDGs 8 and 9

and 11 to 1ꢃ — among other factors. In addition, they

take into account recognised international frameworks,

the requirements of the external and internal stakehold-

ers, and global trends. From this prioritisation, we have

also derived Group-wide areas of action and areas of

responsibility, as well as business-specific targets, pro-

cesses and measures. Additional information:

un.org/goals

nancial declaration for the period prior to the spin-off

and hive-down, i.e., 1 January to 9 December 2021. Any

information about Daimler Truck that is presented

below refers solely to the aforementioned time period.

The non-financial declaration contains the main infor-

mation on the aspects of environmental, employee and

social matters, combating corruption and bribery, and

respect for human rights. The information provided in

this declaration is presented in conformity with the GRI

Standards of the Global Reporting Initiative, insofar as

this complies with applicable law. Some aspects are

presented in accordance with internal guidelines and

definitions. You can find additional information on our

business model in the Business Model chapter, while

further details of the risks connected with the aspects

covered in this report can be found in the Risk and

Opportunity Report.

_wsdgs.

We have also formulated strategic ambitions for each of

our six areas of action:

– Climate protection & air quality: Plans call for our

new vehicle fleet to be CO -neutral across the entire

2

life cycle by 20ꢃ9 and to no longer have any relevant

impact on NO levels in urban areas by 2025.

2

–

Resource conservation: We want to decouple

Sustainability as value added

resource consumption from business volume growth.

At the Mercedes-Benz Group, sustainability means gen-

erating sustainable economic, environmental and social

value added for our stakeholders, i.e., our customers,

employees, investors, business partners and society as

a whole. Sustainable development is therefore part of

the brand essence of Mercedes-Benz and a guiding

principle of our actions and all our interactions with our

customers. This holistic strategic approach applies not

only to our own products and manufacturing locations

but also to our entire upstream and downstream value

chain.

– Sustainable urban mobility: We contribute to the

improvement of the quality of life in cities through our

leading mobility and transport solutions.

– Traffic safety: We are working to make our vision of

accident-free driving a reality as we develop auto-

mated driving systems while also taking social and

ethical issues into account.

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–

Data responsibility: Our future consists of sustaina-

analysis consists of several components: a comprehen-

sive analysis of competitors, media reporting, regulatory

requirements, information relevant to capital markets,

as well as the influence of the SDGs and an online

stakeholder survey and interviews with experts.

ble, data-based business models. With these busi-

ness models, we focus on the needs of our customers

and the responsible handling of data.

Human rights: We have assumed responsibility for

respecting and upholding human rights along our

automotive value chain.

In a subsequent step, the sustainability issues that

resulted from this analysis were assessed with regard to

financial position, cash flows, profitability and business

development, in order to define the topics for this

Non-Financial Declaration. For this reason, not all stra-

tegic areas of action are shown in this non-financial

statement.

We strive to cooperate in trust-based relationships with

our partners in industry, government and society at

large, in order to make these ambitions a reality. For

more information, see the Social Issues chapter.

We also rely on the dedication and commitment of our

Managing sustainability

workforce, who are helping to shape the transformation. We are managing our work in the strategic areas of

We have defined three enablers, or principles, that are

crucial for achieving success in the six areas of action:

integrity, people and partnerships.

action — alongside other tasks — by means of an inter-

nal reporting process that uses detailed scorecards.

This process is supported by clear lines of responsibility

in the management and organisational structures used

at all of our divisions.

As was the case in the previous financial year, the

Mercedes-Benz Group integrates the Non-Financial

Declaration into the Combined Management Report of

this Annual Report. Each year, we examine whether and

how we should refine the integration of financial and

non-financial key figures. For the year under review, the

Group Sustainability Board has decided to continue to

publish more in-depth information about sustainability

The Group Sustainability Board (GSB) is our central man-

agement body for all sustainability issues and reports to

the Board of Management. The GSB is chaired jointly by

Renata Jungo Brüngger (the Board of Management

member responsible for Integrity and Legal Affairs) and

Markus Schäfer (the Board of Management member

at the Mercedes-Benz Group in a separate Sustainability responsible for Development & Procurement, who is

Report. It will be available on the Group’s website from

the end of March 2022.

sustainability

also Chief Technology Officer). The Chairman of the

Board of Management and the Board of Management

members responsible for Finance, Marketing & Sales as

well as representatives of additional important func-

tions and departments are members of the GSB. The

operational work is done by the Sustainability Compe-

tence Office (SCO), which consists of representatives

from the units managed by the two Co-chairs of the GSB

as well as additional representatives from Corporate

Strategy, Finance and Corporate Communications.

Besides performing its other tasks, the SCO also moni-

tors the progress made in the six areas of action and the

three enablers defined in the sustainable business

strategy. The results are reported to the GSB and the

Board of Management in the form of detailed score-

cards at least once a year. We also use the ten princi-

ples of the UN Global Compact as a fundamental guide

_wgroup.mercedes-benz.com/

Materiality analysis

We conducted a comprehensive materiality analysis in

2020 in order to determine which sustainability issues

are particularly relevant for the companies of the Group

and its stakeholders. The results of this analysis are still

being used in our current reporting at the Mercedes-

Benz Group. In the reporting year, due in particular to

the restructuring of the Group at the end of 2021, we

started to carry out the materiality analysis for the new

Mercedes-Benz-Group. This analysis is to be completed

in 2022.

The materiality analysis conducted in 2020 addressed

the existing strategic areas of action as well as further

potentially relevant sustainability issues and trends. The

90

Annual Report 2021 · Mercedes-Benz Group

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for our business operations. As a founding member, the

Mercedes-Benz Group is strongly committed to the UN

Global Compact.

and voluntary process guidelines of the International

Capital Market Association (ICMA). In 2020, the Green

Finance Framework was presented in a virtual roadshow

and attracted a great deal of interest among investors.

The Mercedes-Benz Group’s internal principles and poli- The framework has also received certification with the

cies are founded on this international frame of refer-

ence and other international principles, including the

Core Labour Standards of the International Labour

Organisation (ILO), the OECD Guidelines for Multina-

tional Enterprises and the UN Guiding Principles on

Business and Human Rights.

highest rating — “Dark Green” — from the respected

Centre for International Climate and Environmental

Research (CICERO) in 2020.

group.mercedes-benz.

w

com/dokumente/investoren/anleihen/rating/2020-06-

18-daimler-green-finance-2nd-opinion-cicero.pdf

EU taxonomy

The company bonus provides short-term and medi-

um-term variable components of remuneration for the

Board of Management and Level 1–ꢃ executives, as well

as for Level 4 managers in some cases. These compo-

nents are linked not only to financial targets but also to

One of the important goals of the Commission Action

Plan on Financing Sustainable Growth is to divert capital

flows to sustainable investments as part of the Euro-

pean Green Deal. This is also the logic behind the EU

taxonomy regulation that came into force in mid-2020.

sustainability-related transformation targets and non-fi- This regulation governs the establishment of a standard-

nancial targets that focus on customers, integrity and

employee commitment and diversity. Further informa-

tion can be found in the 2021 Remuneration Report.

ised and legally binding classification system that

defines which economic activities in the EU are consid-

ered to be aligned with the taxonomy — and thus envi-

ronmentally sustainable with regard to the six environ-

mental objectives established by the regulation.

group.mercedes-benz.com/company/

w

corporate-governance/declarations-reports

Companies are required to apply the taxonomy regula-

tion if they have to draw up a non-financial declaration

pursuant to Article 19a or Article 29a of the EU account-

ing directive, which is implemented in Germany in Sec-

tion 289b Subsection 1 and Section ꢃ15b Subsection 1 of

the German Commercial Code (HGB). As a result, the

Sustainable investment

Sustainability criteria (ESG criteria) are becoming

increasingly important for asset managers. This trend is

also reflected by the increasing number of investors

who have committed themselves to the UN Principles

for Responsible Investment (PRI), which were presented Mercedes-Benz Group is obliged to apply the taxonomy

in 2006.

regulation. The proportions of revenue, capital expendi-

ture and operating expenses accounted for by environ-

mentally sustainable economic activities are to be

reported on an annual basis. These proportions are

The sustainable business strategy at the Mercedes-Benz

Group requires a major amount of investment. For this

reason, one of our goals is that our shares are viewed by determined on the basis of IFRS amounts.

the capital market as a sustainable investment.

In accordance with an exemption granted by the EU for

In 2020, we developed a Group-wide Green Finance

Framework in order to position ourselves even more

effectively as a sustainable company worthy of invest-

ment and to enable us to utilise the opportunities that

ESG-based capital offers for corporate development.

The Green Finance Framework makes it possible for us

to finance targeted investment in sustainable technolo-

gies through bonds and loans, for example. To date, we

have issued green bonds with a total volume of €2 bil-

lion on this basis, in September 2020 and March 2021.

The framework is based on the Green Bond Principles

the regulation’s initial application period, only the pro-

portions of revenue, capital expenditure and operating

expenses accounted for by taxonomy-eligible and tax-

onomy non-eligible economic activities have to be

reported in the 2021 reporting year. For an economic

activity to be taxonomy-eligible, that activity must be

mentioned and explained in further detail in the dele-

gated acts. In addition, only the first two environmental

objectives (climate-change mitigation and climate adap-

tation) are relevant for the current reporting period.

Descriptions of relevant activities and technical

91

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screening criteria have already been made available via

delegated acts. Climate mitigation in particular is to be

regard to car manufacturers in particular, question 9 of

the document shows as an example that the activity

regarded as the relevant environmental objective for the “manufacture of low carbon vehicles” also includes vehi-

Mercedes-Benz Group.

cles with combustion engines. At the same time, the

document shows that reporting on taxonomy eligibility

generally does not yet amount to an assessment of

environmental sustainability within the framework of

taxonomy alignment. For Mercedes-Benz Group AG, this

clarification by the European Commission means that

the manufacture of all Group vehicles is reported as tax-

onomy-eligible in financial year 2021.

From 2022, taxonomy alignment will have to be

assessed alongside taxonomy eligibility.

In the future, only taxonomy-eligible activities can be

considered as environmentally sustainable activities, or

as being taxonomy-aligned, provided they meet certain

technical screening criteria. Here, the fulfilment of cer-

tain technical screening criteria with regard to the rele-

vant economic activities must make a substantial con-

tribution to an environmental objective defined by the

taxonomy regulation and, on the basis of defined “do no

significant harm criteria”, also exclude the possibility of

significant interference with another environmental

objective. In addition, compliance with minimum social

For reasons of transparency, we are also already volun-

tarily reporting this year on the proportions of vehicles

with emissions below 50g CO /km per vehicle (in

2

accordance with the WLTP) as defined in the technical

screening criteria. All battery-electric vehicles and all

plug-in hybrid vehicles that emit less than 50g CO /km

2

are accordingly considered to be low carbon vehicles.

standards with regard to occupational safety and human By disclosing the proportions of these low carbon vehi-

rights must be ensured.

cles, we are already adopting an important measure for

taxonomy alignment reporting that will not become

mandatory until 202ꢃ. Additional measures for achiev-

ing taxonomy alignment will include the reviews of com-

pliance with the “do no significant harm criteria” and

minimum social standards.

Through its descriptions of economic activities in the

delegated acts, the taxonomy regulation specifies which

activities are basically taxonomy-eligible. The Group

used these descriptions as a basis for determining

whether, and to what extent, specific economic activi-

ties are taxonomy-eligible. Activities such as manufac-

ture of low carbon vehicles and activities in the “trans-

port” sector involving low carbon transport solutions for

people and goods were identified as being taxono-

my-eligible. Thereby, outside the technical screening

criteria, the taxonomy regulation does not define low

carbon. In a draft document that the European Commis-

sion published on 2 February 2022 in order to clarify

open interpretation questions that have arisen as a

result of the EU taxonomy (“Draft Commission notice on

the interpretation of certain legal provisions of the Dis-

closures Delegated Act under Article 8 of EU Taxonomy

Regulation on the reporting of eligible economic activi-

ties and assets”, hereinafter “Interpretation Document”),

the Commission stated that the term “low carbon” only

relates to the assessment of taxonomy alignment within

the framework of the technical screening criteria and is

not relevant for reporting on taxonomy eligibility in the

current reporting period, and is therefore not taken into

consideration by Mercedes-Benz Group AG for the

depiction of the taxonomy-eligible proportions. With

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Mandatory reporting on taxonomy eligibility

Capital expenditure

For the share of taxonomy-eligible capital expenditure,

the taxonomy-eligible capital expenditure is considered

in relation to the total relevant capital expenditure of

the Group.

B.ꢃꢂ

Overview of the proportions of taxonomy-eligible economic activities

Absolute total

Proportion of

(

denominator) taxonomy-eligible

non-taxonomy-

According to the taxonomy regulation, the denominator

of the key figure for capital expenditure is calculated by

taking into account all additions to intangible assets,

equipment on operating leases and property, plant and

equipment, as well as additions to rights-of-use assets

as defined in International Financial Reporting Standard

in millions economic activities eligible economic

of euros

in %ꢊ

activities

in %¹

Revenue

1ꢃꢃ,89ꢃ

99%

1%

0%

Capital

expenditure

2ꢂ,946

6,5ꢂ6

100%

Operating

expensesꢊ

(IFRS) 16 including the additions to the named assets

within the framework of corporate acquisitions. Good-

will acquired is not taken into account here. If a divest-

ment is planned, capital expenditure on non-current

assets is only taken into account until the point in time

at which they were first classified as available for sale or

disbursement in accordance with IFRS 5. The relevant

additions to the assets to be taken into account

1

The key figures were audited in the form of a limited assurance.

The individual figures for revenue, capital expenditure

and operating expenses are precisely allocated to a

specific economic activity and environmental objective.

This prevents double counting.

amounted to €2ꢂ,946 million in the 2021 reporting year

(notes 11, 12 and 13 in the Notes to the Consolidated

Scope of companies to be included

Financial Statements).

Generally, we include all consolidated Group companies

in the calculations for Group key figures. However, com-

panies that are included in the consolidated financial

statements using the equity method are excluded here.

According to the aforementioned interpretation docu-

ment by the European Commission, the definition of an

economic activity is characterized by the achievement

of an output. In line with our business model, the

numerator was therefore determined by examining

whether capital expenditure is needed for the manufac-

ture of vehicles or in connection with transport solu-

tions for people and goods. This applies to nearly all of

our capital expenditure.

Revenue

For the share of taxonomy-eligible revenue, the taxono-

my-eligible revenue is considered in relation to the total

revenue of the Group.

In this process, the denominator takes into account all

the revenue generated at the Group companies that are

to be included in the calculations, with the exception of

companies that have been separately disclosed as dis-

continued operations in the statement of income. This

revenue, as disclosed in the consolidated statement of

income, amounted to €1ꢃꢃ,89ꢃ million in the 2021

reporting year (Note 5 of the Notes to the Consolidated

Financial Statements).

Operating expenses

For the share of taxonomy-eligible operating expenses,

taxonomy-eligible operating expenses are put in rela-

tion to the relevant operating expenses of the Group.

The operating expenses to be taken into account in the

denominator include non-capitalised research and

development expenditure and expenses from short-

term leasing agreements. In addition, expenditure from

building renovation measures and certain maintenance

and repair expenses relating to property, plant and

equipment in accordance with the delegated act speci-

The numerator was calculated by examining this reve-

nue to determine how much of it was generated in con-

nection with manufacturing or the leasing/financing of

vehicles. This applies to almost all of the revenue gener- fying Article 8 of the taxonomy regulation are included.

ated by the Mercedes-Benz Group. These components of the relevant operating

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expenditure were collated exclusively from our manu-

By the end of this decade, Mercedes-Benz intends to be

all-electric wherever market conditions allow. With the

step from “Electric first” to “Electric only” we are accel-

erating the transformation and laying the foundation for

the achievement of our climate-protection goals. Further

information can be found in the Environmental Issues

section. In line with this strategy and the associated

planned sales figures for low-emission vehicles, we

facture companies on the basis of materiality consider-

ations. The operating expenses at the Group companies

that are to be taken into account are included, with the

exception of companies that have been separately dis-

closed as discontinued operations in the statement of

income.

According to the approach taken for capital expenditure, expect the share of the revenue generated by low car-

the relevant operating expenses were also examined

here for the determination of the numerator on the

bon vehicles to rise considerably in the years ahead.

basis of the materiality considerations mentioned above Capital expenditure

to determine whether they are related to the manufac-

ture of vehicles. This applies to nearly all of our operat-

ing expenses.

In order to additionally calculate the proportion of eco-

nomic activities relating to low carbon vehicles, capital

expenditure was examined to determine the extent to

which it is associated with low carbon vehicles. For

Voluntary reporting on the proportions of low carbon most of the capital expenditure relating to the industrial

vehicles (below the limit value of ꢅꢀg CO /km)

business, a direct attribution was made to all-electric or

low carbon hybrid-vehicle projects. In the case of capi-

tal expenditure in assets that are used to produce both

vehicles with combustion engines and low carbon vehi-

cles, suitable allocations based on planned vehicle

sales figures for the respective model series or vehicle

platforms were used. Our capital expenditure on low

carbon vehicles features a start of production within the

deadline specified by the EU taxonomy regulation and is

embedded in the investment planning approved by the

Board of Management and the Supervisory Board. Capi-

tal expenditure that is not directly related to the manu-

facturing process was allocated on the basis of the

planned sales figures for low carbon vehicles. With

2

B.ꢃꢃ

Proportion of

economic activities

relating to low

Proportion of

economic activities

relating to non low

carbon vehicles¹

Revenue

ꢂ%

21%

24%

9ꢃ%

ꢂ9%

ꢂ6%

Capital expenditure

Operating expenses

1

The key figures were audited in order to obtain limited assurance.

Revenue

In order to additionally calculate the proportion of eco-

nomic activities relating to low carbon vehicles, revenue regard to financial services, it is possible to match the

was examined to determine the extent to which it was

generated with low carbon vehicles. For the major pro-

portion of the revenue, in particular from the new and

used-vehicle business and leasing and sales financing

activities, a direct attribution was made of the amount

of revenue accounted for by low carbon vehicles. With

regard to other revenue components, especially reve-

nue from the spare-parts business and service and

maintenance contracts, or attribution of discounts

granted for large procurement volumes, it is not possi-

ble to directly and clearly match revenue to low carbon

additions to the leased products directly to low carbon

vehicles.

The share of capital expenditure for low carbon vehicles

is mainly impacted by the additions to the equipment

on operating leases. As a result, this share only partially

reflects our capital expenditure in sustainable products

for the future. A separate additional review of capital

expenditure in capitalised research and development

expenditure on low carbon vehicles, and capital expen-

diture in other intangible assets and property, plant and

vehicles. In these cases, suitable allocations were there- equipment of the Mercedes-Benz Group in connection

fore used for the various revenue components. These

classifications are based on current or historical vehicle

sales data or production volume data for the fleet that

is currently on the market.

with low carbon vehicles, shows much higher shares of

capital expenditure in low carbon vehicles (Table  B.34).

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On the basis of our “Electric only” strategy, we intend to

B.ꢃꢆ

significantly increase these investments in the coming

years.

Voluntary additional figures on the proportion of economic activities

at the Mercedes-Benz Group relating to low-carbon vehiclesꢊ

Capital

expenditure

Operating

Operating expenses

(CapEx) expenses (OpEx)

In order to additionally calculate the proportion of eco-

nomic activities relating to low carbon vehicles, operat-

ing expenses were examined to determine the extent to

which they are associated with low carbon vehicles. The

non-capitalised research and development expenditure

can mostly be directly incorporated into the calculation

of the numerator on the basis of its allocation to

all-electric or low carbon hybrid vehicle projects.

Appropriate allocations based on anticipated future

sales figures of the low carbon share of the model

series or the vehicle platform were used for research

and development expenditure that cannot be directly

allocated (model series or vehicle platforms that

include plug-in hybrids as well as purely combustion

Capitalised research and development

expenditure

> 40%

> ꢃ5%

Non-capitalised research and develop-

ment expenditure

> 25%

Investments in property, plant and

equipment as well as on other intangi-

ble assets

1

The key figures were audited in order to obtain limited assurance.

Tax obligation

The Mercedes-Benz Group views itself as a responsible

company that endeavours to meet all global tax obliga-

tions while also wanting to fulfil our social and ethical

responsibilities.

engine vehicles). Table



B.34 shows the component of

our expenditure on non-capitalised research and devel-

opment expenditure for low carbon vehicles. Other

components of the relevant operating expenditure were

recorded exclusively at our manufacture companies on

the basis of the materiality analyses. Here as well, it was

not possible to achieve a direct match to low carbon

vehicles. The inclusion in the numerator is based on

suitable allocations of current production volumes.

The corporate tax strategy operates according to the fol-

lowing principles in particular:

– By our actions, we aim to ensure that Group compa-

nies meet all of their tax obligations and integrity

standards through the use of measures such as effi-

cient, high-quality and reliable expertise, processes,

systems, methods and controls.

–

We live an active risk management system for the

Group and its relevant employees through the appli-

cation of an appropriate Tax Compliance Management

System (Tax CMS).

–

In line with the principle of being a “good corporate

tax citizen”, we follow legal, proactive and non-aggres-

sive tax planning activities on the basis of economic

considerations (“tax follows business”). We also strive

to work cooperatively, transparently and construc-

tively with the tax authorities. In this process, we

maintain our legal standpoints and defend our inter-

ests wherever we believe such actions are appropri-

ate and legitimate.

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The corporate tax strategy defines the limits of our

Risk and opportunity management

actions here, and this strategy is further specified and

implemented by means of organisational and con-

tent-related policies, guidelines and instructions.

Risk and opportunity management is a firm component

of the Group-wide planning, controlling and reporting

process. It is designed to support the sustained

achievement of the corporate targets and to ensure risk

awareness at the Group. Sustainability aspects are inte-

grated into the Group-wide risk management process at

the Mercedes-Benz Group. They are understood as con-

ditions, events or developments involving environmen-

tal, social or governance factors (ESG), the occurrence

of which may have an actual or potential impact on the

Mercedes-Benz Group’s profitability, cash flows and

financial position, as well as on its reputation.

The tax policies define the responsibilities, tasks and

obligations of those individuals at the Group who deal

with tax issues, and also contain specific provisions for

ensuring that legal requirements are met, thus raising

the awareness of tax issues among employees through-

out the Group. Our company’s Code of Conduct stipu-

lates that all intentional violations of internal and/or

external tax guidelines must be reported and investi-

gated. The same applies to any failure to make correc-

tions to procedures performed in an erroneous manner,

ESG-related risks and opportunities associated with the

as outlined in our internally valid Treatment of Violations Mercedes-Benz Group’s own business activities, busi-

Policy.

ness relationships and products and services, and

which are very likely to have a serious negative impact

on non-financial aspects in accordance with the CSR

Directive Implementation Act (CSR-RUG), are not cur-

rently apparent.

The Mercedes-Benz Group has established a Tax Com-

pliance Management System (Tax CMS) in order to

ensure effective tax compliance throughout the organi-

sation. The Tax CMS is a separate sub-unit of our gen-

eral Compliance Management System.

Sustainability in the supply chain

The goal of the Mercedes-Benz Group is to combine

achieving business success with acting responsibly

toward the environment, people and society — and

doing so along the entire value chain. That is because

we procure most of our raw materials indirectly, and

components and services directly, from all over the

world. It is therefore clear that our responsibility does

not end at the gates of our plants. Beginning in 20ꢃ9, we

want Mercedes-Benz AG to procure only production

The Tax CMS also operates an active tax-risk manage-

ment system with the task of monitoring and checking

whether tax obligations are being fulfilled and of sup-

porting their fulfilment. The goal of this consistent

Group-wide risk management system is to identify and

reduce tax risks at the Group, and thus the associated

personal risks that may be faced by the employees

active in this area. The system includes numerous

measures — for example, continuous monitoring of tax

risks and the incorporation of tax risk issues into the

internal control system and the Group-wide risk man-

agement process in line with our risk management poli-

cies.

materials that have been manufactured in a CO -neutral

2

fashion.

What we require from our suppliers

The Mercedes-Benz Group is committed to the respon-

sible procurement of production materials, non-produc-

tion materials and services.

We did not become aware of any material violations of

tax laws during the reporting year.

Our Supplier Sustainability Standards serve as the

guideline for our sustainable supply chain management

system. The Supplier Sustainability Standards define our

requirements for working conditions, respecting and

upholding internationally recognised human rights,

environmental protection, safety, business ethics and

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compliance, and are referenced in supplier agreements.

See the Social Compliance chapter for further informa-

tion.

supplier training courses that had been scheduled to

take place in India and Argentina were held as web-

based events due to the covid-19 pandemic.

We require that our direct suppliers recognise these

sustainability standards, communicate them to their

employees and to their upstream value chain suppliers,

and ensure their commitment. We also expect them to

check whether minimum standards are complied with.

Transparency in supply chains. Mercedes-Benz Group

is also cooperating with organisations such as CDP (for-

mer Carbon disclosure project) so that it can depict the

environmental impact of its supply chains even more

transparently. In 2021 we conducted the CDP Supply

Chain Programme for the third time. As part of this pro-

gramme, we ask our suppliers to report to us on their

environmental impact and climate protection efforts.

In addition to our Supplier Sustainability Standards, our

sustainability requirements are also enshrined in our

contracts. For example, we now utilise special procure-

ment terms and conditions — the Mercedes-Benz Group Mercedes-Benz AG’s supplier network is gradually

Special Terms — that require our suppliers to establish

processes that ensure the fulfilment of human-rights

due-diligence obligations in accordance with the provi-

sions of the UN Guiding Principles on Business and

Human Rights and the relevant OECD guidelines and

principles. We also reserve the right to examine and

audit these processes. In addition, every supplier is

required to inform us of any human-rights risks and

countermeasures it has identified. Suppliers must also

disclose to us upon request any risk hotspots that exist

along their supply chain.

adopting the Group’s climate-protection goals as formu-

lated in Ambition 20ꢃ9. By signing the “Ambition Letter”,

our suppliers assure us that they will supply the Group

only with CO -neutral products by 20ꢃ9 at the latest.

2

Reports of violations and suspected violations

We consequentially follow up on reports of violations

and suspected violations in the supply chain that are

received via the BPO or other reporting channels. If we

become aware of a suspected violation, we first bring

together all the available information and ask the sup-

pliers to respond to the allegations. We then assess the

facts of each case and take necessary corrective meas-

ures. This may mean that we work with the supplier in

question to solve the problem. However, it may also

mean that we terminate the business relationship with

that supplier. Further information about our Compliance

Programme can be found in the Integrity and Compli-

ance chapter.

Measures in the supply chain

We use a variety of measures and concepts to ensure

the fulfilment of our due diligence obligations in the

supply chain. These include supplier screenings, audits,

risk-based due diligence analyses and qualification

modules for production material suppliers. These tools

are intended to increase the transparency of the supply

chain and ensure that the internationally recognised

human rights are upheld and other social standards and

environmental requirements are met. Our procurement

units play a key role here. See the Social Compliance

chapter for further information.

Environmental issues

About one fifth of all greenhouse gas emissions in

Europe are produced as a result of the transport of peo-

ple and goods on streets and roads. The Mercedes-Benz

Group is taking deliberate measures to counteract this

trend and has made climate protection a core element

of its business strategy. Our goal is to make our entire

Training suppliers and raising their awareness. Since

2018, we have been cooperating with the “Drive Sus-

tainability” initiative on the implementation of measures

to make production material suppliers in various focus

countries more aware of the importance of sustainabil-

ity, and we also provide such suppliers with helpful

information on this issue. We selected the countries

jointly with the initiative. During the reporting year,

new vehicle fleet CO -neutral across all stages of the

2

value chain by 20ꢃ9. In order to achieve this goal, we

are transforming the products and services that are at

the heart of our business operations. We are promoting

climate protection with equal ambition in all upstream

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and downstream phases of the automotive life cycle —

In order to achieve its long-term climate-protection goal

from the supply chain and our own manufacturing oper-

ations to the use and disposal of the vehicles.

of becoming CO -neutral by 20ꢃ9, the Mercedes-Benz

2

Group is planning the complete electrification of its

product range. By the end of this decade, Mercedes-

Benz wants to be all-electric wherever market condi-

tions allow. Mercedes-Benz is accelerating the transfor-

mation to an emission-free, software-driven future with

this strategic step from “Electric first” to “Electric only”.

The EU has stipulated a 15% reduction in the CO emis-

2

sions of new heavy-duty commercial vehicles (>16 t) by

2

025 and a ꢃ0% reduction by 20ꢃ0 (as compared to

019/2020). To this end, the European Commission

worked with manufacturers, scientists and other experts We underscored this fact during the UN Climate Change

to develop a standardised simulation programme known Conference in Glasgow in November 2021, when we

as VECTO (Vehicle Energy Consumption Calculation

Tool) for all of Europe. VECTO also includes related pro-

signed the COP26 Declaration on accelerating the tran-

sition to 100% zero-emission cars and vans. In the dec-

laration, the Mercedes-Benz Group was the only Ger-

man automaker to confirm that it is working to offer only

emission-free cars and vans in leading markets as of

20ꢃ5.

cedures for testing and measuring CO emissions and

2

fuel consumption. Data are collected from all over

Europe and made transparent. Daimler Truck has

defined a technology roadmap with the aim of meeting

the EU’s requirements.

Responsibilities

As part of the effort to decarbonise transport, Daimler

Trucks & Buses relies on two complementary technolo-

gies for supplying energy to all-electric drive systems:

batteries and fuel cells.

Corporate management is responsible for setting strate-

gic goals, including targets for reducing our CO emis-

2

sions, and for monitoring the progress made in achiev-

ing these goals. The Product Steering Board (PSB) is

responsible for monitoring the development of the CO₂

emissions of the car fleet in markets in which such

emissions are regulated. It is also responsible for pro-

B.ꢃꢅ

Targets: The Mercedes-Benz Group

Target horizon

viding forecasts. The CO Project and Steering Commit-

2

tee (CO PSC) does the same for the van fleet. In its

Mercedes-Benz offers battery-electric vehicles (BEVs) in

all business areas in which the brand is represented.

2

2022

evaluations, these bodies take into account a variety of

factors, including the increasing degree of vehicle elec-

trification and the changes that have been made to

legal requirements, for example those related to the

introduction of the new WLTP certification procedure.

The PSB is assigned to the Committee for Model Policy

We are increasing the proportion of plug-in hybrids and

all-electric vehicles to as high as 50%.

2025

All new vehicle architectures are exclusively electric.

Customers are offered the choice of at least one all-elec-

tric vehicle in every segment.

2025

20ꢃ0

2

The CO emissions of the Mercedes-Benz fleet of new

vehicles has been reduced by more than 40%ꢁ

and Product Planning, while the CO PSC is assigned to

2

the Van Executive Committee. They report directly to

the Board of Management of Mercedes-Benz Group AG.

The Board of Management then decides which measures

need to be implemented. On the market side of the

equation, price and volume control measures can also

Mercedes-Benz is all-electric — wherever market condi-

tions allow.

By the end of

this decade

2

A fleet of new cars and vans that are CO -neutral along all

stages of the value chain

20ꢃ9

1

Compared to 2018, regarding the use phase (well-to-wheel); corresponding to the target

of the Science Based Targets Initiative.

affect our ability to achieve our CO targets over the

2

short term. For this reason, such measures are also dis-

cussed with the Board of Management within the frame-

work of regular reporting on the current state of CO₂

fleet compliance.

For the Mercedes-Benz Group, the Paris Agreement on

climate change represents more than just an obligation;

our commitment to these targets stems from our funda-

mental convictions and we believe it is our mission to

contribute to CO -neutral mobility around the world.

2

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All-electric product range

including vans that are registered as cars). This means

We want to accelerate the pace at which we are

expanding our range of electric vehicles. Our commit-

ment to research and development work is correspond-

ingly strong. Altogether, we want to invest more than

that we achieved the CO targets in Europe (European

2

Union, Norway and Iceland) in 2021. Since 2021, in line

with the regulatory requirements, this value has been

based on the WLTP certification process and is thus not

comparable with the prior year’s value.

€60 billion between 2022 and 2026 for the transforma-

tion towards an emission-free and software-driven

future. The expenditure of €9.1 billion on research and

development includes, among other things, R&D

expenditure for alternative drive systems such as bat-

tery-electric and plug-in hybrid drive, digitalisation and

automated driving.

United States

In the United States, fleet values are regulated by two

separate standards for limiting greenhouse gases and

fuel consumption in vehicle fleets: the Greenhouse Gas

Standard (GHG) and the Corporate Average Fuel Econ-

omy (CAFE) standard. For the 2021 model year, the GHG

Since 2018, Mercedes-Benz has been offering battery

electric vehicles under the Mercedes-EQ brand. It is

continuously expanding this brand’s portfolio through

the addition of more models. For example, in August

fleet figure is 251g CO /mi for the car fleet and 296g

2

CO /mi for the fleet of vans and SUVs registered as light

2

trucks (on the basis of the most recent forecast). We

were therefore not able to achieve our average fleet tar-

gets of 194g CO /mi for the car fleet and 259g CO /mi

2021, our car segment launched the EQS, the first

2

all-electric luxury saloon on the market. The EQA offers

all-electric driving for the compact class. The new EQB

is a seven-seater that offers space for many types of

families and meets a wide variety of transport needs.

Plug-in hybrids are an important transitional technology

for the fleet of vans and SUVs registered as light trucks.

However, the remaining difference was offset through

the purchase of external credits.

China

on the road to CO -neutral all-electric mobility.

In China, domestic and imported cars are reported sep-

2

Mercedes-Benz offers an efficient drive-system package arately and according to fleet consumption values,

for this purpose: at the end of 2021, customers could

choose between more than 20 model variants.

Mercedes-Benz also offers a wide variety of transport

solutions that do not produce local emissions for the

commercial vans sector. Mercedes-Benz Trucks cele-

brated the world premiere of the eActros in June 2021;

series production began in the autumn of 2021 at the

plant in Wörth am Rhein.

unlike in Europe and the United States. This means the

figures for the imported fleet are the relevant figures for

our wholly owned subsidiary Mercedes-Benz China

(MBCL). The target was ꢂ.16 l/100km; the figure that was

actually achieved was 8.24 l/100km (preliminary fleet

consumption value — the final fleet consumption value

might be better if off-cycle technologies are included).

Since 2021, in line with the regulatory requirements, this

value has been based on the WLTP certification process

and is thus not comparable with the prior year’s value.

We will purchase external credits at short notice in

order to close consumption gaps in the fleet’s target

achievement. The aim of the portfolio expansion for

all-electric vehicles and plug-in hybrids is to achieve

the emission targets in China in the medium term,

together with the joint-venture partner Beijing Benz

Automotive Co., Ltd. (BBAC).

Development of CO emissions

2

Europe

The Mercedes-Benz Group has defined the CO emis-

2

sions of its total new passenger car fleet in Europe as a

significant non-financial performance indicator. For

more information on how we expect the CO emissions

2

of our car fleet in Europe to develop, see the Outlook

chapter.

More environmentally friendly production

In the reporting year, the average CO emissions of our

Not only the use of resources in vehicles but also the

consumption of resources in production plays an impor-

tant role in the environmental compatibility of vehicles.

For this reason, the Mercedes-Benz Group is working

2

total passenger car fleet in Europe (European Union,

Norway and Iceland) as measured on the basis of legal

regulations decreased to an estimated 115g/km (WLTP,

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continuously to make production more efficient and

B.ꢃ6

more environmentally friendly. One important lever for

reaching this goal is our measures to increase our

energy efficiency. By becoming more energy-efficient,

we are decreasing our energy consumption and con-

Targets

Target horizon

Partnership with the employees

Ensure permanently constructive cooperation between

company and employee representative bodies.

Ongoing

serving resources, while reducing the CO emissions of

Ensure remuneration structures in line with market rates

through compliance with our global Corporate Compensa-

tion Policy.

2

our production processes. We also want to reduce our

water consumption, for example, by means of closed

water cycles. Conserving resources also means reducing

waste volumes. Accordingly, we are intensifying our

efforts to use lower volumes of raw materials and other

materials at our plants. We are also involving external

partners to help us successfully implement our efficien-

cy-enhancement measures.

Further develop our Leadership Principles and Culture in

order to boost agility, increase the pace of innovation and

safeguard the stability of business operations.

Support and enhance flexible and modern working-time

arrangements in order to utilise the advantages of new

forms of work. The focus this year is on hybrid work.

Training and professional development

Ensure the high quality of our training programmes.

Ongoing

Empower employees to work successfully within the digital

transformation.

In order to ensure efficient, high-quality, legally compli-

ant and environmentally friendly manufacturing opera-

tions, we have established environmental management

systems in accordance with EMAS or ISO 14001 at our

production sites. Since 2012, we have also introduced

energy management systems certified in accordance

with the DIN EN ISO 50001 standard at our German pro-

duction sites. These energy management systems are

certified at regular intervals. We are currently also

implementing ISO 50001 systems at a number of indi-

vidual sites outside Germany. In accordance with the

standard, we have embedded environmental and energy

management within our organisation.

Diversity and equal opportunity

Increase the proportion of women in senior management

positions¹ (increase of one percentage point each year).

2021

Equal opportunity for all employees in our company.

Ongoing

Health and occupational safety

Curb the spread of covid-19 and keep business operations

running.

2021

Ensure employees can work in a safe and healthy environ-

ment.

Ongoing

1

Management Level 3 and higher — Mercedes-Benz Group worldwide (headcounts, fully

consolidated companies)

The effectiveness of the management systems is moni-

tored by external auditors as part of the certification

process (ISO 14001, EMAS, ISO 50001), as well in the

environmental sector by internal environmental risk

assessments (environmental due diligence process). We

also have a standardised process in place for inspecting

and assessing the Group’s consolidated production

sites every five years. The results of this process are

reported to the respective plant and company manage-

ment so that any necessary optimisations can be car-

ried out. Travel restrictions and lockdown regulations

due to the covid-19 pandemic prevented the site

inspections from taking place as planned in 2020 and

Employee issues

The automotive industry is undergoing a fundamental

transformation that, among other things, encompasses

the areas of electrification, digitalisation, automated

driving, connected urban mobility and sustainability.

This is not only changing the products of the

Mercedes-Benz Group, it is thoroughly changing the val-

ue-creation and working processes as well as job pro-

files.

We know that our employees are a key element of the

Group’s success. A total of 1ꢂ2,425 employees through-

out the world (as of ꢃ1 December 2021; headcounts,

workforce excluding temporary workers during holidays,

interns, integrated master’s degree students, trainees,

senior experts and working students) contribute to the

2021. The inspections that had to be cancelled will now

be carried out over the next few years so that the

Mercedes-Benz Group can retain the five-year cycle. We

are continuing the internal reporting process and our

controlling of the improvement measures as before.

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Group’s development with their skills, ideas and motiva-

tion. That is why we want to treat our employees as

partners.

Notifications about suspicious cases are sent to the

BPO, which examines them and conducts an investiga-

tion if there is a high-risk case. High-risk rule violations

include, for example, offences relating to corruption,

breaches of antitrust law and violations of anti-money

laundering regulations, as well as violations of binding

technical provisions and environmental protection laws

In order to remain competitive over the long term, the

Group enables its employees to develop both profes-

sionally and personally. To this end, we are steadily

enhancing our qualification offers, creating new job pro- and severe cases of discrimination and racism.

files and sharpening the requirements profiles. We are

also fulfilling our duty of care for our employees,

because we want to provide them with a healthy and

safe working environment.

Furthermore, the Mercedes-Benz Group also recognises

its social responsibilities and the ten principles on

which the UN Global Compact (UNGC) is based. As a

participant in the UNGC, we commit ourselves, among

other things, to respecting key employee rights ranging

We seek to promote a diverse and inclusive corporate

and management culture throughout the Group. Particu- from the provision of equal opportunities to the right to

larly in challenging times, respectful and trust-based

cooperation between the workforce and the manage-

ment is extremely important. In this way, our employees

can get involved and thus contribute to the successful

transformation of our company.

receive equal pay for equal work.

Dialogue with employee representatives

Corporate management and the employee representa-

tive body maintain an ongoing dialogue. The rights of

our employees are defined, among other things, in a

number of plant and company-wide agreements. These

agreements address topics such as mobile working,

family leave and home health care.

Partnership with the employees

We want to structure our decision-making processes in

a manner that ensures transparency for our employees,

and to enable them to participate in decision-making

processes. In doing so, we respect our interests and get

each other actively involved in the Group’s affairs. Our

policies and company agreements establish rules for

how we take on responsibility in our employee relation-

ships.

For example, we signed an agreement that gives the

employees at Mercedes-Benz Group AG (then operating

under the name Daimler AG), Mercedes-Benz AG, Daimler

Truck AG, and Daimler Brand & IP Management GmbH &

Co. KG a job-security guarantee for the period until 2029.

The spin-off and hive-down of the Daimler commercial

vehicle business does not affect the validity of the

job-security guarantee until 2029. In addition to this

agreement, corporate management and the employee

representative body concluded a company-wide agree-

ment in July 2020 that would make it possible to reduce

labour costs in the period until the end of December

2021. This agreement was concluded in response to the

various challenges associated with both the transforma-

tion of the automotive industry and the covid-19 pan-

demic. The company-wide agreement applies, among

other things, to all employees at Mercedes-Benz

Group AG, Mercedes-Benz AG, Daimler Truck AG, Daimler

Brand & IP Management GmbH & Co. KG and Daimler

Gastronomie GmbH in Germany.

Entrenching work and social standards

In 2002, Mercedes-Benz Group AG (then operating

under the name DaimlerChrysler AG) issued its own

Group-wide Principles of Social Responsibility, which

are based on the International Labour Organization’s

(

ILO) work and social standards. These principles were

completely reworked and comprehensively extended in

021 and republished as the Principles of Social

2

Responsibility and Human Rights.

As early as 2006, the then Daimler AG set up the Busi-

ness Practices Office (BPO) whistleblower system in

order to fairly and appropriately investigate violations of

legal and in-house regulations that pose a high risk for

the Group and its employees. The BPO is still active and

has been enhanced further since its inception. These

regulations also include the aforementioned Principles.

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In addition, the former Daimler AG, as well as Mercedes- The variable remuneration of management (Company

Benz AG, Daimler Truck AG and Daimler Brand & IP Man-

agement GmbH & Co. KG, decided to enable all employ-

ees subject to collective bargaining agreements to

participate in the success of 2020 and signed a corre-

sponding agreement with the General Works Council.

This profit-sharing bonus was paid to the workforce in

April 2021 as recognition for its extraordinary perfor-

mance.

Bonus) of Levels 1–ꢃ and Level 4 executives is based not

only on financial targets but also on transformation

goals and non-financial targets. The transformation

component of the 2021 Company Bonus included CO₂

targets, for example. Additional remuneration-related

non-financial targets pertained, among other things, to

integrity and diversity.

Further development of the management culture

Cooperation with trade unions

The company believes that the interplay of strategy and

We acknowledge our employees’ right to form employee corporate culture offers a key competitive advantage.

representative bodies and conduct collective bargaining We therefore work constantly to improve our manage-

in order to regulate working conditions. We also recog-

nise their right to strike in accordance with the applica-

ble laws. We work together intensively with the

employee representative bodies and the trade unions

so that they can exercise this right. Important partners

here include the local works councils, the European

Works Council and the World Employee Committee

ment culture and the way we cooperate.

The Leadership 2020 initiative that we launched back in

2016 laid the basis for the Group’s future success. Work-

ing groups with a diverse composition of employees

and managers agreed with the Board of Management on

what we understand by good leadership (Leadership

Principles) and which structural changes and tools we

need in order to transform the way we work (Game

Changers). Since 2020, we have been using the initia-

tive as a basis for Leadership 20X. In doing so, we are

focusing on the empowerment and the mutual network-

ing of employees and managers during the transforma-

tion process. In this way, we are promoting a close

interplay between strategy and corporate culture. The

units use the shared basis of our Leadership Principles

to focus on their own specific areas and develop meas-

ures to be taken.

(WEC). Collective bargaining agreements exist for the

majority of our employees throughout the Group. Such

agreements apply to all employees subject to collective

bargaining agreements at Mercedes-Benz Group AG and

Mercedes-Benz AG and at other units at the Group.

Remuneration systems

The Group remunerates work in accordance with the

same principles at all companies of the Group around

the world. Our Corporate Compensation Policy, which is

valid for all groups of employees, establishes the frame-

work conditions and minimum requirements for the

design of the remuneration systems. Among other

things, it stipulates that the amount of the remuneration

is determined on the basis of the requirements of the

job profile in question (taking into account, for example,

the person’s knowledge, expertise, responsibilities and

decision-making authority) and, where appropriate, per-

formance. However, it does not take account of gender,

origin or other personal characteristics. The internal

auditing department conducts random annual internal

audits to determine if selected aspects of the guideline

are being complied with. In doing so, we also take into

We intend to continue this work over the long term,

even though the Leadership 20X initiative was con-

cluded in 2021. The Leadership Principles have also

been incorporated as general principles of coopera-

tion — “People Principles” — into our processes for

rules and culture and are now being used as a basis for

our Human Resources Strategy. To this end, we have

established eight Leadership Principles as a shared

guideline for the actions of all of the Group’s employees:

Pioneering Spirit, Agility, Purpose, Empowerment, Cus-

tomer Orientation, Co-Creation, Learning and Driven to

consideration local market conditions, because we want Win. These principles serve as the basis for our cooper-

to offer our employees salaries and benefits that are

customary in the industry and the respective markets.

ation and help to make the company even faster, more

effective and more flexible, and boost its innovative

potential.

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The Mercedes-Benz Group is undergoing a transforma-

long-term agreements during the reporting year and

anchoring them in company agreements. Among other

things, we agreed on a qualification offensive and on

joint efforts to overcome the difficult economic situa-

tion associated with the pandemic.

tion that applies to products as well as to the organisa-

tion and the employees. To ensure that this transforma-

tion is successful in the long run, we need a cultural

change as well as a technical one and a strategic one.

The leadership requirements have changed in particular.

That’s why our Leadership Principles are key elements in As a participant in the UN Global Compact, the Group

our HR processes. We take them into account in order

to enable managers to perform their important roles in

has committed itself to the compact’s ten principles. As

a result, we commit ourselves, among other things, to

the company’s cultural and strategic transformation. Our the right to equal pay for equal work. The framework for

Leadership Principles also serve as the basis for our

global network, whose members act as role models

tasked with promoting the changes in their respective

areas and putting them into practice. This network con-

sists of experts and volunteers, some of whom were

previously active in the Leadership 2020 initiative, and

who are now helping their colleagues and managers

this is provided by our Corporate Compensation Policy.

We did not become aware of any material violations of

the Corporate Compensation Policy during the reporting

year.

In 2021, the expenses for employees in the Group

worldwide (including the expenses for Trucks & Buses

tackle the current change processes. To do this, they are until 9 December 2021) amounted to:

developing specific formats and initiatives for the vari-

ous parts of the company in order to support the

Group’s realignment and jointly promote its cultural and

strategic transformation.

– €18.528 billion on wages and salaries

– €ꢃ.ꢃ5ꢂ billion on social welfare services, and

The new hybrid world of work poses different chal-

lenges for our leadership culture. We offer our manag-

ers in-class and virtual training courses about the

opportunities and framework conditions of leadership

in order to ensure the type of leadership that is in tune

with the times.

– €1.00ꢃ billion on retirement benefits for a workforce

numbering 250,ꢂ68 on average (including temporary

workers during holidays).

During the reporting period, an external party honoured

us for our commitment to leadership measures. Specifi-

cally, the international EFMD Excellence in Practice

Award 2021 was presented to us in Gold for our compre-

hensive manager qualification programme, Leading

Transformation. This award is presented by the Euro-

pean Foundation for Management Development (EFMD)

and recognises outstanding achievements in the

Results

The Group-wide employee survey is a key indicator of

where we currently stand from the point of view of our

employees and what we need to do to improve the

Group in the future. We generally conduct the survey at

least every two years. However, the covid-19 pandemic

domains of Leadership, Professional, Talent and Organi-

caused the 2020 employee survey to be pushed back to sational Development. Moreover, the team that bears

2

021, when it was carried out.

central responsibility for manager development at the

Group came in second for the St. Gallen Leadership

Award 2021 for its Leading Transformation initiative.

The covid-19 pandemic and the transformation of the

economy created challenging tasks for many companies

also in 2021. It has therefore become apparent how

important a constructive partnership is between the

workforce and the management, as well as between the

Company and the employee representative body,

because this is the only way that viable solutions can be

found. For example, the Company and the employee

representative body once again succeeded in reaching

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The sustained impact of the Leading Transformation ini-

The digital transformation and professional

tiative, which was launched in 2020, was also apparent

during the reporting year. The specialist units continue

to request the colleagues from the moderator and sup-

port network for their events. The content and formats

are used for unit-specific events.

requirements

The digital transformation at the Group is changing many

requirements profiles and making it necessary for staff

in many positions to gain new expertise. Here, we are

relying on a wide range of needs-based qualification

measures for our employees, as well as the targeted

recruitment of young talent with digital expertise.

Training and professional development

Due to electric mobility and digitalisation, we are cur-

rently experiencing the greatest ever structural change

in the history of the automotive industry. This is associ-

ated with the far-reaching transformation of the Group.

Job descriptions, tasks and requirements profiles are

also changing as a result, which is transforming the

qualifications required for many positions, affecting

employees as well as managers. The knowledge and

skills of our employees are the foundation of our Com-

During the covid-19 pandemic, we have comprehen-

sively digitalised our multidisciplinary qualification pro-

grammes in Germany, as well as the specialised meas-

ures offered around the world by administrative

departments such as Human Resources, IT, Finance and

Controlling, Procurement. We have defined new ways of

working, digitalisation, transformation and innovation as

the strategic focal points for the multidisciplinary pro-

pany’s worldwide success. That is why we want to invest grammes in Germany.

extensively in their training and professional develop-

ment and optimise our HR development programmes.

We are also further developing the range of professions

in which we offer training in Germany, and are enhanc-

ing the spectrum of dual work-study programmes at

German universities.

We are also developing a management culture and

organisation that are geared towards the digital trans-

formation, and we are supporting the digital transforma-

tion by offering suitable qualification measures for the

entire workforce.

How will our workforce develop over the next ten

years — and which key qualifications and skills will we

need in the future in order to successfully complete the

transformation? These are important questions that we

are addressing with the help of the Strategic Resource

Management system at Mercedes-Benz AG.

Trainees and students

Our Training System has standardised training content

for all sites and units in Germany. A responsible body

regularly checks to see that the content is user friendly

and up to date and that duplication does not occur. Our

goal here is to ensure the high quality and efficiency of

our training programmes.

For example, Mercedes-Benz Group AG, Mercedes-

Benz AG and Daimler Brand & IP Management GmbH &

Co. KG in Germany control training and qualification

processes through an overarching set of rules and regu-

lations. From the Board of Management to our training

The Group also offers dual work-study programmes for

internationally recognised bachelor courses of study at

various Group sites throughout Germany. The lectures

are supplemented by practical assignments in Germany

and qualification units and the trainers at the plant level, and abroad. Because of covid-19, there were no assign-

we pursue the goal of safeguarding our competitiveness

throughout the Group.

ments outside Germany in 2021.

Our training programmes are fundamentally needs-

based and we continuously review our portfolio of train-

ing professions and courses of study in Germany.

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Results

diversity. The Mercedes-Benz Group stands for open-

minded cooperation in which there is no place for dis-

crimination. This is embedded, for example, in our

Integrity Code and the Principles of Social Responsibil-

ity and Human Rights. Diversity and inclusion manage-

ment is grounded in the principle of equal opportunity

for all employees.

The company seeks to ensure that its training pro-

grammes are up to date and thus of high quality. This is

why we have redefined our portfolio of training profes-

sions for the Dual University in Germany for the period

until 2025 and correspondingly adjusted the courses of

study as well as the number of people recruited. For

example, we have analysed our training programmes for

IT professions and expanded them to include digital

professions for IT in the commercial area, and we have

also introduced a course of study that focuses on the

Our goal is to attract the most highly qualified special-

ists and managers to our company and support their

professional development, regardless of their age, eth-

interface between IT and electrical engineering (embed- nicity, gender, sexual orientation and identity, and any

ded systems). This also involves the design and launch

of new internal qualification components for our train-

ees that address topics such as cybersecurity, program-

ming and data-based action. These components also

include extensive qualification programmes for the

trainers themselves.

physical limitations they may have.

As early as 2006, the Group set itself the goal of contin-

uously increasing the proportion of women in executive

positions.

Active diversity management at the Group

During the reporting year, our professional development The Mercedes-Benz Group expects its employees to

activities focused once again on IT skills and profes-

sions as well as high-voltage and battery technology.

We also further expanded our range of digital learning

formats. One example of such a digital learning format

is the Digital Readiness Programme, which focuses on

the transformation and methodological, technical and

cultural aspects of digitalisation.

treat one another in a respectful, open and fair manner.

Managers serve as role models here and thus have a

special responsibility for ensuring a corporate culture

marked by appreciation.

Our Integrity and Diversity & Inclusion units design the

framework and processes for such a culture. Diversity &

Inclusion Management is a corporate function that is

part of the Group’s Human Resources organisation. It

defines strategic areas of action in cooperation with

various departments and initiates Group-wide projects,

training programmes and measures to increase aware-

ness of the importance of diversity.

In 2020, we launched a programme known as “Leading

Transformation” for managers around the globe. The

programme’s participants examined various challenges

the transformation presents to the Group and their own

areas of responsibility over a period of four months.

During the reporting year, we launched an additional

programme component that supports managers with

issues relating to the transformation and innovation in

their units and teams.

Diversity Day

Each year, the Group devotes a day specifically to the

topic of diversity: the in-house Diversity Day. Con-

sciously experiencing diversity, taking in new perspec-

tives and understanding how all employees can profit

from diversity and inclusion management — these are

central objectives of Diversity Day.

Diversity and equal opportunity

Our workforce is as diverse as our customers, and we

are convinced that diversity makes us more successful

as a company, because diversity helps to find new view-

points and acts as a driving force behind creative ideas

Diversity Day took place for the ninth time in the report-

and innovations. By means of appropriate measures and ing year under the motto “Lots achieved, lots to do! Why

activities, we promote a working environment in which

all of our employees can develop and make full use of

their talent — regardless of their age, gender, sexual ori-

entation or any other characteristic that relates to

diversity needs an inclusive culture.” The various events,

which were held online, included discussions with the

Board of Management; employees could submit ques-

tions in advance of the events.

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Awareness-raising and qualification measures for

employees

example, we design our workplaces in line with ergo-

nomic criteria and offer health maintenance pro-

grammes and occupational safety training.

The Mercedes-Benz Group utilises various measures to

make employees around the world more aware of issues

relating to diversity and inclusion. Since May 2021, for

example, we have been using an e-learning tool that

aims to increase awareness of the need for appreciative

interaction as well as possible obstacles, and to show

The covid-19 pandemic is not the only reason why it is

so important to have a sustainable occupational health

and safety management system in place, as the demo-

graphic transformation and advances in technology are

how each employee can contribute to this development. also leading to new challenges. To this end, we utilise a

Through the use of case studies, the participants learn

about effective methods for eliminating their own preju-

holistic occupational health and safety management

system. The focus here is mainly on preventive meas-

dices and various approaches to conflict resolution. This ures that we continuously review and develop further.

training programme is available to all employees world-

wide and is offered in 11 languages.

Requirements, policies, guidelines, organisation and

responsibilities

Results

The Mercedes-Benz Group’s occupational safety strat-

egy includes standards for the design of workplaces and

work processes. Moreover, we are systematically striv-

ing to reduce occupational and health-related risks. The

Group operates on the basis of globally uniform guide-

lines for risk prevention. The Group’s occupational

health and safety policy and occupational health and

safety guidelines serve as overarching, internationally

valid Group regulations. They are based on international

As early as 2006, the Group set itself the target of con-

tinuously and sustainably increasing the proportion of

women in executive positions at the Group to 20% by

the end of 2020. This goal was achieved, and our plan

for 2021 and beyond is to further increase the propor-

tion of women in executive positions at the Group by

one percentage point each year. We achieved this goal

during the reporting year. As of ꢃ1 December 2021,

women occupied 22.5% of the senior management posi- standards and national laws and emphasise the manag-

tions (Level ꢃ and higher) at the Mercedes-Benz Group

worldwide (headcounts, consolidated companies).

These data are only for the Mercedes-Benz Group. Due

to the spin-off and hive-down of the Daimler commer-

cial vehicle business in December 2021 these data are

not comparable with the data from the previous years.

We use relevant data from our human resources report-

ing systems to review the progress we make in increas-

ing the proportion of women in top management posi-

tions. The results are reported to the Board of

ers’ obligation to act responsibly. Moreover, they under-

score the employees’ own responsibility.

In 2019, the Group also committed itself to “Vision Zero”.

This global campaign aims to prevent job-related acci-

dents and illnesses while also promoting employees’

health, safety and well-being.

Occupational health and safety issues throughout the

Group are managed by the Health & Safety unit, which is

part of Human Resources and under the direction of the

Chief Group Physician. Occupational health and safety

issues are also discussed on a regular basis in various

committees, such as the Occupational Safety, Environ-

ment and Health Commission, as well as with works

council representatives and management representa-

tives at the various levels of the Group. All decisions

resulting from such discussions are made jointly.

Management in a standardised form on a regular basis.

The diversity concepts employed for the Board of Man-

agement and the Supervisory Board are presented in

the Corporate Governance Report.

Occupational health and safety

The company wants to ensure its employees can work in

a safe and healthy environment. Our overarching goal is

therefore to prevent health risks and maintain the

health of all of our employees over the long term. For

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Company health management and mental health

targeted manner to unforeseen events such as another

pandemic in the future, and thus to be less vulnerable

to crises.

The Group offers employees in Germany occupational

health advice and screening as well as measures and

services of our own health programme and social coun-

selling service. We want to promote both the mental

Risk management

and physical health of our employees with our company The Mercedes-Benz Group wants to prevent its employ-

health management system in Germany. This objective

is promoted with the help of campaigns, counselling

and qualification offerings, as well as with preventive,

therapeutic and rehabilitation measures. During the

reporting year, a Group-wide mental health agreement

was reached for Germany with the goal of maintaining

and promoting the employees’ mental health. Interna-

tionally, our focus is on medical care as well as on the

coordination of pandemic-related measures and pre-

vention strategies, and ergonomics.

ees from experiencing accidents or impaired health. The

Health & Safety unit is therefore pursuing a preventive

approach so that it can assess the potential risks of

workplaces and work processes at an early stage. Our

Group’s production plants have a safety risk manage-

ment system that is aligned with our Policy on Occupa-

tional Health and Safety. Instruments and risk assess-

ment processes that are implemented at the local level

have also been defined.

In order to review whether the corporate policies

regarding occupational health and safety have been

duly implemented, each site that generally employs

more than 500 people or has a corresponding risk level

is visited approximately every five years. A standardised

process is used here to conduct the associated evalua-

tions.

Dealing with covid-ꢁꢈ

In order to curb the spread of covid-19, employees at

our sites were provided with information on the specific

measures and rules that were put into effect in order to

protect them against infection. We also implemented

official recommendations, such as those issued by the

Robert Koch Institute (RKI) in Germany, for example.

This applies to both the reporting period and thereafter.

The introduction of approved vaccines enabled us to

provide eligible employees at German sites with vacci-

nations in line with the German government’s vaccina-

tion campaign. Company doctors and medical profes-

sionals performed the vaccinations at the sites in

Germany. Beginning in mid-November, the Group again

offered first and second doses. Booster shots were also

provided, beginning in December.

Digital risk assessment

Risk assessments are an important tool with which the

Group can evaluate potential risks. We have digitalised

parts of this risk management process using an online

tool that is being made available all over the world. The

tool is provided by the European Agency for Safety and

Health at Work (EU-OSHA) and was expanded for the

Group’s purposes. It shows the user-specific risks that

can arise in a particular area. The user then only needs

to decide whether the suggested measures suffice to

reduce the risk to an acceptable level. This risk assess-

ment is then used as a basis for automatically generat-

In 2020, the Group introduced a global accident and

emergency documentation system which includes an

integrated digital reporting process for emergencies that ing instruction documents.

enables the rapid documentation of all covid-19 cases

among the employees and thus a fast follow-up of pos-

sible contacts by the plant medical service and manag-

ers. In 2021, this depiction of infection chains helped to

reduce the spread of covid-19 at the Group. Moreover,

the system was enhanced further during the reporting

year. Among other things, the data can now be evalu-

ated and analysed even better while also complying

with data protection laws. The improved functionality

helps us to respond more quickly and in a more

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Raising awareness of occupational safety issues

B.ꢃꢇ

The Mercedes-Benz Group is increasingly using media

such as videos, various information portals and online

training courses in order to make its employees more

aware of ergonomics and occupational safety issues.

New employees are provided with initial instructions

regarding the safety-relevant aspects of their work-

places. After that, they are required to participate in

safety-awareness briefings that are held on a regular

basis.

Target

Target horizon

2022

Make lobbying activities verifiable and transparent on the

basis of defined evaluation criteria

Milestone: develop an evaluation concept to determine

the current position

2021

Milestone: continue stakeholder interviews and derive

necessary measures for future lobbying

2022

Social issues

Results

An extensive package of measures, which include safety

and hygiene rules, testing strategies and offers of vacci-

nation, have been implemented in an attempt to protect

our employees as well as possible. In addition, we have

helped to curb the spread of the pandemic.

Human beings can only overcome the major social and

environmental challenges we face, such as climate

change and increasing urbanisation, by working

together. The Group is making its contribution here. It is

contributing its expertise to the social dialogue and is

working on solutions together with representatives of

governments, business and society.

Some sites were unable to extend the voluntary

ISO 45001 certificate due to the pandemic, among other

reasons. For the protection of our workforce, the pres-

ence of external persons at the production areas was

limited to the minimum necessary for their operation.

Irrespective of any external certification audits, about

every five years, the safety standards at the Group-

owned production facilities are reviewed to check

whether they comply with those of our binding corpo-

rate policy concerning occupational health and safety

and whether a functioning occupational health and

safety management system is in place. No routine

Mercedes-Benz site audits were planned as part of our

Safety Risk Management during the reporting year. As a

result, there were no pandemic-related omissions that

have to be made up for at a later date. The Mercedes-

Benz Group utilises several accident documentation

systems worldwide. These systems generate standard-

ised statistics while taking applicable data protection

regulations into account. This information is used as the

basis for monthly reports of the Group’s accident statis-

tics.

The Group wishes to take part in political and public

opinion-shaping processes as a trustworthy and

dependable discussion partner. The overarching goal of

our approach is the long-term harmonisation of the

Group’s interests with the interests of society at large.

Responsible representation of our interests

The Group has defined its own principles for political

dialogue and the responsible communication of our

interests. These are political restraint, balance and neu-

trality in our dealings with political parties, members of

parliament and government officials.

Various instruments are used to ensure that the political

representation of our interests is carried out in accord-

ance with applicable regulations and ethical standards.

In our work as a member of industry associations and in

our cooperation with other companies, we pay particu-

lar attention to antitrust regulations. Internally binding

requirements have also been laid down in various docu-

ments, including the Group’s Integrity Code.

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In addition, our Lobbying, Political Contributions and

Central coordination office

Party Donations policy governs grants, donations to

political parties, and the use of other instruments for

representing our interests in the political realm. The

employees can find these policies in the policy data-

base on the intranet. The Mercedes-Benz Group is also

The External Affairs and Public Policy (EA) unit is our

central coordinating body for political dialogue at the

national and international levels. It is located in Stutt-

gart and falls under the responsibility of the Chairman of

the Board of Management. The EA unit shapes the

listed (currently as Daimler AG) in the Transparency Reg- Group’s relations via a global network with offices in

ister of the European Union and commits to the regis-

ter’s Code of Conduct. Furthermore, the decision of the

German Bundestag to establish a lobbying register at

the national level starting in 2022 was also welcomed.

Berlin, Brussels, Beijing and Washington, as well as cor-

porate representations in our markets.

Thematic focal points

The Mercedes-Benz Group’s specific aim in the discus-

sions with political decision-makers is to find sustaina-

ble solutions for social challenges and thus achieve

greater planning security for the company. During the

reporting year, the discussions focused on the following

topics:

The policies mentioned above also define how to

address risks in connection with the political rep-

resentation of our interests. These risks are also

addressed through Group-wide established compliance

processes. Complaints and information relating to our

Group’s lobbying activities can be addressed to the

Business Practices Office (BPO) whistleblower system.

– Achieving climate targets and improving air quality

–

Making cities more liveable places

In order to comply with the legal requirements and

in-house policies, mandatory training courses are regu-

– Improving traffic safety

– Establishing standards for human-rights due diligence

larly conducted for employees of Mercedes-Benz Group – Sustainable financing

companies. The Integrity and Legal Affairs unit contacts – Site-specific issues

the corresponding target groups that are required to

complete the training courses. These training courses

can usually be completed online as self-study courses.

Employees who are politically active in their role — as a

plant director, for example — receive additional training

for their tasks.

– Free and fair trade

– Contributing to the drafting of labour legislation

For the Mercedes-Benz Group, the Paris Agreement on

climate change represents more than an obligation; our

commitment to its targets stems from our fundamental

B.ꢃꢄ

Examples of instruments of stakeholder dialogue

Information

Dialogue

– Annual “Sustainability Dialogue” (Germany/

Participation

–

Sustainability Report as well as regional

reports (such as the China Sustainability

Report)

Environmental declarations by the plants

Press and public-relations work

Corporate website

– Stakeholder consultation in topic-related

working groups

– Advisory Board for Integrity and

Sustainability

– Peer review within the framework of

sustainability initiatives such as the UN

Global Compact

regions)

– Local dialogue with residents and municipali-

ties

– Internal dialogue sessions on integrity and

compliance

–

Blogs and social media

– Supplier Portal

Employee portal and internal communication

Plant tours, receptions,

– Membership of sustainability initiatives and

networks

Mercedes-Benz Museum

– Specialist conferences on societal topics and

debates

–

Topic- and project-related discussions

Dialogue formats on future-oriented ques-

tions: think tanks, hackathons, ideation chal-

lenges

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convictions. Our political lobbying activities and part-

The company also holds discussions with its stakehold-

ers at the level of our locations. In connection with spe-

cific occasions and projects, the Group addresses ques-

tions, concerns, criticism and suggestions made by

stakeholders and enters into an open-ended dialogue

with them. For example, during the reporting period, we

presented our considerations regarding land use meas-

ures for the Untertürkheim plant to the Stuttgart City

Council and brought about measures for further devel-

opment. In addition, the top-level meeting of the state

government of Baden-Württemberg’s strategic dialogue

for the automotive industry took place in October 2021.

nerships are in line with this conviction and the cli-

mate-protection goals agreed upon in the Paris Agree-

ment.

Party donations and political contributions

The Group did not make any financial or non-financial

contributions to political parties during the reporting

period. This decision was not based on current political

or economic events.

Evaluation concept

During the reporting year, an evaluation concept for ver- The objective of the meeting was to facilitate an

ifying the lobbying activities and making them transpar- exchange between all of the institutions and companies

ent was developed, working in conjunction with external participating in the strategic dialogue and to discuss

consultants. The concept is based on a scientific foun- current challenges relevant to the transformation of the

dation. We decided to use anonymised interviews in our automobile industry.

methodology. The target group comprises both internal

and external stakeholders, including representatives of

NGOs, think tanks and associations, as well as of gov-

ernment and administrative bodies. We interviewed the

first set of stakeholders in 2021.

Dialogue formats

The Group utilises various dialogue formats to engage in

a dialogue with relevant stakeholders. For example, the

Sustainability Dialogues are organised annually and

stakeholder surveys, specialist conferences and the-

matic dialogue sessions are conducted. On the other

hand, the latest discussions in the public sphere are fol-

lowed. The Group participates in sector-specific and

overarching networks and initiatives in order to deter-

mine what the associated expectations are. Studies and

other scientific publications are also evaluated and

media analyses are conducted. These measures help

the Group to identify developments and the associated

expectations in areas beyond the dialogue events that

have been initiated.

Stakeholder dialogue

The Mercedes-Benz Group attaches great importance to

continuing the dialogue with its interest groups. This

enables the Group to consider various perspectives on

its involvement with sustainability issues, to identify

and address new trends, and to share experiences. We

also want to engage in discussions of controversial top-

ics at an early stage. We focus on conducting a dialogue

that is fruitful and productive for all parties involved.

Knowledge of the stakeholders is a prerequisite for this.

Stakeholders are individuals and organisations that

have legal, financial, ethical or ecological claims on or

expectations of the Group. Whether an individual,

organisation or group is a stakeholder of the Group

depends on the extent to which the Group’s decisions

influence it or, conversely, the extent to which it can

influence the Group’s decisions. Thus the primary stake-

holders are customers, employees, investors and sup-

pliers. Regular communication also takes place with

groups in civil society such as non-governmental organ-

isations, as well as associations, trade unions, the

Sustainability Dialogue. One essential tool of the dia-

logue with the stakeholders is the Sustainability Dia-

logue, which has been held annually in Stuttgart since

2008 and brings various stakeholder groups together

with members of the Group’s Board of Management and

executive management. The participants attend a range

of workshops, where they discuss selected issues

related to sustainability and work together to further

develop their approaches. The personnel responsible for

specific topics take up the momentum generated by the

participants and work together with the stakeholders to

media, analysts, municipalities, residents in the commu- incorporate these ideas into their work. They then

nities where the Group operates and representatives of

the scientific community and government.

report at the event in the following year on the progress

made in the interim.

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In 2021, as in the previous year, the two-day Sustaina-

of information and opinions between the Advisory

Board, members of the Board of Management and com-

pany managers and employees takes place in other

meetings devoted to specific topics. In 2021, the body

dealt with a range of issues, among them social compli-

bility Dialogue was held via a digital meeting platform

due to the pandemic. Five representatives of the Board

of Management of Mercedes-Benz Group AG presented

a report on the situation. The public section of the

meeting on the first day was broadcast over the Internet ance, sustainable finance and the transformation of the

for the first time. More than ꢂ00 interested viewers fol-

lowed the panel discussions live and were able to join

the discussion and pose questions via a platform. More

than 200 external and internal participants in a total of

seven working groups engaged in discussions of various

topics. One of those topics was what the resolutions of

the United Nations Climate Change Conference COP26

in Glasgow mean for the Group. The joint efforts neces-

sary to achieve a more sustainable supply chain was a

further topic.

automotive industry, including its social aspects — for

example, the balance between climate protection and

the preservation of jobs.

Associations and initiatives

In addition to direct dialogue with political deci-

sion-makers and other interest groups that promote

sustainable development, the Group is active in various

associations, committees and sustainability initiatives.

Some of the most important initiatives here are the UN

Global Compact, econsense — Forum Nachhaltige

Entwicklung e.V. — German Business Forum for Sustain-

able Development, and the World Business Council for

Sustainable Development. Within these initiatives, dis-

cussions are also held with representatives of civil soci-

ety.

As a globally operating company, the Group has set

itself the goal of establishing sustainability at its busi-

ness units and specialist units all over the world. For

this reason, Sustainability Dialogue events are organ-

ised in other countries and regions as well. Such inter-

national dialogue events have been held in China, Japan,

the United States and Argentina. During the reporting

year, more than 160 stakeholders participated in the

Sustainability Dialogue in Beijing (China), which was

organised as a hybrid event. The participants primarily

talked about road safety in connection with new tech-

nologies.

Traffic safety

Accident-free driving — this vision drives Mercedes and

is a fixed component of its sustainable business strat-

egy. Innovative driver assistance systems already offer

drivers and passengers a high level of safety and com-

fort today. These systems can help drivers avoid or

safely manage critical situations on the road in order to

protect vehicle occupants and other road users. System

warnings and active brake applications are now increas-

ingly preventing accidents or at least mitigating their

The Advisory Board as an important source of sup-

port. The Advisory Board for Integrity and Sustainability

has been providing important support for the Group’s

sustainability work since 2012. The board’s members are effects.

independent external specialists from the fields of sci-

ence and business, as well as from civic organizations.

They also possess specialised knowledge regarding

environmental and social policy, the development of

transport, traffic and mobility, and various human rights

and ethical issues. The members of the Advisory Board

accompany us with constructive criticism on questions

related to integrity and corporate responsibility. The

Advisory Board convenes three times a year in meetings

that are chaired by the member of the Board of Manage-

ment responsible for Integrity and Legal Affairs. One of

these annual meetings focuses in particular on discus-

sions with other Board of Management members and

members of the Supervisory Board. A regular exchange

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B.ꢃꢈ

management, as well as specialists from the Integrity

Target

Target horizon

and Legal Affairs Board of Management division. We

also promote a broad-based public and political dia-

logue on the topic of automated driving.

Further improve accident-prevention systems.

Ongoing

Make vehicles even safer for occupants during an accident

and afterwards.

Ongoing

Make vehicles even safer for other road users, such as

pedestrians.

Working together to further improve vehicle safety

The goal of increasing safety on the road can only be

achieved though collaboration, which is why we estab-

lish partnerships and participate in research projects.

Mercedes-Benz AG has been involved in the “Tech

Center i-protect” strategic cooperation project since

2016. The project includes partners from business and

industry, government and scientific institutes. Our activ-

ities within the project include research into new

restraint systems for future vehicle interiors, for exam-

ple. We are also utilising digital accident research meth-

ods and trying out new approaches, such as the use of

X-ray technology in crash tests.

Increase overall traffic safety by means of safety initia-

tives.

Holistic safety concept

The Mercedes-Benz Group utilises its holistic Integral

Safety concept in its vehicle development activities.

This concept was first used in the late 1990s to describe

how we had divided the utilisation of safety systems

into four phases: “Assistance during driving”, “Prepara-

tion for a possible accident”, “Protection during an acci-

dent” and “Help after an accident”. Our safety measures

establish a bridge between active and passive safety

within these four phases — i.e., between accident pre-

vention (phases 1 and 2) and protection when an acci-

dent occurs (phases ꢃ and 4). One example is innova-

tive restraint systems such as the beltbag and the rear

airbag in the S-Class, which protect passengers in the

rear seat.

Driver assistance systems ensure greater safety

Assistance and safety systems make driving both safe

and comfortable. For example, Mercedes-Benz vehicles

equipped with driving assistance systems support driv-

ers when they steer, brake and accelerate (SAE Level 2).

Driving assistance systems can react differently to the

danger of a collision depending on the situation. The

Active Brake Assist system, which comes as standard

equipment, is a good example of this at Mercedes-Benz

Cars: Active Brake Assist can help reduce the severity

of — or even entirely prevent — accidents involving

vehicles ahead or pedestrians crossing the carriageway.

Integrated approach

Fewer accidents, greater traffic safety: this is one of the

objectives associated with the utilisation of automated

and autonomous vehicle systems. Despite all the bene-

fits, care needs to be taken, as ethical and legal —

including data-protection — risks must also be taken

into account as automated driving systems are devel-

oped further. The Mercedes-Benz Group does this as

early as the product development stage. We are imple-

menting data-protection principles and standards along

the entire value chain in accordance with “privacy by

design”. We are also integrating social and ethical con-

siderations into conditionally automated and highly

automated driving systems through the use of our “eth-

ics by design” concept.

Conditionally automated and highly automated

driving

With DRIVE PILOT (SAE Level ꢃ) and INTELLIGENT PARK

PILOT (SAE Level 4), Mercedes-Benz is aiming to take

the decisive step toward conditionally automated and

highly automated driving. The availability and use of

future DRIVE PILOT functions on motorways will depend

on the options, the countries in question and the exist-

ence of corresponding laws. With DRIVE PILOT, we have

developed a technology that offers a currently unique

and unprecedented driving experience. It also gives

drivers the best gift they could ask for: time. Because in

certain situations, the system allows Mercedes-Benz

customers to turn the task of driving over to the vehicle

systems and focus on other matters. At SAE Level ꢃ, the

automated driving system takes over certain driving

The Mercedes-Benz Group uses an integrated approach

to answer the technical, ethical and legal questions

relating to automated driving. These questions are

addressed by an interdisciplinary team of experts from

research and development, product safety and quality

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tasks. However, a human driver is still needed. The

Integrity and compliance

driver must be able to take control of the vehicle when-

ever requested to do so by the vehicle.

B.ꢆꢀ

Top marks and awards

Target

Target horizon

Models from Mercedes-Benz Cars repeatedly earn top

marks in safety tests conducted by independent insti-

tutes. Of particular note in this regard are the marks

Mercedes-Benz regularly receives from the American

Insurance Institute for Highway Safety (IIHS). The IIHS

rating assesses crash safety and accident-prevention

and lighting systems. The Mercedes-Benz C-Class,

E-Class and GLE-Class received the IIHS “2021 TOP

SAFETY PICK+” award for the 2021 model year, while the

GLC was given the “2021 TOP SAFETY PICK” distinction.

In addition, both the EQA (2019 version in the category

Compact SUV) and the EQS (2021 version) were

awarded five stars out of a possible five by EuroNCAP

during the reporting period. The EQS was actually

named “Best in Class” twice: in the Executive and Pure

Electric categories, which means all EQ models

launched on the market in 2021 received the highest

possible ratings.

Our integrity-related activities are designed to help us

achieve the following key targets:

– Knowledge of and compliance with the Integrity Code

– All employees and managers behave and act in an ethi-

cal and responsible manner

Ongoing

–

Discussions and dialogue concerning current key integ-

rity topics and the risks associated with unethical

behaviour

–

Feedback from integrity analyses is incorporated into

measures designed to strengthen the culture of integ-

rity

Our compliance-related activities are designed to help

us achieve the following key targets:

–

Respect for and protection of human rights

Compliance with corruption prevention regulations

Maintenance and promotion of fair competition

Compliance of our products with technical and regula-

tory requirements

Ongoing

–

Adherence to data protection laws

Compliance with sanctions

Our expenditure of €9.1 billion on research and develop-

ment in 2021 includes, among other things, research

and development (R&D) expenditure for our safety

measures and concepts.

Prevention of money laundering

Prevention of the financing of terrorism

Companies only stay successful if their actions are ethi-

cal and legally responsible. This is especially the case

during times of turmoil and transformation. That is why

integrity and compliance are top priorities at the

Mercedes-Benz Group.

A corporate culture of integrity

The automotive industry is in a state of radical change.

New fields of business are developing and new technol-

ogies are raising new questions — both ethical and legal.

Moreover, the covid-19 pandemic has led to profound

changes all over the world. In such times of change and

uncertainty, value-based action matters more than ever.

That’s why integrity is a central element of our corporate

culture and an enabler that forms an integral part of our

sustainable business strategy. For us, this involves more

than just obeying laws and regulations. We also align all

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our actions with shared principles, which particularly

Information, dialogue and training

include fairness, responsibility, respect, openness and

transparency.

Infopoint Integrity was established in 2015 in order to

promote a corporate culture of integrity. It is the central

point of contact for people and employees of Group

companies when they have questions concerning acting

with integrity. The Infopoint works together with spe-

cialists including experts in the fields of legal and HR

issues, data protection, compliance, diversity and sus-

tainability. It either provides direct support or connects

employees with the appropriate contact partners.

Integrity in our daily business activities

At the Mercedes-Benz Group, integrity, compliance and

legal affairs are combined into a single Board of Man-

agement division. The Integrity and Legal Affairs divi-

sion supports all of our corporate units in their efforts

to embed these topics in our daily business activities.

Our Integrity Management unit works to promote and

enhance integrity within our company and create a

shared understanding of integrity. The goal is to avoid

possible risks that can arise due to unethical behaviour

and thus to contribute to our company’s long-term suc-

cess. The Head of Integrity Management reports directly

A worldwide network of local contact persons for inquir-

ies regarding integrity, compliance and legal issues is

also available to the employees. It evaluates inquiries

made by our employees and, if necessary, initiates the

appropriate measures.

to the member of the Board of Management responsible We expanded cooperation and activities in the Integrity

for Integrity and Legal Affairs.

Network during the reporting year. The Integrity Net-

work consists of employees from the individual compa-

nies, divisions and functional divisions of the Group and

serves as a joint platform for sharing knowledge and

information with the aim of developing and implement-

ing concrete measures. Among other things, local teams

of “multipliers” have been established, and that has

expanded the reach of the integrity-related measures.

Corporate principles and our Integrity Code

Our Integrity Code is binding on all employees of the

Mercedes-Benz Group and the controlled companies of

the Group. It serves as our shared standard of values,

defines the guidelines for all conduct and helps us

make the right decisions. Employees from a variety of

corporate units all over the world have helped to formu- In order to strengthen and standardise cooperation, we

late the Integrity Code. It is available in 12 languages

and includes, among other things, regulations concern-

ing corruption prevention measures, data management,

product safety and compliance with technical regula-

tions. Our employees can view our Integrity Code, along

with details on how it should be applied and other key

information such as FAQs, points of contact and contact

persons, in the uniform rules and policies database as

well as on the intranet.

have launched an Integrity Newsletter, and we also

organise international multiplier dialogue events on a

regular basis. The Integrity Network has also designed

and utilised many other programmes ranging from dia-

logue sessions as well as content and inspiration for

management communication to training programmes, in

order to ensure that integrity remains embedded in our

company’s daily business over the long term.

Our employees can also access the Integrity Toolkit via

our employee portal. The Toolkit contains formats for

dialogue events, tools for self-reflection, case studies

and further information about the topic of integrity. A

new workshop method was added to the Toolkit during

the year under review. Here, employees and managers

were able to expand their knowledge about the Integrity

Code in a workshop with the motto “Our Integrity

Code — using our corporate principles to ensure we do

the right thing”. Concise formats have also been added,

including an Integrity Calendar, for example. All of these

measures are designed to help increase the focus on

We have also formulated a special set of requirements

for our managers in our Integrity Code. We expect

them in particular to serve as role models through their

ethical behaviour and thus offer guidance for our

employees.

For example, during the reporting year, we continued to

regularly inform them about our Integrity Code and its

significance for our daily business activities. We also

regularly addressed the topics of integrity, compliance

and legal affairs in our internal media.

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integrity in daily business operations. An additional area

Employee survey

of focus in 2021 involved the challenges presented by

hybrid forms of working in terms of ethical behaviour. In

order to be able to offer forms of assistance here, all of

the Integrity Toolkit’s formats were modified in line with

requirements relating to mobile and hybrid forms of

working.

The Group’s success largely depends on a permanent

commitment to integrity. That’s why we are consistently

working on our understanding of integrity, refining it fur-

ther and continually reviewing our own actions. Surveys

such as our employee survey, which we conducted once

again throughout the Group in the year under review,

play a key role here. In the past, we used a separate

survey to analyse the way our employees view our cul-

ture of integrity, but in 2021, we integrated this analysis

into our employee survey. The survey results have a

direct influence on the remuneration of the manage-

ment.

We particularly focus on direct discussions, and during

the reporting year we once again conducted a variety of

dialogue events with employees at all levels of the hier-

archy and with external stakeholders. These dialogue

events were conducted virtually because of the protec-

tive measures in force due to the covid-19 pandemic.

During the year under review, we also developed the

Integrity Case Collection. The employees can use this

collection of case studies to learn about and practise

responsible behaviour in unclear situations and share

ideas about “proper behaviour” in a productive dialogue.

The results of the 2021 Employee Survey show that our

culture of integrity is more firmly embedded throughout

the company than was the case after the last survey,

which was conducted in 2018.

The employee survey also revealed that a more open

“speak-up” culture is now maintained throughout the

Group. In other words, our employees are able to talk

about sensitive issues in a more open manner. Equally

important for us is the feedback indicating that com-

pared to the survey results from the year 2018, our

employees work in an environment based to a greater

extent on trust, because only in such an environment

can topics be discussed constructively.

The employees in administrative areas at Mercedes-

Benz Group AG and controlled Group companies regu-

larly complete a mandatory web-based training course

about integrity that is based on the Integrity Code.

Because managers serve as role models, they perform

an especially important task with regard to integrity,

compliance and legal matters. In order to help them as

much as possible to carry out this role, the training pro-

gramme also includes a special mandatory management

module.

In order to implement the measures that were derived

from the results reports, we restructured the Integrity

Toolkit in the reporting year and adjusted its contents.

We also provided training to multipliers from various

divisions in order to support managers with follow-up

activities relating to integrity and compliance. In addi-

tion, the Integrity Network has addressed the findings of

the employee survey in order to initiate further meas-

ures for the individual divisions and functions.

Value-based compliance management

Value-based compliance is an indispensable part of the

Mercedes-Benz Group’s daily business activities and is

firmly embedded in our corporate culture. We are

strongly committed to responsible conduct. We expect

our employees to comply with laws, regulations and vol-

untary self-commitments, and to put our corporate val-

ues into practice. We have laid down these expecta-

tions in a binding form in our Integrity Code.

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B.ꢆꢁ

Promoting fair competition

Our Compliance Management System

Our Group-wide Antitrust Compliance Programme is ori-

ented to national and international standards for ensur-

ing fair competition. The programme establishes a bind-

ing, globally valid Group standard that defines how

matters of antitrust law are to be assessed.

I. Compliance values

VII. Monitoring

improvement

II. Compliance

objectives

&

By means of an advisory hotline, guidelines and practi-

cal support, we help our employees around the world to

recognise situations that might be critical from an anti-

trust perspective and to act in compliance with all regu-

lations. Responsibility for designing and implementing

measures against antitrust risks lies primarily with the

respective Group company’s management. The

VI. Communication

III. Compliance

organisation

&

training

V. Compliance

programme

IV. Compliance risks

Mercedes-Benz Group monitors the management activi-

Through our Compliance Management System (CMS), we ties of the respective Group company within the frame-

aim to promote compliance with laws and policies at our work of Group management. To supplement this, our

company and to prevent misconduct. The measures

needed for this are defined by our compliance and legal

organisations in a process that also takes the Compa-

ny’s business requirements into account in an appropri-

ate manner.

Compliance, Legal Product & Technology, and Corporate

Audit units conduct monitoring activities at our divi-

sions. In order to ensure an independent external

assessment of our Antitrust Compliance Programme,

KPMG AG Wirtschaftsprüfungsgesellschaft audited the

Compliance Management System for antitrust law in

accordance with the Standard 980 of the Institute of

Public Auditors in Germany. This audit based on the

principles of appropriateness, implementation and

effectiveness was successfully completed for the sec-

ond time at the end of 2021, after having been con-

ducted in 2016 as well.

Focal points of the compliance management system

Combating corruption

We have committed ourselves to fighting corruption —

because corruption is harmful to fair competition, soci-

ety and our Group. Our corruption prevention measures

extend beyond compliance with national laws and also

encompass the guidelines from the OECD Convention

on Combating Bribery of Foreign Public Officials in

International Business Transactions (199ꢂ) and the

United Nations Convention against Corruption (200ꢃ).

Our Corruption Prevention Compliance Programme is

based on our Group-wide CMS. In order to ensure an

independent external assessment of our Corruption

Prevention Compliance Programme, KPMG AG

Compliance with technical and regulatory require-

ments

For Mercedes-Benz Cars & Vans, technical compliance

means adhering to technical and regulatory require-

ments, standards and laws. In doing so, we take into

account the fundamental spirit of these laws and regu-

lations as well as internal development requirements

and processes. Our objective is to identify risks within

the product-creation process (product development

and certification) at an early stage and to implement

preventive measures. For this purpose, we have estab-

Wirtschaftsprüfungsgesellschaft audited the Compli-

ance Management System for corruption prevention in

accordance with Standard 980 of the Institute of Public

Auditors in Germany. This audit, which was based on the lished a technical Compliance Management System

principles of appropriateness, implementation and

effectiveness, was successfully completed at the end of

(tCMS) in our automotive divisions. Its objective is to

safeguard compliance with all legal and regulatory

requirements throughout the entire product develop-

ment and certification process. The tCMS defines val-

ues, principles, structures and processes in order to

2019.

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provide our employees with guidance and orientation,

Preventing and combating money laundering

especially with regard to challenging questions on how

to interpret technical regulations.

Money laundering and the financing of terrorism cause

tremendous damage — to the economy and society in

equal measure. Even an accusation of money laundering

can compromise the Group’s reputation and have finan-

cial consequences for us, as well as for our sharehold-

ers and stakeholders. For this reason, the prevention of

money laundering and the implementation of anti-

money laundering measures have been defined as cen-

tral compliance goals in our Integrity Code.

To complement the Integrity Code, technical integrity

management has worked together with the relevant

development units to formulate the “Speak up” and

“Judgement calls” commitment statements. The commit-

ment statements provide all employees in development

and certification units with a basis for a common under-

standing of responsible behaviour in the product-crea-

tion process.

In order to effectively combat and prevent money laun-

dering while at the same time complying with different

regulatory requirements, the Mercedes-Benz Group has

established a two-pillar model (trade in goods and

mobility services). We use an integrated compliance

approach to check applicable sanction lists and take

measures for the prevention of money laundering and

the financing of terrorism. On the one hand, these

measures aim to prevent supranational and national

sanctions and embargoes from being evaded; on the

other, money laundering, the financing of terrorism,

organised crime and other types of corporate crime are

to be combated.

In order to ensure an independent external assessment

of our tCMS, KPMG AG Wirtschaftsprüfungsgesellschaft

audited the tCMS with a focus on relevance to emis-

sions in accordance with Standard 980 of the Institute

of Public Auditors in Germany. This audit with a focus

on emissions was based on the principles of appropri-

ateness, implementation and effectiveness and was

successfully completed at the end of 2020.

Responsible use of data

Connectivity and digitalisation will have a major impact

on mobility in the future. The responsible handling and

protection of data is a top priority at the Mercedes-Benz Compliance organisation

Group.

The Group’s compliance organisation is structured divi-

sionally, regionally and along the value chain. As a result,

it can provide effective support — for example, by

means of guidelines and advice. Contact persons are

available to each function, division and region. In addi-

tion, a global network of local contact persons makes

sure that our compliance standards are met. The con-

tact persons help the management at the Group compa-

nies implement our compliance programme at their

respective sites.

The regulatory requirements relating to data protection

have become significantly more stringent in recent

years. The strict requirements of the General Data Pro-

tection Regulation (GDPR) are valid not only in the Euro-

pean Union but also beyond it. Meanwhile, many coun-

tries all over the world that are relevant to the Group’s

business operations have tightened up their local data

protection laws. We are addressing the increased regu-

latory requirements by means of our Group-wide Data

Compliance Management System (Data CMS), which,

along with our data vision and our data culture, is a fun-

damental component of our overarching Data Govern-

ance System.

Moreover, our Compliance Board provides guidance

regarding overarching compliance topics and monitors

activities to see whether our compliance measures are

effective. The Board’s mission is to react promptly to

changes in business models and the business environ-

ment, deal with regulatory developments and continu-

ously enhance the CMS. The Compliance Board consists

of representatives of the compliance and legal affairs

departments. It meets regularly four times a year and as

needed, and is chaired by the Chief Compliance Officer

& Vice President Legal Product & Technology.

The Data CMS, which combines all Group-wide meas-

ures, processes and systems for ensuring data compli-

ance, is based on the existing CMS. The Data CMS sup-

ports the systematic planning, implementation and

monitoring of compliance with data protection require-

ments.

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The Chief Compliance Officer & Vice President Legal

The BPO whistleblower system

Product & Technology and the Vice President & Group

General Counsel report directly to the member of the

Board of Management for Integrity and Legal Affairs and

to the Audit Committee of the Supervisory Board. They

also report regularly to the Board of Management at

regular intervals and as needed on matters such as the

status of the CMS and its further development, as well

as the BPO whistleblower system.

The Business Practices Office (BPO) whistleblower sys-

tem enables all Group employees, as well as business

partners and external whistleblowers, to report miscon-

duct anywhere in the world. The BPO is available around

the clock to receive information, which can be sent by

e-mail or normal mail or by filling out a special online

form. External toll-free hotlines are also available in Bra-

zil, Japan, South Africa and the United States. Reports

can also be submitted anonymously if local laws permit

this. In Germany, whistleblower reports can also be sub-

mitted to an external neutral intermediary in addition to

the BPO.

In addition, the Vice President & Group General Counsel

reports to the Antitrust Steering Committee and the

Group Risk Management Committee at regular intervals

and as needed. The Chief Compliance Officer & Vice

President Legal Product & Technical Compliance also

reports to the Group Risk Management Committee. The

structure of the reporting lines safeguards the compli-

The information provided to the BPO whistleblower sys-

tem enables us to learn about potential risks to the

Group and its employees and thus to prevent damage to

ance officers’ independence from the business divisions the Group and its reputation. A globally valid corporate

from the Group’s perspective.

policy defines BPO procedures and the corresponding

responsibilities. This policy aims to ensure a fair and

transparent process that takes into account the princi-

ple of proportionality for the affected parties, while also

giving protection to whistleblowers. It also defines a

standard for evaluating incidents of misconduct and

making decisions about their consequences.

Compliance risks

The Company examines and evaluates our Group com-

panies and corporate departments systematically each

year in order to minimise compliance risks. In this pro-

cess, we use, for example, centrally available informa-

tion about the Group companies, such as revenue, busi-

ness models and relations with business partners. If

necessary, other locally sourced information is supple-

mented. The results of these analyses are the founda-

tion of our compliance risk control.

If the initial risk-based assessment of an incident cate-

gorises it as a low-risk rule violation, the BPO hands the

case over to the responsible unit — for example, the HR

department, Corporate Security or Corporate Data Pro-

tection. The respective unit investigates the incident

and deals with the case on its own authority. Examples

of rule violations with a low risk for the Group include

theft, breach of trust, and undue enrichment valued at

less than €100,000 — if the violation does not fall into

Compliance programme

The compliance programme comprises principles and

measures that are designed to minimise compliance

risks and prevent violations of laws and regulations. The

individual measures are based on the knowledge gained the category of corruption.

through our systematic compliance risk analysis. We

focus, among other things, on the following aspects: the

continuous raising of awareness of compliance issues,

the systematic tracking of information received regard-

ing misconduct, and the formulation of clear standards

for the behaviour of our business partners. We address

all of these points in greater detail in a later section.

If the BPO’s risk-based initial assessment categorises an

incident as a high-risk rule violation, the BPO hands the

case over to an investigation unit. The BPO provides

support for the subsequent investigation until the case

is closed. Examples of high-risk rule violations include

offences related to corruption, breaches of antitrust law

and violations of anti-money-laundering regulations, as

well as infringements of binding technical provisions or

environmental protection regulations. Personal matters,

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such as incidents of sexual harassment or human-rights

violations, can also be considered high-risk rule viola-

tions.

modules are intended to sensitise them to current

integrity and compliance requirements such as those

related to anti-corruption measures and technical com-

pliance. Through these measures, we also offer our sup-

pliers and sales partners assistance for dealing with

possible compliance risks.

In an effort to constantly increase trust in our whistle-

blower system and make it even better known to our

employees, we use a variety of communication meas-

ures. For example, we provide informational materials

such as country-specific information cards, pocket

guides and an instructional video that is available in ten

different languages. We also hold dialogue events at

Communication and training

Mercedes-Benz Group AG offers an extensive range of

compliance training courses that are based on its Integ-

rity Code — for example, courses for employees in

which we provide employees with information about the administrative areas and in the Compliance and Legal

BPO. In addition, we regularly inform employees about

the type and number of reported violations and make

case studies available on a quarterly basis.

Affairs department, as well as for members of the

Supervisory Board and the executive management.

The contents and topics of the training courses are tai-

lored to the roles and functions of the respective target

group. We regularly analyse the need for our training

programme, expand or adapt it as necessary and con-

duct evaluations.

Sales partners and suppliers

We expect not only our employees to comply with laws

and regulations. We also require our sales partners and

suppliers to adhere to clear compliance requirements,

because we regard integrity and conformity with regula-

tions as a precondition for trust-based cooperation. Our

Business Partner Standards, which we revised in the

Audits

Each year, the Company checks the processes and

reporting year, describe in detail exactly what we expect measures of the CMS and conducts analyses to find out

of our business partners.

whether the measures are appropriate and effective.

This is accomplished using information about the Group

companies as well as other locally collected data. We

also monitor our processes regularly on the basis of key

performance indicators such as the duration and quality

of individual processes. To determine these indicators,

we check, among other things, whether formal require-

ments are being met and whether the content is com-

plete. The knowledge gained through both internal and

independent external assessments is also taken into

account.

In the selection of our direct sales partners and in our

existing sales partnerships, we ensure that our business

partners comply with laws and observe ethical princi-

ples. In order to monitor this, we use a globally stand-

ardised, risk-based Sales Business Partner Due Dili-

gence Process. During the reporting year, we subjected

all of the new sales partners to a due diligence audit. In

addition, we audit the existing sales partners as part of

the monitoring process. Our monitoring in this area is

designed to ensure that we can identify possible integ-

rity violations by our sales partners. We also reserve the If changed risks or new legal requirements call for

right to terminate cooperation with, or terminate the

selection process for, any sales partner that fails to

comply with our standards. In addition, we work with

our procurement units to continuously improve our pro-

cesses for selecting and cooperating with suppliers.

adjustments, we adapt our CMS accordingly. The Group

companies implement the respective improvement

measures on their own authority. They also regularly

monitor these measures to determine their effective-

ness and continually inform the responsible manage-

ment committees about the results of their monitoring

process.

Our Supplier Sustainability Standards also apply to our

suppliers. On the basis of these standards and our

Integrity Code, we make available to each of our suppli-

ers and sales partners a specific Compliance Awareness

Module developed with their activities in mind. These

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In order to ensure an independent external assessment

Social compliance

of our compliance programme, KPMG AG Wirtschafts-

prüfungsgesellschaft audited the Compliance Manage-

ment Systems (CMS) for corruption prevention, antitrust

and technical compliance in accordance with Standard

The expansion of electric mobility in particular is also

further increasing public interest in respect for human

rights within the automotive supply chain, because the

production of battery cells requires the use of raw

materials such as lithium and cobalt. These raw materi-

als often come from countries where there is a risk that

they are mined under conditions that could be critical

from a human-rights standpoint. In addition to the inter-

est expressed by consumers and civil organisations, we

are also observing increasing interest in human-rights

980 of the Institute of Public Auditors in Germany. This

audit, which was based on the principles of appropri-

ateness, implementation and effectiveness, was suc-

cessfully completed for our CMS Corruption Prevention

at the end of 2019, for our tCMS (focus on emissions) at

the end of 2020 and for our CMS Antitrust at the end of

2021. The latter was the second such audit, with the first issues by shareholders, investors and rating agencies.

having been conducted in 2016.

Indeed, human-rights issues are increasingly having an

influence on investment decisions.

Reported violations

The Business Practices Office (BPO) whistleblower sys-

tem enables all Group employees, as well as business

partners and third parties, to report misconduct any-

where in the world. A total of ꢃꢃ new cases were

opened during the reporting year. Overall, 20 cases, in

which 24 individuals were involved, were closed “with

merit”. In these cases, the initial suspicion was con-

firmed. Of these cases, two were in the “Corruption”

category, two were in the “Technical Compliance” cate-

gory and four were in the “Reputational Damage” cate-

gory. In three cases, accusations of inappropriate

behaviour of employees toward third parties were con-

firmed. Four cases were categorised as “Damage over

Respect for human rights has key importance for the

Mercedes-Benz Group and is an obligation as well as a

mission for us. We have therefore made upholding

human rights an area of action of our sustainable busi-

ness strategy and have provided measurable targets

and key figures for our approach to human rights.

B.ꢆꢂ

Target

Target horizon

Define and implement protective measures for addressing

100% of our production raw materials that pose an

increased risk of human rights violations

2028

2022

Milestone: review 40% of all raw materials that pose an

increased risk

€100,000”. The remaining cases fell into other catego-

ries. With regard to those incidents that are closed “with

merit”, the company decides on appropriate response

measures in line with the principles of proportionality

and fairness. The personnel measures taken in 2021

included admonitions, warnings, termination agree-

ments and (extraordinary) dismissals.

Milestone: review ꢂ0% of all the production raw materials

used that pose an increased risk of human rights violations

and define any necessary remediation measures

2025

2026

Review 100% of the merchandise groups from the service

supply chains that we use and which pose a higher risk of

human-rights violations

Policy commitment

Respect for human rights is a fundamental component

of responsible corporate governance at the Group. We

are committed to ensuring that human rights are

respected and upheld in all of our Group companies

and also by our partners and suppliers.

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Our Principles of Social Responsibility and Human

suppliers (tier 1) and risk-based also the indirect suppli-

ers beyond tier 1. For further information, see also the

“Sustainability in the supply chain” chapter.

Rights, which were adopted in September 2021, reflect

this voluntary self-commitment. The Chairman of the

Board of Management and other members of the then

Board of Management of Mercedes-Benz Group AG

signed our Principles of Social Responsibility and

Human Rights, as did the members of the General

Works Council, the World Employee Committee and the

IndustriALL Global Union.

The HRRS is to be understood as a due-diligence cycle

that basically consists of four phases: 1. Risk assess-

ment, 2. Programme implementation, ꢃ. Monitoring and

4. Reporting. It is designed to identify risks and possible

and actual negative effects of our business activities on

human rights early on, to systematically avoid them and,

if necessary, to initiate appropriate measures.

O

External stakeholders are also regularly involved as we

continue to expand the HRRS step by step. The stake-

holders include rights holders such as our employees

and their representatives, as well as local residents. We

also hold talks with international NGOs and other organ-

isations concerning the human-rights risks arising from

the extraction of certain raw materials.

HRRS

DUE DILIGENCE

CYCLE

Social Compliance Management System

We use our Social Compliance Management System

(Social CMS) to identify and address risks that can arise

at our Group companies. During the year under review,

we fully integrated the issue of human rights into our

central and systematic risk analysis process within the

framework of the Social CMS for Group entities in which

we have a majority shareholding. We then developed

packages of measures for specific risks on this basis

and passed these measures on to the corresponding

Group companies. Like the Principles, this system is

reviewed and revised regularly and as needed on the

basis of the results of the HRRS.

Organisational embedding

The Social Compliance department serves as our centre

of competence for human rights. In order to ensure

effective implementation of our human-rights due-dili-

gence approach, which is known as the Human Rights

Respect System, this department works closely with the

specialist units responsible for operational implementa-

tion, and in particular with the procurement units.

Group-wide activities relating to human-rights issues

are managed by the Integrity and Legal Affairs Board of

Management division at Mercedes-Benz Group AG.

We use the identified risk areas as a basis for an annual

review of human-rights risks at Group companies and

majority-owned entities. Here, we employ the two-step

procedure that is described in the Compliance Manage-

ment System — i.e., a preliminary classification of risks

is followed by a validation process that uses data col-

lected via surveys. This validated risk classification then

serves as the basis for the assignment of appropriate

measures to each Group company.

Human Rights Respect System (HRRS)

The Human Rights Respect System (HRRS) backs up the

Company’s approach to implementing its human-rights

due-diligence obligations. This comprehensive due-dili-

gence approach encompasses the identification and

evaluation of our human-rights risks, the definition and

implementation of measures, the handling of risks and

the monitoring of measures taken. We use this system

to monitor our own Group companies, our direct

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Human rights in the supply chain of production

materials. The Procurement department of the

Services. We also ensure that our service providers

share responsibility for respecting human rights and for

other sustainability-related aspects. For example, Inter-

national Procurement Services (IPS) evaluates all new

service providers in high-risk countries and critical pro-

curement segments to determine whether they fulfil

social and environmental standards, are ethical in their

business operations, and properly implement policies.

Mercedes-Benz Group monitors the human-rights com-

pliance of direct suppliers by regularly conducting risk

analyses that also include on-site CSR audits and an

annual database research procedure to identify possi-

ble violations of our sustainability and compliance rules

at an early stage on the basis of the latest supplier data.

Should the database research and/or on-site audits

reveal any red flags, Mercedes-Benz Procurement initi-

ates an extensive examination of the situation. If the

supplier does not sufficiently remedy the criticised pro-

cesses, we make individual decisions regarding the next

steps. In especially serious cases, these decisions can

also be made by management bodies. As a last resort,

this can also lead to the discontinuation of our business

relationship with a supplier.

We used a preliminary risk analysis as a basis for identi-

fying 2ꢂ services that are potentially critical from a

human-rights standpoint. On this basis, we cooperated

with a team of experts to draw up a list of questions to

be answered by service providers so that any increased

human-rights risks can be identified for certain com-

modities and sectors. This gives us a transparent over-

view of the risks and enables us to initiate targeted

analyses of the status quo and engage in a productive

dialogue with relevant service providers. We also audit

our service providers’ due diligence activities. These

audits focus on assessments of service providers in

high-risk countries. We supplement our list of questions

with document checks and database research in order

to ensure the answers are plausible.

We continued to conduct our audits at suppliers of pro-

duction materials in 2021, when a total of 805 on-site

audits were performed. Some of these audits were con-

ducted virtually due to the covid-19 pandemic.

We focus especially on critical raw materials when

assessing human-rights risks in the production-material

supply chain. We used a preliminary risk analysis as a

basis for identifying 24 critical raw materials that will be

gradually examined in more detail between now and

During the year under review, the on-site audits and

screenings of direct service providers that were con-

ducted by IPS discovered no specific suspected cases

of child labour or forced labour, nor were there any indi-

cations of violations of the right to collective bargaining

or freedom of association.

2028. This review basically consists of three steps:

1

. Transparency: increasing transparency along the raw

material supply chains — especially with regard to

certain key components such as battery cells.

In order to make our service providers more aware of

the importance of responsible behaviour with regard to

human rights and to explain what we expect of them in

this connection, we conduct Good Practice Sharing

Workshops, which have also been held online since the

spring of 2020. At the workshops, cross-functional

teams from Procurement meet service providers to

openly and constructively discuss various issues.

2

.Identification of risk hotspots in these supply chains,

e.g., on the basis of the specific risks in the individual

mining countries, for example.

ꢃ.Definition and implementation of measures for the

risk hotspots and review of whether they are effective

over the long term.

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Complaint management

The company offers employees and external whistle-

blowers various channels through which they can report

suspected human-rights violations and request remedy.

These channels thus also help us identify and assess

human-rights risks at the Group. Both our BPO (Busi-

ness Practices Office) whistleblower system and the

World Employee Committee are available to receive

reports of suspected human-rights violations. For fur-

ther information, see also “Sustainability in the supply

chain”.

Raising awareness of human-rights issues

Our Integrity Code and our Principles of Social Respon-

sibility and Human Rights provide our employees with

information about basic human-rights principles and

raise their awareness of human-rights risks. The provi-

sions of the Integrity Code and the Principles are bind-

ing for all of our employees and are also communicated

to them in online training courses. In addition, the

employees learn about human-rights issues in func-

tion-specific training courses.

group.mercedes-benz.

w

com/company/compliance/integrity-code.html

and group.mercedes-benz.com/sustainability/

w

human-rights/principles-of-social-responsibility-

and-human-rights.html

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Overall Assessment

of the Economic Situation

The main development during the past financial year

was the economic recovery that followed the severe

setbacks caused by the covid-19 pandemic in 2020.

Nevertheless, the 2021 financial year continued to be

affected by the pandemic. The economic development

was additionally hindered by supply bottlenecks for key

upstream products of the automotive industry, espe-

cially semiconductors. We also continued to face chal-

lenges due to the transformation of the automotive

industry and our company as we move towards a

CO -neutral future.

2

With the help of our active business and financial coun-

termeasures and supported by the appeal of our prod-

ucts, we succeeded in meeting our expectations for the

development of business in 2021 as adjusted during the

year, and concluded the year stronger than before.

We are confident for the 2022 financial year. This confi-

dence, however, is based on the assumption that the

existing bottlenecks in the supply chain will gradually

ease and that our important markets will not suffer

additional economic setbacks as a result of a renewed

flare-up of the covid-19 pandemic. The geopolitical

developments also harbour uncertainties.

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TakeoverꢃRelevant Information

and Explanation

(Report pursuant to Section ꢃ15a Subsection 1 and Section 289a Subsection 1 of the German Commercial Code (HGB))

Composition of share capital

Restrictions on voting rights and on the

transfer of shares

The Company does not have any rights from treasury

shares. In the cases described in Section 1ꢃ6 of the

German Stock Corporation Act (AktG), the voting rights

of treasury shares are nullified by law.

The issued share capital of Mercedes-Benz Group AG

amounted to approximately €ꢃ,0ꢂ0 million as of ꢃ1

December 2021. It is divided into 1,069,8ꢃꢂ,44ꢂ regis-

tered shares, each of which accounts for approximately

€2.8ꢂ of the share capital. Pursuant to Section 6ꢂ Sub-

section 2 of the German Stock Corporation Act (AktG),

rights and obligations relating to the Company exist

from the shares only for those persons and entities

entered in the register of shareholders. With the excep-

tion of treasury shares, from which the Company does

not have any rights, all shares confer equal rights to

their holders. Each share confers the right to one vote

and, with the possible exception of any new shares that

are not yet entitled to a dividend, to an equal share of

the profits in accordance with the dividend payout

Shares in Mercedes-Benz Group AG acquired by

employees within the context of the employee share

programme may not be disposed of until the end of the

following year. Eligible participants in the Performance

Phantom Share Plans (PPSPs) of Executive Level 1 and

eligible members of the Board of Management are

obliged by the Plans’ terms and conditions and by the

Stock Ownership Guidelines to acquire the Company’s

shares with a part of their Plan income or out of their

approved by the Annual General Meeting. The rights and own funds up to a defined target volume and to hold

obligations arising from the shares are derived from the

provisions of applicable law, in particular Sections 12,

them for the duration of their employment at the Group.

5

ꢃaꢋff.,ꢋ118

ꢋ

ff. and 186 of the German Stock Corporation

Provisions of applicable law and of the Articles of

Incorporation concerning the appointment and

dismissal of members of the Board of Management

and amendments to the Articles of Incorporation

Members of the Board of Management are appointed

and dismissed on the basis of Sections 84 and 85 of the

German Stock Corporation Act (AktG) and Section ꢃ1 of

the German Codetermination Act (MitbestG). In accord-

ance with Section 84 of the German Stock Corporation

Act (AktG), the members of the Board of Management

are appointed by the Supervisory Board for a maximum

period of office of five years. Until ꢃ1 December 2020,

the rules of procedure of the Supervisory Board stipu-

lated that the initial appointment of members of the

Board of Management should generally be limited to

three years. Since 1 January 2021, the rules of procedure

have stipulated a maximum period of three years for ini-

tial appointments. Reappointment or the extension of a

period of office is permissible, in each case for a maxi-

mum of five years.

Act (AktG). There were no treasury shares at ꢃ1 Decem-

ber 2021.

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Pursuant to Section ꢃ1 of the German Codetermination

capital represented at the General Meeting; no use is

made in the Articles of Incorporation of the possibility to

stipulate a larger majority of the share capital. Amend-

ments to the Articles of Incorporation that only affect

the wording can be decided upon by the Supervisory

Board in accordance with Article ꢂ Subsection 2 of the

Articles of Incorporation. Pursuant to Sectionꢋ181 Sub-

section ꢃ of the German Stock Corporation Act (AktG),

amendments to the Articles of Incorporation take effect

Act (MitbestG), the Supervisory Board appoints the

members of the Board of Management with a majority

comprising at least two thirds of its members’ votes. If

no such majority is obtained, the Mediation Committee

of the Supervisory Board has to make a suggestion for

the appointment within one month of the vote by the

Supervisory Board in which the required majority was

not reached. The Supervisory Board then appoints the

members of the Board of Management with a majority of upon being entered in the commercial register.

its own members’ votes. If no such majority is obtained,

voting is repeated and the Chair of the Supervisory

Board then has two votes. The same procedure applies

for dismissals of members of the Board of Management.

Authorisation of the Board of Management to issue

or buy back shares

By resolution of the Annual General Meeting of 5 April

2018, the Board of Management was authorised, with

In accordance with Article 5 of the Articles of Incorpora-

the consent of the Supervisory Board, to increase the

tion, the Board of Management has at least two members. share capital of the Company in the period until 4 April

The number of members is decided by the Supervisory

Board. Pursuant to Section 84 Subsection 2 of the Ger-

man Stock Corporation Act (AktG), the Supervisory Board

can appoint a member of the Board of Management as

the Chairperson of the Board of Management. If a

202ꢃ, wholly or in partial amounts, on one or several

occasions, by up to €1 billion by issuing new registered

shares of no par value in exchange for cash or non-cash

contributions, and, with the consent of the Supervisory

Board under certain conditions and within defined lim-

its, to exclude shareholders’ subscription rights

required member of the Board of Management is lacking,

an affected party can apply in urgent cases for that mem- (Approved Capital 2018). Subscription rights can, under

ber to be appointed by the court pursuant to Section 85

Subsection 1 of the German Stock Corporation Act (AktG).

these defined conditions, be excluded in the event of a

capital increase against non-cash contributions for the

Pursuant to Section 84 Subsection ꢃ of the German Stock purposes of an acquisition, and in the case of a capital

Corporation Act (AktG), the Supervisory Board can revoke increase against cash contributions, if the issue price of

the appointment of a member of the Board of Manage-

ment and of the Chairperson of the Board of Manage-

ment if there is an important reason to do so.

new shares is not significantly below the market price at

the time of issue.

The total number of shares issued against cash and/or

non-cash contributions under this authorisation with

the exclusion of shareholders’ subscription rights may

not exceed 10% of the share capital at the time when

this authorisation takes effect. This limit is to include

shares which (i) are issued or sold during the period of

this authorisation with the exclusion of subscription

rights in direct or analogous application of Section 186

Subsection ꢃ Sentence 4 of the German Stock Corpora-

tion Act (AktG) and which (ii) are or can or must be

issued to service bonds with conversion or option rights

or conversion or option obligations, provided that the

bonds are issued after this authorisation takes effect

with the exclusion of shareholders’ subscription rights

with analogous application of Section 186 Subsection ꢃ

Sentence 4 of the German Stock Corporation Act (AktG).

Pursuant to Section 1ꢂ9 of the German Stock Corpora-

tion Act (AktG), the Articles of Incorporation can only be

amended by a resolution of an Annual General Meeting.

Unless otherwise required by applicable law or the Arti-

cles of Incorporation, resolutions of the Annual General

Meeting are passed pursuant to Section 1ꢃꢃ of the Ger-

man Stock Corporation Act (AktG) and pursuant to Arti-

cle 16 Sentences 1 and 2 of the Articles of Incorporation

with a simple majority of the votes cast and if required

with a simple majority of the share capital represented.

Pursuant to Article 16 Sentence ꢃ of the Articles of

Incorporation, the dismissal of a shareholder-elected

member of the Supervisory Board requires a majority of

at least three quarters of the votes cast. Pursuant to

Section 1ꢂ9 Subsection 2 of the German Stock Corpora-

tion Act (AktG), any amendment to the purpose of the

Company requires a three-quarters majority of the share

No use has yet been made of Approved Capital 2018.

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Combined Management Report with Non-Financial Declaration

By resolution of the Annual General Meeting on 8 July

020, the Board of Management was authorised, with

In order to service the debt of the convertible bonds

2

and/or bonds with warrants issued as a result of the

authorisation, the Annual General Meeting of 8 July

2020 also approved a conditional increase in the share

capital of up to €500 million (Conditional Capital 2020).

the consent of the Supervisory Board, to issue during

the period until ꢂ July 2025 convertible bonds and/or

bonds with warrants or a combination of those instru-

ments (commercial paper) in a total nominal amount of

up to €10 billion with a maximum term of ten years, and

to grant the owners/lenders of those bonds conversion

or option rights to new, registered shares of no par

value in the Company with a corresponding amount of

the share capital of up to €500 million, in accordance

with the terms and conditions of those convertible

bonds or bonds with warrants. The bonds may be

issued in exchange for consideration in cash, but also

for consideration in kind, in particular for interests in

other companies. The respective terms and conditions

may also provide for mandatory conversion or an obli-

gation to exercise the option rights. The bonds can be

issued once or several times, wholly or in instalments,

or simultaneously in various tranches. They can also be

issued by subsidiaries of the Company pursuant to Sec-

No use was made of this authorisation to issue convert-

ible bonds and/or bonds with warrants during the

reporting period.

By a further resolution of the Annual General Meeting

on 8 July 2020, the Board of Management was author-

ised, with the consent of the Supervisory Board, to

acquire the Company’s own shares until ꢂ July 2025 for

all legal purposes in a volume of up to 10% of the share

capital at the time of the resolution of the Annual Gen-

eral Meeting or — if this amount is lower — at the time

when the authorisation is exercised. With the consent of

the Supervisory Board, the shares can be used, with the

exclusion of shareholders’ subscription rights, for,

among other things, corporate mergers and acquisitions,

or can be sold for cash to third parties at a price that is

not significantly below the market price at the time of

the sale. The acquired shares can also be used to ser-

vice debt on convertible bonds and/or bonds with war-

rants, or can be issued to employees of the Company

and employees and members of executive bodies of

subsidiaries pursuant to Section 15ff. of the German

Stock Corporation Act (AktG). The Company’s own

shares can also be cancelled.

tion 15ꢋff. of the German Stock Corporation Act (AktG).

Among other things, the Board of Management was also

authorised under certain circumstances, within certain

limits and with the consent of the Supervisory Board, to

exclude shareholders’ subscription rights to the bonds.

Subscription rights can, under these defined conditions,

be excluded when bonds are issued in exchange for

non-cash contributions, particularly within the frame-

work of a merger or acquisition, and when bonds are

issued in exchange for cash contributions if the issue

price is not significantly below the theoretical market

price of the bonds at the time of the issuance.

During the period of the authorisation, the total of the

Company’s own shares used with the exclusion of

shareholders’ subscription rights may not exceed 10% of

the share capital at the time when the authorisation

takes effect or — if this amount is lower — at the time

when it is exercised. If, during the period of the authori-

sation until it is exercised, use is made of other authori-

sations to issue or sell shares in the Company or to

issue rights enabling or requiring subscription to shares

in the Company and subscription rights are excluded,

this is to be counted towards the aforementioned 10%

limit.

Any issuance of bonds with the exclusion of subscrip-

tion rights may only be carried out under the authorisa-

tion if the arithmetical proportion of the share capital

attributable to the total of the new shares to be issued

on the basis of such a bond does not exceed 10% of the

share capital at the time when this authorisation takes

effect or — if this value is lower — at the time when it is

exercised. If, during the period of the authorisation until

it is exercised, use is made of other authorisations to

issue or sell shares in the Company or to issue rights

enabling or requiring subscription to shares in the Com-

pany and subscription rights are excluded, this is to be

counted towards the aforementioned 10% limit.

12ꢂ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

In a volume of up to 5% of the share capital existing at

– A credit agreement of Mercedes-Benz AG with a

lender for an amount totalling €0.ꢂ billion, for the

repayment of which Mercedes-Benz Group AG is

jointly and severally liable, which provides for a right

of termination for the lender in the event that natural

or legal persons or a group of at least two persons

acting jointly acquire control of Mercedes-Benz

Group AG. For the purpose of the credit agreement, a

group acting jointly exists when a group acts jointly

on the basis of formal or informal agreements or other

arrangements. Control for the purposes of the credit

agreement means (i) holding or controlling more than

50% of the voting rights in Mercedes-Benz Group AG,

the time of the resolution of the Annual General Meet-

ing, the Board of Management was authorised, with the

consent of the Supervisory Board, to acquire the Com-

pany’s own shares also with the application of deriva-

tive financial instruments (put or call options, forwards

or a combination of these financial instruments),

whereby the terms of the derivatives may not exceed 18

months and must be terminated at the latest on ꢂ July

2025.

No use was made of this authorisation to acquire the

Company’s own shares during the reporting period.

(ii) the right to determine or appoint the majority of

Material agreements subject to change of control

Mercedes-Benz Group AG has concluded various mate-

rial agreements, as listed below, that include clauses

regulating the possible event of a change of control, as

can occur as a result of a takeover bid:

the members of a decision-making body of Mercedes-

Benz Group AG (for example, the management, board

of management, advisory board, supervisory board),

(iii) the right to receive more than 50% of the distrib-

utable dividends of Mercedes-Benz Group AG, or (iv)

exercise of an otherwise comparable controlling influ-

ence on Mercedes-Benz Group AG. Control can be

exercised directly or indirectly through share owner-

ship, contractual arrangement, fiduciary status, eco-

nomic circumstances, or otherwise, and through either

a single person or a group acting together.

–

A non-utilised syndicated credit line for a total

amount of €11 billion, which the lenders are entitled to

terminate if (i) Mercedes-Benz Group AG becomes a

subsidiary of another company, or (ii) Mercedes-Benz

Group AG becomes controlled either individually or

jointly by one or more persons acting together. For the

purposes of the syndicated credit line, subsidiary in

relation to a company means another company (i) that

is controlled directly or indirectly by the first-men-

tioned company, (ii) of which more than 50% of the

subscribed share capital (or other equity) is held

directly or indirectly by the first-mentioned company,

or (iii) which is a subsidiary of another subsidiary of

the first-mentioned company. Control for the pur-

poses of the syndicated credit line means (i) the right

to determine the affairs of a company, (ii) the right to

control the composition of the managing board or

similar bodies, or (iii) the right to control the composi-

tion of the supervisory board (if elected by the share-

holders).

– A master cooperation agreement on wide-ranging

strategic cooperation with Renault S.A., Renault-Nis-

san B.V. and Nissan Motor Co., Ltd., as well as with

Mitsubishi Motors Corporation. In the case of a

change of control of one of the parties to the agree-

ment, each of the other parties has the right to termi-

nate the agreement. A change of control as defined by

the master cooperation agreement occurs if a third

party or several third parties acting jointly acquire,

legally or economically, directly or indirectly, at least

50% of the voting rights in the company in question or

are authorised to appoint a majority of the members

of its managing board. Under the master cooperation

agreement, several cooperation agreements were

concluded between Mercedes-Benz Group AG on the

one side and Renault and/or Nissan on the other,

which provide for the right of termination for a party

to the agreement in the case of a change of control of

another party. With the exception of the master coop-

eration agreement, the aforementioned cooperation

agreements were transferred from former Daimler AG

to Mercedes-Benz AG in 2019.

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–

An agreement with BAIC Motor Co., Ltd. related to a

– An agreement between Mercedes-Benz Group AG and

BMW AG which contains basic provisions for five joint

ventures between Daimler Mobility Services GmbH

and group companies of BMW AG in the field of

mobility services (car sharing, ride hailing, charging,

multimodal services and a joint venture holding the

common brand). This agreement originally encom-

passed six joint ventures, but the parking joint ven-

ture (PARK NOW Group Holding B. V.) was sold in

financial year 2021. A change of control is defined as

the acquisition by a third party of more than 50% of

the voting rights or shares, or the conclusion of a con-

trol agreement over Mercedes-Benz Group AG by a

third party. As a result of a change of control, the

other party may initiate a shoot-out process, which is

more precisely defined in the agreement.

jointly held company for the production and distribu-

tion of cars of the Mercedes-Benz brand in China, by

which BAIC Motor Co., Ltd. is given the right to termi-

nate the agreement or exercise a put or call option in

the case that a third party acquires one third or more

of the voting rights in Mercedes-Benz Group AG.

An agreement between Mercedes-Benz Group AG,

BMW AG and Audi AG related to the acquisition of the

companies of the HERE Group and the associated

establishment of There Holding B.V. In the event of a

change of control of one of the parties to the agree-

ment, the agreement obligates the party in question

to offer its shares in There Holding B.V. to the other

parties to the agreement (shareholders). A change of

control of Mercedes-Benz Group AG occurs if one per-

son gains control over Mercedes-Benz Group AG,

whereby control is defined as (i) having control of

more than 50% of the voting rights, (ii) being able to

control more than 50% of the voting rights eligible to

vote at the General Meetings on all or nearly all mat-

ters, or (iii) the right to determine the majority of the

members of the Board of Management or of the

Supervisory Board. A change of control also occurs if

competitors of the HERE Group or certain possible

competitors of the HERE Group in the technology

industry acquire a shareholding of at least 25% of

Mercedes-Benz Group AG. If none of the other parties

acquire these shares, the agreement gives them the

right to dissolve There Holding B.V.

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Risk and Opportunity Report

The Mercedes-Benz Group is exposed to a large number

of risks that are directly linked with the business activi-

ties of Mercedes-Benz Group AG and its subsidiaries or

which result from external influences. A risk is under-

stood as the danger that events, developments or

actions will prevent the Group or one of its segments

from achieving its targets. This includes monetary and

non-monetary risks. At the same time, it is important to

identify opportunities in order to safeguard and

enhance the competitiveness of the Mercedes-Benz

Group. An opportunity is understood as the possibility

due to events, developments or actions to safeguard or

to surpass the planned targets of the Group or of a seg-

ment.

system of the Mercedes-Benz Group and is a fixed com-

ponent of the overall planning, management and report-

ing process in the companies, segments and corporate

functions.

The opportunity management system at the

Mercedes-Benz Group is based on the risk management

system. The objective of opportunity management is to

recognise the possible opportunities arising in business

activities resulting from positive developments at an

early stage, and to use them in the best possible way for

the Group by taking appropriate measures. By taking

advantage of opportunities, planned targets should be

met or exceeded.

In order to identify business risks and opportunities at

an early stage and to assess and manage them actively,

the Board of Management applies effective manage-

ment and control systems, which have been brought

together in an overall risk and opportunity management

system. Risks and opportunities are not offset.

In the context of the planning, risks and opportunities

are considered with an observation period of up to five

years. The reporting of risks and opportunities in this

report generally relates to a period of one year.

The assessment of individual risks and opportunities

takes place on the basis of their probability of occur-

rence and possible impact. Multiplying the probability of

occurrence by the possible impact results in the

C.ꢀꢁ

Assessment of the risks and opportunities based on the expected

value for each category

expected monetary value, which in this reporting year

for the first time also forms the basis for the classifica-

tion of the risk and opportunity categories in the levels

Level

Low

Expected value

< €500 million “low”, “medium” or “high”. The expected monetary value

Medium

High

≥ €500 million to €1 billion

is also used and reported as an additional assessment

dimension within the framework of internal risk and

opportunity reporting. In principle, the quantification

of risks and opportunities in this report is carried out

by summarising the expected values of the individual

≥ €1 billion

Risk and opportunity management system



risks and opportunities in categories C.ꢀꢁ For the first

time, the assessment and reporting of the level of risks

and opportunities takes into account both planned and

already effective risk-reducing measures (net view) and

is considered in relation to EBIT, unless otherwise indi-

cated. Applying the described procedure to the previous

year has no effect on the classification of risks and

opportunities as “low,” “medium,” or “high” in compari-

son with the previous year.

The risk management system is intended to systemati-

cally and continually identify, assess, control, monitor

and report on risks threatening the Mercedes-Benz

Group’s existence and other material risks jeopardising

the Group’s success, in order to support the achieve-

ment of corporate targets and to enhance risk aware-

ness at the Group. The risk management system is inte-

grated into the value-based management and planning

1ꢃ0

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

In order to assess the Group’s risk-bearing capacity,

Furthermore, the employees responsible for risk man-

agement have the task of defining measures and if nec-

essary initiating such measures to avoid, reduce or pro-

tect the Group against risks. Within the context of

opportunity management, measures are to be taken

with which opportunities can be seized, improved and

(fully or partially) realised. The cost-effectiveness of a

the potential effects of the risks on earnings, with con-

sideration of correlation effects, are analysed using a

Monte Carlo simulation (confidence level: 99%). In the

case of symmetrical risk and opportunity profiles, the

potential effects on earnings of the opportunities are

also included. The aggregated risks and opportunities

are compared with the reported equity of the Mercedes- measure is assessed before its implementation. The

Benz Group as a risk cover.

possible impact and probability of occurrence of all

risks and opportunities of the individual entities and the

related measures that have been initiated are continu-

ally monitored. The management activities take place at

the level of the segments based on individual risks and

opportunities. Mercedes-Benz Group AG monitors

implementation by the segments as part of its regula-

tory, legal and compliance functions.

Risks and opportunities resulting from sustainability

aspects are integrated into the Group-wide risk man-

agement process at Mercedes-Benz Group. They are

understood to be conditions, events, or developments

involving environmental, social or governance factors

(ESG), the occurrence of which may have an actual or

potential impact on the Mercedes-Benz Group’s profita-

bility, cash flows and financial position, as well as on its

reputation. Climate-related risks and opportunities in

connection with the recommendations of the Task Force

on Climate-related Financial Disclosures (TCFD) are part

The organisational embedding of risk and opportu-

nity management takes place through the risk manage-

ment organisation established at the Group. Responsi-

bility for operational risk management and for the risk

of the environment area and are thus also identified and management processes lies with the segments, corpo-

assessed as part of the risk management process.

ESG-related risks and opportunities that are very likely

to have a serious negative impact on non-financial

aspects in accordance with the CSR Directive Imple-

mentation Act (CSR-RUG) do not exist from today’s per-

spective.

rate functions, organisational entities and companies.

They report on the specific risks and opportunities to

the next-higher level unit on a regular basis. Significant,

unexpected risks must be reported immediately.

Through the segments, this information is passed on to

Group Risk Management for reporting to the Board of

Management, the Audit Committee and the Supervisory

Board. The Group Risk Management Committee (GRMC)

is responsible for the continual improvement of the risk

Risk and opportunity management is based on the prin-

ciple of completeness. This means that at the level of

the individual entities, all identified risks and opportuni- management system and for assessing its suitability

ties enter the risk management process.

and effectiveness. The GRMC is composed of represent-

atives of Accounting & Financial Reporting, the Legal

department, Compliance, Corporate & Information

Security and the members responsible for finance of the

Boards of Management of Mercedes-Benz Group AG,

Mercedes-Benz AG, and Mercedes-Benz Mobility AG. It

is chaired by the Board of Management members of

Mercedes-Benz Group AG responsible for Finance &

Controlling / Mercedes-Benz Mobility and for Integrity

and Legal Affairs. The Internal Auditing department con-

tributes material findings on the internal control and

risk management system.

The scope of consolidation for risk and opportunity

management generally corresponds to the scope of the

consolidated financial statements. The group of compa-

nies included in the consolidation can be expanded

from a risk perspective. The risks and opportunities of

the segments and operating units, important associated

companies, joint ventures, joint operations and the cor-

porate departments are included.

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Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

The internal control system with regard to the

The Audit Committee and the Supervisory Board of

Mercedes-Benz Group AG and the Supervisory Boards of

Mercedes-Benz AG and Mercedes-Benz Mobility AG are

responsible for monitoring the internal control and

risk management system. The Internal Auditing

department monitors whether the statutory conditions

and the Group’s internal guidelines concerning the

internal control and risk management system of the

Group are adhered to. If required, measures are initiated

in cooperation with the respective management. Exter-

nal auditors audit the system for the early identification

of risks, which is integrated in the risk management sys-

tem, for its general suitability to identify risks threaten-

ing the existence of the Group; in addition, in the con-

text of the audit of the consolidated financial

accounting process has the objective of ensuring the

correctness and effectiveness of accounting and finan-

cial reporting. It is designed in line with the internation-

ally recognised framework for internal control systems

of the Committee of Sponsoring Organisations of the

Treadway Commission (COSO Internal Control – Inte-

grated Framework), is continually developed further,

and is an integral part of the accounting and financial

reporting processes in the segments, corporate func-

tions, organisational units and companies. The system

includes principles and procedures as well as preven-

tive and detective controls.

The effectiveness of the internal control system is sys-

tematically assessed with regard to the corporate

accounting process. The first step consists of risk analy-

statements, they report to the Audit Committee and the

Supervisory Board on any significant weaknesses that

sis and a definition of control with the objective of iden- have been recognised in the accounting-related internal

tifying significant control weaknesses relating to the

processes of corporate accounting and financial report-

ing in the main companies, organisational entities and

corporate functions. The controls required are then

defined and documented in accordance with Group-

wide guidelines. Random samples are regularly tested

to assess the effectiveness of the controls. Those tests

constitute the basis for self-assessment of the appro-

priate magnitude and effectiveness of the controls. The

results of this self-assessment are documented and

reported in a Group-wide IT system; identified control

weaknesses are eliminated. At the end of the annual

cycle, the companies, organisational entities and corpo-

rate functions under consideration confirm the suitabil-

ity and effectiveness of the internal control system with

regard to the corporate accounting process.

control and risk management system.

Non-accounting related controls are documented in var-

ious systems. The Group Risk Management Committee

(GRMC) is responsible for the assessment of the suita-

bility and effectiveness of the Group-wide internal

control system with regard to the scope of business

operations and the Group’s risk situation. The Board of

Management, Audit Committee and Supervisory Board

are regularly informed about potential significant con-

trol weaknesses and the effectiveness of the control

mechanisms installed.

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Annual Report 2021 · Mercedes-Benz Group

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Risks and opportunities

C.ꢀꢂ

expected value

The following section describes risks and opportunities

that can have a significant influence on the profitability,

cash flows and financial position of the Mercedes-Benz

Group. In general, the reporting of risks and opportuni-

ties takes place in relation to the individual segments.

Following the spin-off and hive-down of the Daimler

commercial vehicle business, the business operations of

the Mercedes-Benz Group are managed in the Mercedes-

Category

Risk Opportunity

Industry and business risks and opportunities

General market risks and opportunities

Medium

High

Risks relating to the legal and political frame-

work

High

Low

-

Procurement market risks and opportunities

Low

B

enz Cars, Mercedes-Benz Vans and Mercedes-Benz

Company-specific risks and opportunities

Risks from research and development

Production risks

Mobility segments. If no segment is explicitly mentioned,

the risks and opportunities described relate to all the

segments.

Low

-

Risks and opportunities from purchasing and

logistics

High

Low

In addition to the risks and opportunities described

below, risks and opportunities that are not yet known or

classified as not material can also influence profitability,

cash flows and financial position in the future.

Information technology risks

Personnel risks

-

Risks related to equity investments and partner-

ships

Medium

-

Table



C.ꢀꢂ provides an overview of the expected

Financial risks and opportunities

Exchange-rate risks and opportunities

Interest-rate risks and opportunities

Commodity-price risks and opportunities

Credit risks

monetary values of the individual categories.

Low

High

Low

-

Economic conditions

Country risks

-

Like the majority of economic research institutes, the

Mercedes-Benz Group expects the growth dynamism of

the global economy in ꢂꢀꢂꢂ to be less pronounced

than in the previous year. But with GDP growth of about

Risks of restricted access to capital markets

-

Risks and opportunities from changes in credit

ratings

Low

Risks and opportunities relating to pension

plans

4%, the rate of expansion is still expected to be signifi-

Medium

cantly above the long-term average. Growth assump-

tions and forecasts for the global economic develop-

ment in 2022 are described in the “Outlook” section.

further exacerbation of tensions between the United

States and China and a further deterioration of political

relations between the European Union and China could

lead to increased uncertainty and adversely affect both

global economic prospects and the business develop-

ment of the Mercedes-Benz Group.

The economic outlook is connected with great uncer-

tainty. The economic environment constitutes the

framework conditions for the risks and opportunities

listed in the following categories and is included as a

premise in the quantification of these risks and oppor-

tunities.

Another significant uncertain factor is the further course

of the covid-ꢁꢈ pandemic represents a significant

uncertainty factor. Insufficient vaccination progress, fur-

ther waves of infection and new virus variants could

make even more comprehensive and drastic contain-

ment measures necessary than assumed in the Outlook

section. Mobility restrictions or even further lockdowns

could affect economic growth and automotive markets

Uncertainties for the global economy and the business

development of the Mercedes-Benz Group may arise in

particular from geopolitical and trade policy develop-

ments worldwide. The main factor in this respect is a

further escalation of the Russia-Ukraine War or, in the

worst case, its spread to other countries. In addition,

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Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

regionally or even globally, causing even more pro-

Industry and business risks and opportunities

nounced disruptions in international trade routes and

global supply chains. On the other hand, if the pan-

demic is overcome more quickly than currently

assumed, this could result in a correspondingly more

favourable development of the global economy and

automotive markets, as well as a significant reduction in

covid-19-related disruptions to global supply chains.

General market risks and opportunities

The risks and opportunities for the economic develop-

ment of automotive markets are strongly affected by the

cyclical situation of the global economy. The assess-

ment of market risks and opportunities is linked to

assumptions and forecasts about the overall develop-

ment of markets in the regions in which the Mercedes-

Benz Group is active. The economic risks described

above form the basis for the assessment of the existing

risks and opportunities. The possibility of markets

developing better or worse than assumed in the plan-

ning, or of changing market conditions, generally exists

for all segments of the Group.

In addition to pandemic-related disruptions in supply

chains, bottlenecks for semiconductors and other

important industrial components also constitute

uncertainties. Persistently high or even further rises in

energy and raw-material prices can also have an

impact on the risks and opportunities described in the

risk categories.

Possible declines in vehicle sales may be caused in par-

ticular by the partially unstable macroeconomic envi-

ronment and in the context of political or economic

uncertainties. The situation in the Chinese real-estate

sector remains tense, as described above. Negative

consequences for both Chinese and global economic

growth cannot be ruled out. As a result of the covid-19

pandemic, risks still exist for the development of unit

sales and the availability of components in the after-

sales business. Rising energy and oil prices and volatile

exchange rates can also lead to market uncertainty and

thus to falling demand for vehicles. The lack of market

acceptance for electric vehicles can also lead to risks

in the development of unit sales – especially in the

Mercedes-Benz Vans segment – and have a negative

impact on earnings. Continued high inflation may lead

to a weakening of purchasing power and thus to a

decline of demand in the automotive sector. The devel-

opment of markets, unit sales and inventories is contin-

ually analysed and monitored by the segments; if nec-

essary, specific marketing and sales programmes are

High energy prices, along with other factors, are a major

driver of the recent exceptionally high inflation rates in

the United States and some European and Latin Ameri-

can economies. If inflation remains significantly higher

than currently expected over the course of the year, pri-

vate consumption, economic growth and demand for

cars and vans could suffer. In addition, important cen-

tral banks could see themselves forced by this develop-

ment to raise interest rates excessively, which could

result in turbulence on the financial markets, lower con-

sumer demand, restraint in companies’ investment and

weaker economic development overall.

Further economic uncertainties are the extremely high

levels of corporate debt by global standards and espe-

cially the crisis in the real-estate sector in China. If,

instead of the expected orderly consolidation, there is

an uncontrolled collapse of the real estate sector, this

would have significant negative consequences for eco-

nomic growth and the financial markets. Other highly

indebted companies, also outside the real-estate sector, implemented.

could be caught up in the crisis. In an extreme case, this

could lead to a banking and financial crisis in China with Volatilities with regard to market developments can also

possible global repercussions.

lead to the overall market or regional conditions for the

automotive industry developing better than assumed in

the internal forecasts and premises, resulting in busi-

ness opportunities in the market. Opportunities may

also arise from an improvement in the competitive situ-

ation or a positive development of demand. The utilisa-

tion of opportunities is supported by sales and market-

ing campaigns.

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Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Due to the partly difficult financial situation of some

In connection with the sale of vehicles, the Mercedes-

Benz Group offers customers a wide range of financing

and leasing options. The resulting risks for the

Mercedes-Benz Mobility segment are mainly due to bor-

rowers’ worsening creditworthiness, so receivables

might not be recoverable in whole or in part because of

customers’ insolvency (default or credit risk). The

Mercedes-Benz Group counteracts credit risks by

means of creditworthiness checks on the basis of

standardised scoring and rating methods, the collateral-

isation of receivables, and effective risk management

with a firm focus on monitoring both internal and mac-

roeconomic leading indicators.

dealerships and vehicle importers, support actions

might become necessary to ensure the performance of

the business partners. The financial situation of strate-

gically relevant dealerships and vehicle importers is

continuously monitored. The loss of important dealer-

ships and vehicle importers can lead to customer

demand not being fully served and lower unit sales.

Taking over the costs of contract cancellations and of

processing outstanding customer contracts cannot be

ruled out as a result of dealer insolvencies and may

have a negative impact on earnings.

The launch of new products by competitors, more

aggressive pricing policies and poorer effective pricing

for products such as electric vehicles can lead to

increasing competitive and price pressure in the auto-

motive segments and have a negative impact on profit-

ability. The discontinuation of government subsidies for

electric vehicles can also negatively affect their pricing

and minimise profit margins. Continuous monitoring is

carried out in order to recognise risks at an early stage.

Depending on the situation, product-specific and possi-

bly regionally different measures are taken to support

weaker markets. The Mercedes-Benz Group also applies

various programmes to boost sales, including financial

incentives for customers.

In order to take into account the credit risks related to

the impact of the covid-19 pandemic on the global

economy, the management of the Mercedes-Benz

Mobility segment has implemented a special crisis

guideline containing rules on how customers can be

supported as flexibly as possible, but in a risk manage-

ment-oriented manner, with payments being deferred

during the crisis. On this basis, the Mercedes-Benz

Mobility segment has granted selected customers

improved payment terms in the form of deferrals, and

deferrals have also been granted due to government

support programmes. The customer support pro-

grammes offered by Mercedes-Benz Mobility largely

expired in 2021, while the government support pro-

grammes continued to exist in some markets.

In connection with leasing agreements, risks and oppor-

tunities also arise if the market value of a leased vehicle

at the end of the agreement term differs from the resid-

ual value that was originally calculated and forecasted

at the time the agreement was concluded and used as a

basis for the leasing instalments. Residual-value man-

agement processes have been defined to counteract

these risks relating to vehicles’ residual values.

Depending on the region and the current market situa-

tion, the measures taken generally include continuous

market monitoring as well as, if required, price-setting

strategies or sales promotion measures designed to

regulate vehicle inventories. The quality of market fore-

casts is verified by periodic comparisons of internal and

external sources, and, if required, the determination of

residual values is adjusted and further developed with

regard to methods, processes and systems.

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The level of market risks has decreased compared with

Mercedes-Benz Cars and also Mercedes-Benz Vans

faces the described risks with respect to regulations on

mandatory targets for the average fleet fuel consump-

the previous year due to the deconsolidation of the

Daimler commercial vehicle business. Opportunities

increased due to the improved expected development

of demand for vehicles in the automotive segments.

tion and CO emissions of new vehicles especially in the

2

markets of China, Europe and the United States. The

Mercedes-Benz Group gives these targets due consider-

ation in its product planning. The increasingly challeng-

ing target of a fully electric future requires significant

proportions of actual unit sales of plug-in hybrids and

Risks related to the legal and political framework

The automotive industry is subject to extensive govern-

mental regulation worldwide. Risks and opportunities

from the legal and political framework have a considera- cars with other types of electric drive. We assume that

ble influence on the Mercedes-Benz Group’s future

business success. Regulations concerning vehicles’

the ambitious statutory targets can be met, whereby in

some markets, the modalities for target achievement

emissions, fuel consumption, safety and certification, as granted by law will have to be utilised - including the

well as tariff aspects and taxes in connection with the

sale or purchase of vehicles or vehicle parts, play an

important role.

acquisition of external credits. The market success of

alternative drive systems is greatly influenced not only

by customer acceptance but also by regional market

conditions such as the battery-charging infrastructure

and state support.

The Mercedes-Benz Group constantly monitors the

development of the legal and political framework and

attempts to anticipate foreseeable requirements and

long-term objectives at an early stage in the product

development process. In particular, changes in the legal

and political framework at short notice can be associ-

ated with additional costs or higher investments. Risks

related to legal and political framework increased due

to Russia-Ukraine War compared to the previous year.

Far-reaching risks can result from the Russia-Ukraine

War. The war can have a negative impact on the devel-

opment of unit sales, production processes, and pro-

curement and logistics, for example through interrup-

tions in supply chains or energy supply, or bottleneck

situations for components as well as raw materials and

upstream products. Even higher cyber risk can not be

ruled out. Collaboration with partners and cooperative

ventures are also subject to higher risks. Outstanding

trade receivables may result in higher default, country

and currency risks due to restrictions on cross-border

payment transactions and limited convertibility of the

russian rouble. The higher country risks mainly include

potential impairments on trade receivables as well as

property, plant and equipment and inventories of the

automobile segments. In the Mercedes-Benz Mobility

segment, negative effects may result from sanctions

and a weaker economic environment for our customers

in Russia and other markets, which may be reflected in

increased payment arrears and credit defaults. Further-

more, as a result of higher inflation rising refinancing

costs in the capital markets may lead to negative effects

on the segment’s interest margin as well as cost devel-

opment. In addition, temporary capital bottlenecks may

arise in the context of refinancing in the Russian bank-

ing market, which may result in a claim on a global guar-

antee in connection with outstanding financial liabilities

to banks. In addition, higher risks may arise from the

insolvency of subsidiaries. These risks could be

Many countries and regions have implemented legal

limits for the fuel consumption and/or CO emissions of

2

car fleets, with varying target limits. Non-compliance

with regulations applicable in the various markets might

result in significant penalties and reputational harm,

and might even mean that vehicles with conventional

drive systems could not or could no longer be regis-

tered in the relevant markets. The Mercedes-Benz

Group counteracts these risks by with the transforma-

tion towards electric mobility and the associated rea-

lignment of its products.

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exacerbated by the potential expropriation of assets of

Procurement market risks and opportunities

Russian subsidiaries. Risks from the Russia-Ukraine War

are being continually monitored; possible scenarios are

being continually adapted to the current geopolitical

situation and analysed.

Risks and opportunities relating to procurement have

been restructured through the introduction of the new

category “Risks and opportunities from purchasing and

logistics”, and arise for the automotive segments in par-

ticular from fluctuations in prices of commodities, raw

materials and energy. Certain raw materials are

required for the manufacture of vehicle components

and vehicles, which are purchased on the world market.

Industry-specific and country-specific barriers to trade

in foreign markets that are important for the Mercedes-

Benz Group could have a negative impact on both pro-

duction costs and the entire value chain. The conclusion The level of costs depends on the price development of

or amendment of free-trade agreements can result in

both risks and opportunities for the Group’s profitability

and liquidity.

commodities, raw materials and energy. Price fluctua-

tions are expected with uncertain and inconsistent

trends also for the year 2022. For example, raw-material

markets can be impacted by uncertainties and political

crises – combined with possible supply bottlenecks –

as well as by volatile demand for specific raw materials.

In general, the ability to pass on the higher costs of

commodities and other materials in the form of higher

prices for manufactured vehicles is limited because of

strong competitive pressure in the international auto-

motive markets. Rising raw-material prices may there-

fore have a negative impact on the profit margins of the

vehicles sold and thus lead to lower earnings in the

respective segment. In order to counteract possible

losses in earnings, Mercedes-Benz continuously moni-

tors the development of raw-material and energy prices

and enters into negotiations with suppliers.

Individual countries may attempt to defend and

improve their competitiveness in the world’s markets by

resorting to interventionist and protectionist meas-

ures. For example, setting up or expanding production

facilities, increasing local purchasing or the requirement

to carry out local research and development can result

in significantly increased investment or higher running

costs. In addition, barriers to market access such as

more difficult certification processes and delays to cer-

tification or very complicated tariff procedures can

make it more difficult to import into those countries.

Investing in those countries can limit the impact of pro-

tectionist measures.

Stricter regulations on the protection of personal data

can also lead to higher costs in the event of violations of Company-specific risks and opportunities

the law, for example, if the authorities prescribe meas-

ures to be taken, impose penalties and/or decide on the

suspension of business licences. In order to counteract

these potential risks and to identify deviations at an

early stage, continuous monitoring and an analysis of

these regulations are carried out.

Risks and opportunities from research

and development

Technical developments and innovations are of key

importance for the safe and sustainable mobility of the

future. The transformation towards electric mobility and

comprehensive digitisation have resulted in ambitious

development targets and the market launch of new

technologies. Through the design of the product range,

technical innovations are integrated in the strategic

product planning of the automotive segments. In addi-

tion to the resulting opportunities, decisions in favour of

certain technologies and the continuously growing

scope of emission, consumption and safety require-

ments to be met are associated with risks, and are pre-

sented in the new category “Risks and opportunities

from research and development”.

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Annual Report 2021 · Mercedes-Benz Group

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In the year 2020, Mercedes-Benz Group AG and

In the context of product launches – especially also

with the expansion of sub-brands – the required com-

ponents and equipment must be available. To avoid

restrictions in this context, the related processes are

continuously evaluated and improved. In order to

secure and enhance the long-term future viability of

production facilities in the automotive segments, mod-

ernisation, expansion, construction and restructuring

measures are carried out as required. The launch of

new products of the brands Mercedes-Benz, Mercedes-

AMG, Mercedes-Maybach, Mercedes-EQ and the

G-Class usually entails high investments. In addition,

there may be inefficiencies in the production process

and, as a result, a temporary reduction in production

volumes.

Mercedes-Benz USA, LLC (MBUSA) reached agreements

with various US authorities to settle civil and environ-

mental claims regarding emission control systems of

certain diesel vehicles, which have taken legal effect.

We refer to our further explanations under legal and tax

risks and opportunities. With the settlement reached,

Mercedes-Benz Group AG and MBUSA have agreed to,

among other things, pay civil penalties, conduct an

emission modification programme for affected vehicles,

provide extended warranties, undertake a nationwide

mitigation project, take certain corporate compliance

measures and make other payments. If the aforemen-

tioned obligations are not complied with, there will be

the risk that cost-intensive measures will have to be

taken and/or significant stipulated penalties will

become due.

Due to low plant availability or failures of production

or factory equipment, there is a risk of internal delays

in vehicle production and consequent costs being

incurred. Production equipment is continuously main-

tained and modernised. As a precaution, spare parts are

Production risks and opportunities

Due to the increasing technical complexity and the goal

of maintaining and constantly enhancing quality stand-

ards for the luxury vehicles of the Mercedes-Benz Group, held available or, if required, spare machines are pur-

risks can arise in the automotive segments in connec-

tion with, among other things, the launch and manufac-

ture of products. Risks with a negative impact on earn-

ings also cannot be ruled out in connection with

increasing automation and networking of production

facilities. Mercedes-Benz has instruments for reducing

and mitigating these risks through the implementation

of suitable management systems and the systematic

concentration of product development and process

changes. These production-related risks and opportuni-

ties, as well as the underlying measures to manage

them, are summarised and described in this new cate-

gory “Production risks and opportunities”.

chased for the production plants that might be at risk.

Warranty and goodwill cases could arise if the quality

of the products or the parts installed in the products

does not meet requirements despite appropriate quality

assurance processes, if regulations are not fully com-

plied with, or if support cannot be provided in the

required form in the event of problems and product

maintenance. The Mercedes-Benz Group recognises

appropriate provisions for warranty and goodwill cases.

Nevertheless, it cannot be ruled out that recalls and

field measures will lead to expenses. Possible claims in

connection with such risks are examined and, if neces-

sary, the appropriate measures are initiated for the

affected products.

Risks and opportunities from purchasing

and logistics

Interruptions in global supply chains, bottleneck situa-

tions for supplied components, and production stop-

pages or underutilisation of production capacities at

suppliers are reported in the new category “Risks and

opportunities from purchasing and logistics”. Interrup-

tions in global supply chains, especially caused by

bottlenecks for electronic components and other impor-

tant parts, as well as possible failures in supply by

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energy providers, can cause bottlenecks in the automo-

Information technology risks and opportunities

tive segments. In order to avoid such bottleneck situa- The systematically pursued digitisation strategy enables

tions with supplied parts and components, we place

importance on being able to offset capacity bottlenecks

the Mercedes-Benz Group to utilise new opportunities

to increase customer benefit and the value of the com-

through forward-looking planning. Supplier management pany. Nonetheless, the high penetration of information

is undertaken for the prevention of risks with the aim of

ensuring the quantity and quality of the components

technology (IT) at all divisions also brings risks for their

business and production processes, as well as for their

required to produce the vehicles. Lack of availability and services and products. Extensive changes in the existing

quality problems with certain vehicle parts can lead to

production downtimes and cause costs.

system landscape, for example, the focus on strategic

partnerships for the transformation of the IT infrastruc-

ture, can also lead to risks.

The financial situation of some suppliers remains diffi-

cult. This can be caused by continuing uncertainty in

connection with the covid-19 pandemic, higher prices of

commodities, raw materials and energy as well as the

lack of availability of components, but also by changed

delivery schedules in connection with advancing elec-

trification. The resulting possible production stop-

pages or under-utilisation of production capacities

at suppliers can also cause disruption of the supply

chain in the automotive segments and prevent vehicles

from being completed and delivered to customers on

The ever-growing threat from cybercrime and the spread

of aggressive malicious code brings risks that can affect

the availability, integrity and confidentiality of informa-

tion and IT-supported operating resources. Despite

extensive precautions, in the worst-case scenario, this

can lead to a temporary interruption of IT-supported

business processes with severe negative effects on the

Group’s earnings. In addition, the loss or the misuse of

sensitive data may under certain circumstances lead to

a loss of reputation. In particular, stricter regulatory

time. Support measures may be necessary to ensure the requirements such as the EU Data Protection Directive

continuation of suppliers’ production and sales. Supplier and related legislation may, among other things, give

risk management aims to identify potential financial

bottlenecks for suppliers at an early stage and to initi-

ate suitable countermeasures. Specifically, depending

on the warning signals recorded and the internal classi-

fication, regular reporting dates are agreed upon for

suppliers on which key performance indicators are

reported to the Mercedes-Benz Group and any support

measures can be determined if necessary. If suppliers

cannot cover their fixed costs, there is also the risk that

they may demand compensation payments. Necessary

capacity expansion at suppliers’ plants could also

require participation in their costs.

rise to claims by third parties and result in costly regula-

tory requirements and penalties with an impact on

earnings.

It is essential for the globally active Mercedes-Benz

Group and its wide-ranging business and production

processes that information is available and can be

exchanged in an up-to-date, complete and correct form.

The Group’s internal framework for IT security is based

on international standards and its protective measures

also apply industry standards and good practice. New

regulatory requirements for cyber security and cyber

security management systems are taken into account in

the further development of processes and policies.

Appropriately secure IT systems and a reliable IT infra-

structure must be used to protect information. Cyber

threats must be identified over the entire life cycle of

applications and IT systems, and dealt in line with their

seriousness. Particular attention is paid to risks that

could result in the interruption of business processes

due to the failure of IT systems or which could cause

the loss or corruption of data. The advancing

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Annual Report 2021 · Mercedes-Benz Group

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digitisation and connectivity of production equipment is

accompanied by coordinated technical and organisa-

tional security measures.

In addition to the demographic development, the digital

transformation also requires that the company contin-

ues to adapt to changes and derives measures such as

securing a qualified next generation of specialists and

managers, especially with regard to technical develop-

ments. This is addressed through various measures,

including targeted qualification. We counter economic,

market and competitive fluctuations with the estab-

lished time and flexibility instruments to enable us to

react appropriately to the situation. In order to achieve

the long-term reduction in personnel costs necessary

for the transformation, the Group’s management and the

Due to growing requirements concerning the confidenti-

ality, integrity and availability of data, the Mercedes-

Benz Group has implemented various preventive and

corrective measures so that the related risks are mini-

mised and possible damage is limited. For example, the

Group reduces potential interruptions of operating pro-

cesses in data centres by means of mirrored data sets,

decentralised data storage, outsourced data backups

and IT systems designed for high availability. Emergency General Works Council concluded an agreement in 2019

plans are developed and employees are trained and

regularly sensitised in order to maintain operating capa-

bility. Specific threats are analysed and countermeas-

ures are coordinated at a globally active Cyber Intelli-

gence & Response Centre. The protection of products

and services against the danger of hacking and cyber-

crime is continually developed.

which includes a staff-reduction programme. Due to the

covid-19 pandemic and the fact that the staff-reduction

programme is voluntary for both parties, there is a risk

that implementation may not be able to take place to

the full extent planned. Risks also exist in particular due

to upcoming negotiations on wage conditions in the

metal and electrical industry and the associated possi-

ble production losses.

The level of information technology risks has decreased

compared with the previous year due to the deconsoli-

dation of the Daimler commercial vehicle business.

Personnel risks are lower than in the previous year due

to the deconsolidation of the Daimler commercial vehi-

cle business and the inclusion of significant transforma-

tion risks in the planning.

Personnel risks and opportunities

Competition for highly qualified staff and management

is still very intense in the industry and the regions in

which the Mercedes-Benz Group operates. The Group’s

future success also depends on the extent to which it

succeeds over the long term in recruiting, integrating

and retaining specialist employees. The established

human-resources instruments take such personnel risks

into consideration. One focus of human resources man-

agement is the targeted personnel development and

further training of the workforce. Among other things,

employees benefit from a wide range of training oppor-

tunities and the transparency created within the frame-

work of performance management. In order to remain

successful as a company, we continuously develop the

way we work together and our management culture.

Risks and opportunities related to equity

investments and partnerships

Cooperation with partners in shareholdings and part-

nerships is of key importance to the Mercedes-Benz

Group, both in the transformation towards electric

mobility and comprehensive digitisation, and in connec-

tion with mobility solutions. Especially with new tech-

nologies, these shareholdings help to utilise synergies

and improve cost structures in order to respond suc-

cessfully to the competitive situation in the automotive

industry.

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The Mercedes-Benz Group generally participates in the

The Mercedes-Benz Group is generally exposed to risks

and opportunities from changes in market prices such

as currency exchange rates, interest rates and commod-

ity prices. Market price changes can have a negative or

positive influence on the Group’s profitability, cash

flows and financial position. The Mercedes-Benz Group

systematically manages and monitors market price risks

and opportunities primarily directly in the context of its

business operations and financing activities, and

applies derivative financial instruments for hedging pur-

poses where needed, thus limiting both market price

risks and opportunities.

risks and opportunities of shareholdings in line with its

equity interest, and is also subject to share-price risks

and opportunities if such companies are listed on a

stock exchange. After the spin-off and hive-down of the

Daimler commercial vehicle business, this also applies

to Daimler Truck Holding AG.

The remeasurement of shareholdings in relation to its

carrying value can lead to risks and opportunities for

the segment to which it is allocated. Furthermore, ongo-

ing business activities, especially the integration of

employees, technologies and products, can result in

risks. In addition, further financial obligations or an

additional financing requirement can arise. Risks from

shareholdings exist above all at Mercedes-Benz Mobil-

ity, as well as at the shareholdings directly allocated to

the Group. The shareholdings are subject to a monitor-

ing process so that, if required, decisions can be

promptly made on whether or not measures can be

taken to support or ensure their profitability. The recov-

In addition, the Group is exposed to credit-, country-

and liquidity-related risks, risks of restricted access to

capital markets and risks from changes in credit ratings.

As part of the risk management process, the Mercedes-

Benz Group regularly assesses these risks by consider-

ing changes in key economic indicators and market

information. Consideration of the pension plan assets to

cover retirement and healthcare benefits is included in

erable value of investments in shareholdings is also reg- the section “Risks and opportunities relating to pension

ularly monitored. The risks related to equity investments plans”.

and partnerships have increased as a result of the

intensified geopolitical and trade policy risks compared

to the previous year.

Exchange-rate risks and opportunities

The Mercedes-Benz Group’s global orientation means

that its business operations and financial transactions

are connected with risks and opportunities related to

fluctuations in currency exchange rates. This applies in

particular to fluctuations of the euro against the US dol-

lar, Chinese renminbi, British pound and other curren-

cies such as those of growth markets. An exchange-rate

risk or opportunity arises in business operations primar-

ily when revenue is generated in a currency different

from that of the related costs (transaction risk). Regu-

larly updated currency risk exposures are successively

hedged with suitable financial instruments (predomi-

nantly currency forwards) in accordance with exchange

rate expectations, which are continually reviewed,

whereby both risks and opportunities are limited. Any

over-collateralisation caused by changes in exposure is

generally reversed by suitable measures without delay.

Exchange-rate risks and opportunities also exist in con-

nection with the translation into euros of the net assets,

revenues and expenses of the companies of the Group

outside the euro zone (translation risk); these risks are

not generally hedged.

Financial risks and opportunities

The following section deals with the financial risks and

opportunities of the Mercedes-Benz Group. These risks

and opportunities can have negative or positive effects

on the profitability, cash flows and financial position of

the Mercedes-Benz Group.

In principle, the Group’s operating and financial risk

exposures underlying its financial risks and opportuni-

ties can be divided into symmetrical and asymmetrical

risk and opportunity profiles. With the symmetrical risk

and opportunity profiles (e.g., currency exposures), risks

and opportunities exist equally, while with the asym-

metrical risk and opportunity profiles (e.g., credit and

country exposures), the risks outweigh the opportuni-

ties.

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Interest-rate risks and opportunities

Changes in interest rates can create risks and opportu-

nities for business operations as well as for financial

Credit risks also arise from the Group’s liquid assets.

Should defaults occur, this would adversely affect the

Group’s financial position, cash flows and profitability.

transactions. The Mercedes-Benz Group employs a vari- The limit methodology for liquid funds deposited with

ety of interest-rate sensitive financial instruments to

manage the cash requirements of its business opera-

tions on a day-to-day basis. Most of these financial

instruments are held in connection with the financial

services business of Mercedes-Benz Mobility. Inter-

est-rate risks and opportunities arise when fixed-inter-

est periods are not congruent between the asset and

liability sides of the balance sheet. By means of refi-

nancing coordinated with the terms of the financing

agreements, the risk of maturity mismatch is minimised

from both an interest-rate and a liquidity perspective.

Remaining interest-rate risks are managed with the use

of derivative financial instruments. The funding activi-

ties of the industrial business and the financial services

business are coordinated at Group level. Derivative

interest-rate instruments such as interest-rate swaps

are used to achieve the desired interest-rate maturities

and asset/liability structures (asset and liability man-

agement).

financial institutions has been continuously further

developed in recent years. In connection with invest-

ment decisions, priority is placed on the borrowers’ very

high creditworthiness and on balanced risk diversifica-

tion. Most liquid assets are held in investments with an

external rating of A or better.

Country risks

Country risk describes the risk of financial loss resulting

from changes in political, economic, legal or social con-

ditions in the respective country, for example due to

sovereign measures such as expropriation or a ban on

currency transfers. The Mercedes-Benz Group is

exposed to country risks that primarily result from

cross-border financing or collateralisation for Group

companies or customers, from investments in subsidiar-

ies and joint ventures, and from cross-border trade

receivables. Country risks also arise from cross-border

cash deposits with financial institutions. The Group

addresses these risks by setting country limits (e.g., for

hard-currency portfolios of Mercedes-Benz Mobility

companies). The Mercedes-Benz Group also has an

internal rating system that divides all countries in which

it operates into risk categories. The country risks have

significantly increased as a result of the intensified geo-

political and trade policy risks compared to the previous

year.

Commodity-price risks and opportunities

As described in the section on “Procurement market

risks and opportunities”, the Mercedes-Benz Group is

exposed to risks arising from changes in prices of raw

materials. A small proportion of the raw-material price

risks, primarily relating to the purchase of precious met-

als, is reduced through the use of derivative financial

instruments.

Risks of restricted access to capital markets

Credit risks

Liquidity risks arise when a company is unable to fully

meet its financial obligations. In the normal course of

business, the Mercedes-Benz Group uses bonds, com-

mercial paper and securitised transactions, as well as

bank loans in various currencies, primarily with the aim

of refinancing its leasing and sales-financing business.

An increase in the cost of refinancing would have a neg-

ative impact on the competitiveness and profitability of

the financial services business to the extent that the

Credit risk describes the risk of financial loss resulting

from a counterparty failing to meet its contractual pay-

ment obligations. Credit risk includes both the direct

risk of default and the risk of a deterioration in credit-

worthiness, as well as concentration risks.

The Group is exposed to credit risks which result pri-

marily from its financial services activities and from the

operations of its vehicle business. The risks from leasing higher refinancing costs cannot be passed on to cus-

and sales financing are dealt with in the General market

risks and opportunities section.

tomers; a limitation of the financial services business

would also have negative consequences for the vehicle

business. Access to capital markets in individual coun-

tries may be limited by government regulations or by a

temporary lack of absorption capacity. In addition,

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pending legal proceedings as well as the Group’s own

quantitative and qualitative analyses, and the ongoing

monitoring of returns and risks. The structure of pen-

sion obligations is taken into consideration with the

determination of the investment strategy for the plan

assets in order to reduce fluctuations of the funded sta-

tus. Compared with the previous year, which was char-

acterized by strong capital market fluctuations due to

the coronavirus crisis, capital market volatilities have

decreased significantly.

business policy considerations and developments may

temporarily prevent the Group from covering any liquid-

ity requirements by means of borrowing in the capital

markets. Contractually agreed credit lines are available

as refinancing instruments. The risk of limited access to

the capital market has decreased compared with the

previous year, as both the planned refinancing volume

and the probability of the risk’s occurrence have

decreased.

Risks and opportunities from changes

Legal and tax risks and opportunities

in credit ratings

Risks and opportunities exist in connection with poten-

tial downgrades or upgrades to credit ratings by the rat-

ing agencies, and thus to the Group’s creditworthiness.

Downgrades could have a negative impact on the

Mercedes-Benz Group’s financing if such a downgrade

leads to an increase in the costs for external financing

or restricts the Group’s ability to obtain financing. A

credit rating downgrade could also discourage investors

from investing in Mercedes-Benz Group AG.

The Group continues to be exposed to legal and tax

risks. Provisions are recognised for those risks if and

insofar as they are likely to be utilised and the amounts

of the obligations can be reasonably estimated.

Legal risks

Regulatory risks. The automotive industry is subject to

extensive governmental regulations worldwide. Laws in

various jurisdictions govern occupant safety and the

environmental impact of vehicles, including emissions

levels, fuel economy and noise, as well as the emissions

of the plants where vehicles or parts thereof are pro-

duced. In case regulations applicable in the different

regions are not complied with, this could result in signif-

icant penalties and reputational harm or the inability to

certify vehicles in the relevant markets. The cost of

compliance with these regulations is considerable, and

in this context, Mercedes-Benz continues to expect a

significant level of costs.

Risks and opportunities relating to pension plans

The companies of the Mercedes-Benz Group grant

defined-benefit pension commitments, which are

largely covered by plan assets, as well as healthcare

commitments to a small extent. The balance of pension

obligations less plan assets constitutes the carrying

amount or funded status of those employee benefit

plans. The measurement of pension obligations and the

calculation of net pension expense are based on certain

assumptions. Even small changes in those assumptions

such as a change in the discount rate or changed infla-

tion assumptions have a negative or positive effect on

funded status and Group equity in the current financial

year, and lead to changes in the periodic net pension

expense in the following financial year. The fair value of

plan assets is determined to a large degree by develop-

ments in the capital markets. Unfavourable or favoura-

ble developments, especially relating to share prices

and fixed-interest securities, reduce or increase the car-

rying value of plan assets. A change in the composition

of plan assets can also have a positive or negative

impact on the future development of the fair value of

plan assets. Risk management for the plan assets takes

place through broad diversification of investments, the

selection of various asset managers on the basis of

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Risks from legal proceedings in general. Mercedes-

Risks from legal proceedings in connection with

diesel exhaust-gas emissions – governmental

Benz Group AG and its subsidiaries are confronted with

various legal proceedings and claims as well as govern-

mental investigations and orders (legal proceedings) on

a large number of topics, including vehicle safety, emis-

sions, fuel economy, financial services, dealer, supplier

and other contractual relationships, intellectual prop-

erty rights (especially patent infringement lawsuits),

warranty claims, environmental matters, antitrust mat-

ters (including actions for damages) as well as investor

litigation. Product-related litigation involves claims

alleging faults in vehicles. Some of these claims are

asserted by way of class actions. If the outcome of such

legal proceedings is detrimental to Mercedes-Benz or

such proceedings are settled, the Group may be

proceedings. Mercedes-Benz is continuously subject to

governmental information requests, inquiries, investiga-

tions, administrative orders and proceedings relating to

environmental, criminal, antitrust and other laws and

regulations in connection with diesel exhaust emissions.

Several authorities and institutions worldwide were, and

still are, active in the form of inquiries, investigations,

procedures and/or orders. These activities particularly

relate to test results, the emission control systems used

in Mercedes-Benz diesel vehicles and/or the interac-

tions of Mercedes-Benz with the relevant authorities as

well as related legal issues and implications, including,

but not limited to, under applicable environmental,

criminal, consumer protection and antitrust laws.

required to pay substantial compensatory and punitive

damages or to undertake service actions, recall cam-

paigns, monetary penalties or other costly actions.

Some of these proceedings and related settlements may In the United States, Mercedes-Benz Group AG and

also have an impact on the Company’s reputation.

Mercedes-Benz USA, LLC (MBUSA) reached agreements

in the third quarter of 2020 with various authorities to

settle civil environmental claims regarding the emission

Up until the effective date of the spin-off of a majority

interest in Daimler Truck AG to Daimler Truck Holding AG control systems of certain diesel vehicles, which have

on 9 December, 2021, Daimler Truck AG and its consoli-

dated subsidiaries were group companies of Daimler AG

become final and effective. The authorities take the

position that Mercedes-Benz failed to disclose Auxiliary

Emission Control Devices (AECDs) in certain of its US

(now Mercedes-Benz Group AG). Insofar as risks result-

ing from the legal proceedings mentioned above materi- diesel vehicles and that several of these AECDs are ille-

alise, and to the extent that the facts underlying such

risks relate to the aforementioned Truck & Bus group

companies, Mercedes-Benz Group AG is entitled to

indemnification claims. Such claims arise vis-à-vis

Daimler Truck AG based on the hive-down of assets and

liabilities of the former Daimler Trucks and Daimler

Buses divisions to Daimler Truck AG in 2019. Vis-à-vis

Daimler Truck Holding AG, such claims arise from the

spin-off of the majority interest in Daimler Truck AG to

Daimler Truck Holding AG in 2021.

gal defeat devices.

As part of these settlements, Mercedes-Benz denies the

allegations by the authorities and does not admit liabil-

ity, but has agreed to, among other things, pay civil pen-

alties, conduct an emission modification programme for

affected vehicles and take certain other measures. The

failure to meet certain of those obligations may trigger

additional stipulated penalties. In the first quarter of

2021, Mercedes-Benz paid the civil penalties.

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As already reported, in April 2016, the U.S. Department

objections against the KBA’s administrative orders men-

tioned above. In early 2021, the KBA issued objection

orders (“Widerspruchsbescheide”) in these proceedings,

thereby not following the arguments brought forward by

Mercedes-Benz. Since Mercedes-Benz continues to

have a different understanding of the relevant legal pro-

of Justice (“DOJ”) requested that Mercedes-Benz con-

duct an internal investigation. Mercedes-Benz con-

ducted such internal investigation in cooperation with

DOJ’s investigation; DOJ’s investigation remains open. In

addition, further US state authorities have opened

investigations pursuant to both state environmental and visions, it has filed lawsuits with the competent admin-

consumer protection laws and have requested docu-

ments and information.

istrative court to have the controversial questions at

issue clarified in a court of law. Irrespective of such

objections and the lawsuits that are now pending,

Mercedes-Benz continues to cooperate fully with the

KBA. The new calibrations requested by the KBA have

been developed by Mercedes-Benz and assessed and

approved by the KBA; the related recalls have been ini-

tiated. It cannot be ruled out that under certain circum-

stances, software updates may have to be reworked, or

further delivery and registration stops may be ordered

or resolved by the Company as a precautionary meas-

ure, also with regard to the used-car, leasing and financ-

ing businesses. In the course of its regular market

supervision, the KBA is routinely conducting further

reviews of Mercedes-Benz vehicles and is asking ques-

tions about technical elements of the vehicles. In addi-

tion, Mercedes-Benz continues to be in a dialogue with

the German Ministry for Digital and Transport (BMDV) to

conclude the analysis of the diesel-related emissions

In Canada, the Canadian environmental regulator Envi-

ronment and Climate Change Canada (“ECCC”) is con-

ducting an investigation in connection with Diesel

exhaust emissions based on the suspicion of potential

violations of, amongst others, the Canadian Environ-

mental Protection Act as well as potential undisclosed

AECDs and defeat devices. Mercedes-Benz continues to

cooperate with the investigating authorities.

In Germany, the Stuttgart public prosecutor’s office

issued a fine notice against Mercedes-Benz in Septem-

ber 2019 based on a negligent violation of supervisory

duties, which became legally binding, thereby conclud-

ing the related administrative offense proceedings

against Mercedes-Benz. The Stuttgart public prosecu-

tor’s office is still conducting criminal investigation pro-

ceedings against Mercedes-Benz employees on the sus- matter and to further the update of affected customer

picion of, amongst others, fraud. In July 2021, the local

court of Böblingen issued penal orders against three

Mercedes-Benz employees based on, amongst others,

fraud, which have become final.

vehicles. In light of the aforementioned administrative

orders issued by the KBA, and continued discussions

with the KBA and the BMDV, it cannot be ruled out com-

pletely that additional administrative orders may be

issued in the course of the ongoing and/or further

investigations. Since 1 September 2020, this also

applies to responsible authorities of other member

states and the European Commission, which conduct

market surveillance under the new European Type

Approval Regulation and can take measures upon

assumed non-compliance, irrespective of the place of

the original type approval, and also to the British market

surveillance authority DVSA (Driver and Vehicle Stand-

ards Agency).

Between 2018 and 2020, the German Federal Motor

Transport Authority (“KBA”) issued subsequent auxiliary

provisions for the EC type approvals of certain

Mercedes-Benz diesel vehicles, and ordered mandatory

recalls as well as, in some cases, stops of the first regis-

tration. In each of those cases, it held that certain cali-

brations of specified functionalities are to be qualified

as impermissible defeat devices. Mercedes-Benz has a

contrary legal opinion on this question. Since 2018,

however, it has (in view of the KBA’s interpretation of

the law as a precautionary measure) implemented a

temporary delivery and registration stop with respect to

certain models, also covering the used-car, leasing and

financing businesses, and is constantly reviewing

whether it can lift this delivery and registration stop in

whole or in part. Mercedes-Benz has filed timely

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In the course of its formal investigation into possible

collusion on clean emission technology, the European

Commission sent a statement of objections to

Mercedes-Benz and other automobile manufacturers in

April 2019. In this context, Mercedes-Benz had filed an

application for immunity from fines (leniency applica-

tion) with the European Commission some time ago. On

prosecutor’s office against Mercedes-Benz, the penal

orders against Mercedes-Benz employees and the civil

settlements with the US authorities, as well as any

ongoing and potential other information requests,

orders and proceedings, it cannot be ruled out that

Mercedes-Benz will become subject to, as the case may

be, significant additional fines and other sanctions,

measures and actions. The occurrence of the aforemen-

tioned events in whole or in part could cause significant

collateral damage including reputational harm. Further,

due to negative allegations or findings with respect to

technical or legal issues by one of the various govern-

mental agencies, other agencies – or also plaintiffs –

could also adopt such allegations or findings. Thus, a

negative allegation or finding in one proceeding, such as

the fine notice issued by the Stuttgart public prosecu-

8

July 2021, the proceedings were closed by way of a

settlement with the European Commission. During the

entire proceedings, Mercedes-Benz Group AG cooper-

ated closely with the European Commission, and the

European Commission granted the company complete

immunity from fines.

In addition to the aforementioned authorities, national

cartel authorities and other authorities of various for-

eign States, including the South Korean Ministry of Envi- tor’s office, the penal orders against Mercedes-Benz

ronment, the South Korean competition authority (Korea employees or the allegations underlying the civil settle-

Fair Trade Commission) and the Seoul public prosecu-

ments with the US authorities, carries the risk of being

tor’s office (South Korea) are conducting various investi- able to have an adverse effect on other proceedings,

gations and/or procedures in connection with Diesel

exhaust emissions.

also potentially leading to new or expanded investiga-

tions or proceedings, including law-suits.

Mercedes-Benz continues to fully cooperate with the

authorities and institutions. Irrespective of such coop-

eration and in light of the past developments, it is pos-

sible that further regulatory, criminal and administrative

investigative and enforcement actions and measures

relating to Mercedes-Benz and/or its employees will be

taken or administrative orders will be issued. Addition-

ally, further delays in obtaining regulatory approvals

necessary to introduce new or recertify existing vehicle

models could occur.

In addition, the ability of Mercedes-Benz to defend itself

in proceedings could be impaired by the fine notice

issued by the Stuttgart public prosecutor’s office, the

penal orders against Mercedes-Benz employees, the

civil settlements with the US authorities and by the

underlying allegations and other unfavourable allega-

tions, as well as by findings, results or developments in

any of the information requests, inquiries, investigations,

administrative or criminal orders, legal actions and/or

proceedings discussed above.

In light of the legal positions taken by U.S. regulatory

authorities and the KBA as well as the South-Korean

Ministry of Environment, amongst others, it cannot be

ruled out that, besides these authorities, one or more

authorities worldwide will reach the conclusion that

other passenger cars and/or commercial vehicles with

the brand name Mercedes-Benz or other brand names

of the Mercedes-Benz Group are equipped with imper-

missible defeat devices. Likewise, such authorities

could take the view that certain functionalities and/or

calibrations are not proper and/or were not properly

disclosed. Mercedes-Benz cannot predict the outcome

of the still ongoing proceedings at this time. Particularly

in light of the fine notice issued by the Stuttgart public

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Risks from legal proceedings in connection with

In a separate lawsuit filed by the State of Arizona in Jan-

uary 2019, the plaintiff claims that, amongst others,

Mercedes-Benz Group AG and MBUSA deliberately

deceived consumers in connection with advertising

Mercedes-Benz diesel vehicles. Consumer class actions

containing similar allegations were filed against

Mercedes-Benz Group AG and further Mercedes-Benz

Group companies in the United Kingdom since May

2020, in the Netherlands in June and December 2020 as

well as against Mercedes-Benz Group AG in Israel in

February 2019. In a separate lawsuit filed by the Envi-

ronmental Protection Commission of Hillsborough

County, Florida in September 2020, the plaintiff claims

that, amongst others, Mercedes-Benz Group AG and

MBUSA violated municipal regulations prohibiting vehi-

cle tampering and other conduct by using alleged

devices claimed to impair the effectiveness of emis-

sions control systems.

diesel exhaust gas emissions – civil court proceed-

ings. As previously reported, a consolidated consumer

class action against Mercedes-Benz Group AG and

MBUSA was pending before the U.S. District Court for

New Jersey. The plaintiffs alleged that Mercedes-Benz

Group AG and MBUSA used devices that impermissibly

impair the effectiveness of emission control systems in

reducing nitrogen-oxide (NO ) emissions and which

X

cause excessive emissions from vehicles with diesel

engines. In addition, plaintiffs alleged that consumers

were deliberately deceived in connection with the

advertising of Mercedes-Benz diesel vehicles.

In the third quarter of 2020, Mercedes-Benz Group AG

and MBUSA reached a settlement with plaintiffs’ coun-

sel of this consumer class action. As part of the settle-

ment, Mercedes-Benz Group AG and MBUSA deny the

material factual allegations and legal claims asserted by

the class action plaintiffs, but have agreed to provide

payments to certain current and former diesel vehicle

owners and lessees. The relevant court granted final

approval of the settlement and issued a final judgment

in the case. The estimated costs of the settlement

amount to approximately USD ꢂ00 million. In addition,

Mercedes-Benz estimates further expenses of a mid-

three-digit-million euro amount to fulfil requirements of

this settlement and the aforementioned settlements

with the US authorities.

In Germany, a large number of customers of diesel vehi-

cles have filed lawsuits for damages or rescission of

sales contracts. They assert that the vehicles contained

illegal defeat devices and/or showed impermissibly high

levels of emissions or fuel consumption. They refer to,

in particular, the German Federal Motor Transport

Authority’s recall orders mentioned above. Given the

current development of case numbers, we expect a

continued high number of lawsuits to be filed in this

respect. In this context, the Federation of German Con-

sumer Organisations (Verbraucherzentrale Bundesver-

band e.V.) filed a model declaratory action (Musterfest-

stellungsklage) against Mercedes-Benz Group AG with

the Stuttgart Higher Regional Court on ꢂ July 2021. Such

action seeks a ruling that certain preconditions of

alleged consumer claims are met. Mercedes-Benz

Group AG will defend itself against the federation’s alle-

gations.

A consumer class action making similar allegations and

seeking similar remedies as to vehicles sold or leased in

Canada was filed against Mercedes-Benz Group AG and

other Group companies in Ontario in April 2016. In the

fourth quarter of 2021, Mercedes-Benz Group AG and

the other Group companies reached a settlement with

plaintiffs’ counsel of the consumer class action. As part

of the settlement, Mercedes-Benz Group AG and the

other Group companies deny the material factual alle-

gations and legal claims asserted by the class action

plaintiffs, but have agreed to make payments to certain

current and former diesel vehicle owners and lessees.

The estimated costs of this settlement amount to

approximately CAD 250 million (approximately equiva-

lent to 1ꢂ5 million €).

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Furthermore, class actions have been filed in the United

governmental or other court proceedings discussed

above, in particular by the fine notice issued by the

Stuttgart public prosecutor’s office, the penal orders

against Mercedes-Benz employees and the civil settle-

ments with the US authorities.

States and Canada alleging anticompetitive behaviour

relating to vehicle technology, costs, suppliers, markets

and other competitive attributes, including diesel emis-

sions control technology.

Mercedes-Benz Group AG and the respective other

Risks from other legal proceedings. Following the set-

affected companies of the Group regard the lawsuits set tlement decision by the European Commission adopted

out above as being without merit and will defend them-

selves against the claims, unless a settlement has

already been reached as described above.

on 19 July 2016 concluding the trucks antitrust proceed-

ings, Mercedes-Benz Group AG and Daimler Truck AG

are facing customers’ claims for damages to a consider-

able degree. Respective legal actions, class actions and

other forms of legal redress have been initiated in vari-

ous states in and outside of Europe and should further

be expected. As set out at the beginning of the section

“Legal and tax risks and opportunities”, Mercedes-Benz

Group AG is entitled to indemnification claims against

Daimler Truck Holding AG and Daimler Truck AG, should

the aforementioned claims materialise. Consequently,

as Mercedes-Benz Group AG is no longer exposed to

financial risks related to the damages claims described

in this paragraph, it will no longer report about these

proceedings.

In addition, investors from Germany and abroad have

filed lawsuits for damages with the Stuttgart Regional

Court alleging the violation of disclosure requirements

(main proceedings) and also raised out-of-court claims

for damages. Mercedes-Benz Group AG regards these

lawsuits and out-of-court claims as being without merit

and will defend itself against them. In January 2021, the

Stuttgart Regional Court issued in the context of the

main proceedings an order for reference to commence

model case proceedings in accordance with the Act on

Model Proceedings in Capital Markets Disputes (Kap-

MuG) before the Stuttgart Higher Regional Court (model

case proceedings). In December 2021, the Stuttgart

In September 2021, individual persons associated with

Higher Regional Court determined a model case plaintiff Deutsche Umwelthilfe e.V. (“DUH”) filed a lawsuit before

and announced the model case proceedings in the Ger-

man register for model case proceedings. Thereafter,

multiple investors used the possibility to register claims

in a considerable amount with the model case proceed-

ings in order to suspend the period of limitation.

Mercedes-Benz Group AG remains of the view to have

duly fulfilled its disclosure obligations under capital

markets law and will defend itself against the investors’

allegations also in these model case proceedings.

the Stuttgart Regional Court against Mercedes-Benz AG.

They claim injunctive relief, demanding that Mercedes-

Benz AG refrain from distributing passenger cars with

combustion engines after November 20ꢃ0 and reduce

its respective sales prior to this point in time. Mercedes-

Benz AG will defend itself against the plaintiffs’ allega-

tions.

As legal proceedings are fraught with a large degree of

uncertainty, it is possible that after their final resolution,

some of the provisions we have recognised for them

could prove to be insufficient. As a result, substantial

additional expenditures may arise. This also applies to

legal proceedings for which the Group has seen no

requirement to recognise a provision.

If court proceedings have an unfavourable outcome for

Mercedes-Benz, this could result in significant damages

and punitive damages payments, remedial works or

other cost-intensive measures. Court proceedings can

in part also have an adverse effect on the reputation of

the Group.

Furthermore, the ability of Mercedes-Benz to defend

itself in the court proceedings could be impaired by the

settlements of the consumer class actions in the US and

in Canada, as well as by unfavourable allegations, find-

ings, results or developments in any of the

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It cannot be ruled out that the regulatory risks and risks

Any changes or interventions by the fiscal authorities

are continuously monitored by the tax department and

measures are taken if required. The monitoring, man-

agement and avoidance of tax risks is supported by a

tax-compliance management system (tax CMS).

from legal proceedings discussed above, individually or

in the aggregate, may materially adversely impact the

profitability, cash flows and financial position of the

Group or any of its segments.

Although the final result of any such litigation may influ-

ence the Group’s earnings and cash flows in any par-

ticular period, Mercedes-Benz believes that any result-

In addition, if future taxable income is not earned or is

too low, there is a risk that the tax benefit from loss car-

ryforwards and tax-deductible temporary differences

ing obligations are unlikely to have a sustained effect on may not be recognised or may no longer be recognised

the Group’s financial position.

in full, which could have a negative impact on net profit.

However, there is an accounting opportunity that tax

benefits currently not recognised in full may be utilised

or recognised in future years and could thus also have a

positive impact on the Group’s net profit.

Further information on legal proceedings is provided in

Note 31 of the Notes to the Consolidated Financial

Statements.

Tax risks and opportunities

Mercedes-Benz Group AG and its subsidiaries operate

in many countries worldwide and are therefore subject

to numerous different statutory provisions and tax

audits. Any changes in legislation and jurisdiction, as

well as different interpretations of the law by the fiscal

authorities – especially in the field of cross-border

transactions, may be subject to considerable uncer-

tainty. It is therefore possible that the provisions recog-

nised will not be sufficient, which could have negative

effects on the Group’s net profit and cash flows.

Overall assessment of the risk

and opportunity situation

The overall view of the Group’s risk and opportunity sit-

uation is the sum of the described individual risks and

opportunities of all risk and opportunity categories.

In addition to the risks described above, unforeseeable

events can have a negative impact on the business

operations and thus on the Mercedes-Benz Group’s

profitability, cash flows, financial position and reputa-

tion.

Positive effects on the Group’s net profit and cash flows

are also possible as a result of retroactive legislation,

future court rulings or changes in the opinions of the tax No risks are recognisableꢋ–ꢋneither on the balance sheet

authorities.

date nor at the time of preparing the consolidated

financial statements – that either alone or in combina-

tion with other risks could endanger the continued

existence of the Group.

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Outlook

The statements made in the Outlook chapter are based

on the business plan of the Mercedes-Benz Group as

The world economy

approved by the Board of Management and the Supervi- We expect the world economy to grow somewhat more

sory Board. That plan is based on the premises we set

regarding the economic situation and the development

of automotive markets. It involves assessments made

by the Company, which are based on analyses by vari-

ous renowned economic research institutes, interna-

tional organisations and industry associations, as well

as on the internal market analyses of our sales compa-

nies. The prospects for our future business develop-

ment as presented here reflect the targets of our divi-

sions as well as the opportunities and risks presented

by the anticipated market conditions and the competi-

tive situation during the planning period. Against this

backdrop, we adjust our expectations for business

developments to reflect updated forecasts for the

development of the various automotive markets.

slowly in 2022 following its strong rebound in the prior

year. Especially during the first few months of the year,

developments will probably continue to be affected by

the measures implemented to inhibit the spread of the

covid-19 pandemic and the ongoing bottlenecks for

upstream products and transport capacities. However,

we assume that global growth will accelerate later in the

year as vaccination rates continue to rise and global

supply chains gradually return to normal. Moreover,

many private households in the industrialised countries

have accumulated unusually high levels of savings dur-

ing the pandemic. The expenditure of at least part of

these savings should give consumption a boost.

In the euro zone, this development should cause private

consumption to become one of the main drivers of the

economy in 2022. The anticipated easing of anti-covid

measures is expected to kick off the recovery of the ser-

vices sector in particular. In addition, the Recovery Plan

for Europe will probably promote investment activity.

Overall, we expect the economy to grow by about 4%

compared to the previous year, and thus once again at a

significantly higher rate than its potential growth.

There is a large degree of uncertainty connected with

the premises regarding the economic situation and the

development of automotive markets. The risks such as

those connected with the ongoing course of the covid-

19 pandemic or arising from geopolitical developments

are elucidated in more detail in the Risk and Opportu-

nity report. Neither the premises of our planning nor the

following forecasts include the effects of the Rus-

sia-Ukraine War. We are following the developments

very closely. The effects on our business development

in the year 2022 and on the related key figures cannot

be quantified at present. We refer to our statements

made in the Risk and Opportunity Report.

The US economy is also expected to benefit this year

from the gradual improvement of the supply situation

and an increasing vaccination rate, and thus to grow by

a good ꢃ.5% during 2022 as a whole.

In China, we expect the slowdown in the course of 2021

to be followed by a slight loosening of economic policy

in 2022 that will give the economy a boost later in the

year. However, at about 5%, growth will probably be sig-

nificantly lower than in the previous year.

In view of these developments, the global economy is

likely to grow by around 4% in 2022. Although this is

somewhat slower than in 2021, it will still expand at a

considerably above-average rate compared to the gen-

eral long-term development.

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Automotive markets

Unit sales

Given these macroeconomic conditions, the global car

market is likely to grow once again in 2022. However, it

currently looks as if the semiconductor-related supply

bottlenecks will continue to affect the market. Although

the situation is likely to improve gradually during the

year, we anticipate only a slight increase in the global

car market in 2022.

There is strong demand for our vehicles at the time of

publishing this Annual Report. Although the outlook for

semiconductor supplies is improving, it is not currently

possible to make an accurate forecast of when the sup-

ply bottlenecks will be over. We will adjust our produc-

tion planning as best we can, prioritising our top models

and electric vehicles in particular. We are working in

close cooperation with our suppliers to improve the

supply situation.

We also expect the European market to expand slightly.

The volume of the US market for cars and light trucks is

expected to remain at about the prior-year level. The

Chinese car market should slightly surpass its previous

year’s volume.

Mercedes-Benz Cars expects unit sales to be slightly

higher in 2022 than in the previous year. This forecast is

based on cautious planning premises. Our top-of-the-

line models of the Mercedes-AMG and Mercedes-May-

bach brands, as well as the G-Class, S-Class, EQS and

GLS, will continue to be important sales drivers with

planned growth of more than 10%. Moreover, our elec-

tric models should contribute to a positive development

of unit sales. During 2022, Mercedes-Benz plans to offer

battery-electric vehicles in all of the vehicle segments

in which the brand is represented.

The availability of semiconductors should improve also

in van markets. We thus expect slight growth in the

combined market segment for mid-size and large vans

in the EUꢃ0 region (European Union, United Kingdom,

Switzerland and Norway). We also expect the small-van

segment to grow slightly in the EUꢃ0 market. A signifi-

cant increase is to be expected in the US market for

large vans. In China, sales of mid-size vans will probably

be slightly above the level of the previous year.

Mercedes-Benz Vans plans to increase its unit sales

slightly in 2022 compared to the previous year. Our

growth will probably focus on the Sprinter and the Citan

successor that was launched in late 2021 and on the

T-Class for private customers, which we plan to launch

in the second quarter of 2022. We expect to see

above-average growth for our electric vans, driven in

particular by the eVito panel van.

As of 1 January 2022, the Mercedes-Benz Cars and

Mercedes-Benz Vans segments will no longer be com-

bined into a reportable segment. As a consequence of

the transformation process, we will report these seg-

ments’ most important performance indicators sepa-

rately. This will increase the transparency of our report-

ing. In this context, the figures for unit sales, investment

in property, plant and equipment, and research and

development expenditure previously reported at the

Group level will no longer be meaningful as Group per-

formance measures and we will therefore no longer pro-

vide forecasts for them.

For 2022, Mercedes-Benz Mobility anticipates a slight

decrease in new business and contract volume. It must

be taken into account that the new business with vehi-

cles from Daimler Trucks & Buses was included in the

division’s new business for the year 2021 until 9 Decem-

ber 2021, when the spin-off and hive-down of the

Daimler commercial vehicle business took effect. On the

other hand, the reported contract volume as of

ꢃ1 December 2021, after completion of the spin-off and

hive-down, had already been adjusted for a large part of

the Daimler commercial vehicle business. The influence

of the parts of the commercial vehicle business still to

be transferred in 2022 should therefore be relatively

minor.

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Revenue and earnings

At Mercedes-Benz Cars, we expect positive effects on

the adjusted return on sales to result from slightly rising

unit sales and a continued advantageous model mix. We

expect the used-car business to continue contributing

We expect the Mercedes-Benz Group to generate reve-

nue in 2022 that is slightly above the level of the previ-

ous year. Our reference here is the previous year’s figure to earnings at a good level, although the business is

from continuing operations. We assume that revenue

will increase slightly at both Mercedes-Benz Cars and

Mercedes-Benz Vans. The Mercedes-Benz Mobility divi-

sion anticipates revenue slightly below the level of the

previous year. This is because its revenue in 2021 still

included the share of the spun-off and hived-down

commercial vehicle business until 9 December 2021.

likely to normalise. We anticipate a further improvement

in pricing, which, however, will not fully offset rising

raw-material prices.

The planned return on sales for Mercedes-Benz Vans is

based on the expected growth in unit sales.

With regard to its adjusted return on equity for 2022,

Mercedes-Benz Mobility expects a normalisation of

credit risk costs to the pre-pandemic level, as well as

lower interest income. In addition, there will be no more

pro-rata EBIT contribution from the spun-off and hived-

On the basis of our expectation of a slight increase in

revenue from continuing operations, we anticipate that

EBIT from continuing operations at the Mercedes-Benz

Group in 2022 will be at the previous year’s level. It

must be taken into account that the previous year’s EBIT down Daimler commercial vehicle business.

from continuing operations includes the contribution

made by Daimler’s commercial vehicle business to EBIT

at Mercedes-Benz Mobility. The forecast for Group EBIT

in 2022 includes a lower earnings contribution from the

equity-method shareholding in Daimler Truck Hold-

ing AG. The expected pro-rata net profit of Daimler

Truck Holding AG will be offset by the depreciation of

assets from the purchase-price allocation in approxi-

mately the same amount.

Free cash flow and cash conversion rate

We expect the free cash flow of the industrial business

in 2022 to be slightly below the prior-year level. One of

the main reasons for this is that tax payments will

increase following the utilisation of tax-loss carryfor-

wards in the previous year. Our reference figure here is

the free cash flow from continuing operations of the

industrial business in 2021.

The expected adjusted returns for the individual divi-

sions in 2022 are:

In 2022, we expect the adjusted cash conversion rate

for the Mercedes-Benz Cars division to be within a

range of 0.8 to 1.0 and for the Mercedes-Benz Vans divi-

sion to be within a range of 0.6 to 0.8.

Mercedes-Benz Cars:

adjusted return on sales of 11.5–1ꢃ%

Mercedes-Benz Vans:

adjusted return on sales of 8–10%

Mercedes-Benz Mobility:

adjusted return on equity of 16–18%

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Combined Management Report with Non-Financial Declaration

Dividend

Investment and research activities

At the Annual General Meeting to take place on 29 April

022, the Board of Management and the Supervisory

Board will propose the payment of a dividend of €5.00

per share for the 2021 financial year (previous year:

Investment in property, plant and equipment

A main feature of investment in property, plant and

equipment at Mercedes-Benz Cars will be the start of

production of battery-electric vehicles on the EVA2

platform and of the new GLC. In addition, we will push

ahead with investment in alternative drive systems.

Investment in property, plant and equipment at

Mercedes-Benz Cars is expected to increase slightly

compared to the previous year. The Mercedes-Benz

Vans division anticipates a significant increase in invest-

ment in property, plant and equipment in 2022; invest-

ment in property, plant and equipment at Mercedes-

Benz Vans was rather low in the previous year. This

increase will be primarily driven by the transition to a

fully electric Mercedes-Benz van fleet in the next gener-

ation, as well as “green” investment within the frame-

2

€1.ꢃ5). This includes a portion of the dividend of €0.ꢂ0

from the Daimler commercial vehicle business. There-

fore, €4.ꢃ0 is to be understood as the future reference

amount for the Mercedes-Benz Group. In total, this rep-

resents a distribution of €5.ꢃ billion (previous year: €1.4

billion).

In line with a sustainable dividend policy, we set the

dividend based on a distribution ratio of 40% of the net

profit attributable to Mercedes-Benz Group sharehold-

ers. We also take into consideration the free cash flow

from the industrial business when setting the dividend.

The deconsolidation income from the spin-off and hive-

down of the Daimler commercial vehicle business is not

taken into account in the dividend proposal for the

financial year 2021.

work of Ambition 20ꢃ9 with the goal of CO neutrality.

2

We also continue to move ahead with digitalisation at

Mercedes-Benz Vans in order to develop additional

profitable business models.

Research and development

At Mercedes-Benz Cars, a large proportion of the

research and development expenditure flows into the

areas of digitalisation, automated driving and electric

drive systems. In addition, we are investing in the

renewal of the product portfolio on the basis of the new

MMA and AMG.EA platforms. Research and develop-

ment expenditure is expected to increase slightly in the

2022 financial year. We are also pushing ahead with the

renewal and expansion of the product portfolio at

Mercedes-Benz Vans. The topics of digitalisation, auto-

mated driving and electric drive systems are at the

focus of our activities. On the basis of the rather low

expenditure in the prior year, Mercedes-Benz Vans

anticipates significantly increased research and devel-

opment expenditure in the 2022 financial year.

15ꢃ

Annual Report 2021 · Mercedes-Benz Group

Combined Management Report with Non-Financial Declaration

Forward-looking statements

CO emissions of the new car fleet in Europe

This document contains forward-looking statements that reflect our current views about

future events. The words “anticipate”, “assume”, “believe”, “estimate”, “expect”, “intend”, “may”,

2

“

can”, “could”, “plan”, “project”, “should” and similar expressions are used to identify for-

ward-looking statements. These statements are subject to many risks and uncertainties,

including an adverse development of global economic conditions, in particular a decline of

demand in our most important markets; a deterioration of our refinancing possibilities on the

credit and financial markets; events of force majeure including natural disasters, pandemics,

acts of terrorism, political unrest, armed conflicts, industrial accidents and their effects on

our sales, purchasing, production or financial services activities; changes in currency

exchange rates, customs and foreign trade provisions; a shift in consumer preferences

towards smaller, lower-margin vehicles; a possible lack of acceptance of our products or ser-

vices which limits our ability to achieve prices and adequately utilise our production capaci-

ties; price increases for fuel or raw materials; disruption of production due to shortages of

materials, labour strikes or supplier insolvencies; a decline in resale prices of used vehicles;

the effective implementation of cost-reduction and efficiency-optimisation measures; the

business outlook for companies in which we hold a significant equity interest; the successful

implementation of strategic cooperations and joint ventures; changes in laws, regulations and

government policies, particularly those relating to vehicle emissions, fuel economy and

safety; the resolution of pending government investigations or of investigations requested by

governments and the conclusion of pending or threatened future legal proceedings; and other

risks and uncertainties, some of which are described under the heading “Risk and Opportu-

nity Report” in this Annual Report. 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.

After we more than fulfilled the CO requirements in

2

2021, we expect that our new car fleet’s average CO₂

emissions in Europe (European Union, Norway and Ice-

land) in 2022 will remain at the level of the previous

year, and that with the expansion of our fleet of electric

vehicles, we will meet the CO requirements in Europe

2

once again this year.

Overall statement on future development

Following the successful realignment of our Company,

we are now concentrating on achieving profitable

growth in the market for luxury cars and premium vans,

as well as for sales financing. High advance expenditure

will still be required for the necessary transformation

References made in this management report

Insofar as the references made in this Management Report relate to parts of the Annual

Report that were not included in the external audit (components outside the company and

consolidated financial statements and the combined Management Report), or to the

Mercedes-Benz Group website or other reports or documents, these were not part of the

external audit.

towards a CO -neutral future. Our goal is to achieve

2

technology leadership in the luxury automobile segment

and for premium vans. We will initially continue to face

strained supply chains and bottlenecks for key

upstream products for vehicle production. The further

development of the covid-19 pandemic and the geopo-

litical developments in particular also harbour substan-

tial uncertainties. In order to be able to successful over-

come these challenges, we will continue to rigorously

implement our measures for boosting efficiency and for

the related reduction in fixed costs. We remain commit-

ted to our challenging margin targets.

Against this backdrop and supported by the Group’s

brand strengths and innovative capabilities, we look for-

ward with confidence to the year 2022.

154

Annual Report 2021 · Mercedes-Benz Group

Bildmotiv

Auswahl tbd.

155

Annual Report 2021 · Mercedes-Benz Group

CORPORATE

GOVERNANCE

156

Annual Report 2021 · Mercedes-Benz Group

CORPORATE GOVERNANCE

1

58 Report of the Audit Committee

ꢉ2 Declaration on Corporate Governance

ꢅꢇꢆ Declaration of compliance on the German

Corporate Governance Code

ꢅꢇ3 Remuneration report, remuneration system

ꢅꢇ3 Essential principles and practices of

corporate governance

ꢅꢇꢇ Composition and working method of

the Board of Management

ꢅꢇꢈ Composition and working method of

the Supervisory Board and its committees

ꢅ7ꢆ German Act on the Equal Participation of

Women and Men in Leadership Positions

ꢅ7ꢁ Overall profiles of requirements for the

composition of the Board of Management and

the Supervisory Board

ꢅꢈꢀ Shareholders and Annual General Meeting

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

Report of the Audit Committee

Dear Shareholders,

Meetings and participants

The Audit Committee met five times in the 2021 financial

year. The Chairman of the Supervisory Board attended

all meetings as a permanent guest. Other permanent

participants, in compliance with the statutory require-

ments, were the Chairman of the Board of Management,

the members of the Board of Management responsible

for Finance and Controlling and for Integrity and Legal

Affairs, and the representatives of the auditor. Timo-

theus Höttges also participated in two meetings on

behalf of the members of the Supervisory Board. The

heads of specialist departments such as Accounting,

As Chairman of the Audit Committee, I am pleased to

report to you on the tasks and activities of this Commit-

tee in the 2021 financial year.

Accountability

On the basis of the statutory provisions, the German

Corporate Governance Code and the rules of procedure

of the Supervisory Board and its committees, the Audit

Committee deals in particular with issues of accounting,

financial reporting and non-financial reporting. In addi-

tion, it is concerned with the audit of the financial state- Internal Audit, Compliance and Legal also provided

ments and it reviews the quality, qualifications and

independence of the auditor. It also discusses the

effectiveness and operation of the risk management

system, the internal control system, the internal audit

system and the compliance management system. After

the election of the auditor by the Annual General Meet-

ing, the Audit Committee engages the auditor to con-

information on individual items on the agenda.

In addition, the Chairman of the Audit Committee held

regular individual discussions, particularly in prepara-

tion for upcoming meetings, for example with the afore-

mentioned members of the Board of Management, the

auditor, the Head of Internal Auditing, the Head of Com-

duct the annual audit and the auditor’s review of interim pliance, the Head of Legal Affairs and, if required, with

financial statements. In addition, the Audit Committee

determines the important audit issues and negotiates

the audit fees with with the auditor. The Audit Commit-

tee also engages the auditor to conduct the voluntary

audit of the non-financial statement as part of the man-

agement report.

the heads of other specialist departments.

Information for the Supervisory Board

The Chairman of the Audit Committee informed the

Supervisory Board in each of its subsequent meetings of

the activities of the Committee as well as the content of

the meetings and discussions.

Equal representation

In the 2021 financial year, as shareholder representa-

tives on the Supervisory Board, Dr Clemens Börsig was

Chairman of and Joe Kaeser sat, until departure from

the Supervisory Board at the end of the Extraordinary

General Meeting on 1 October 2021, on the Audit Com-

mittee. Olaf Koch was elected to the Audit Committee

as the successor to Joe Kaeser. All those mentioned are

independent and have expertise in the field of account-

ing and special knowledge and experience in relation to

the audit of financial statements and in the application

of internal control procedures. In the past financial year,

the employees were represented by Michael Brecht as

Topics in the year ꢂꢀꢂꢁ

In its meeting on 1ꢂ February 2021, the Committee

reviewed and discussed the annual financial statements,

the consolidated financial statements, and the com-

bined management report including the non-financial

statement for Daimler AG and the Group for the 2020

financial year, the declaration on corporate governance

and the proposal for the appropriation of profit, all of

which were issued with an unqualified audit opinion by

the auditor. In particular, the Audit Committee dis-

cussed the key audit matters described in the respec-

tive auditor’s opinion and the relevant audit procedures,

Deputy Chairman of the Committee and by Ergun Lümali including the conclusions drawn. The representatives of

as a member. the auditor reported on the results of the audit and

158

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

were available for additional questions and to provide

responsibility. Furthermore, the Committee was

informed of the status of the audit of the 2019 consoli-

dated financial statements by the German Financial

Reporting Enforcement Panel.

additional information. The audit opinions on the indi-

vidual company and consolidated financial statements,

including the combined management report, as well as

on the internal control system and significant account-

ing matters, were discussed with the auditor. Further-

During 2021, the Audit Committee discussed the interim

more, the Audit Committee also discussed the risk man- financial reports and the results of the audit review with

agement system. After an intensive review and

the Board of Management and the auditor in the quar-

terly meetings prior to their publication. In addition, the

Committee received reports from the Internal Audit,

Compliance and Legal departments. The Board of Man-

agement also regularly reported to the Committee on

the current status of material legal proceedings, includ-

ing antitrust and diesel emissions-related proceedings.

In addition, the Audit Committee received regular

reports on possible violations of rules, which employees

and external parties reported to the BPO (Business

Practices Office) whistle-blowing system.

discussion, the Audit Committee recommended that the

Supervisory Board adopt the prepared financial state-

ments, the combined management report including the

non-financial statement, the declaration on corporate

governance and the proposal of the Board of Manage-

ment for the payment of a dividend of €1.ꢃ5 per divi-

dend-bearing no-par-value share. The Audit Committee

also adopted the report of the Audit Committee on the

2020 financial year.

In addition, in this meeting, the Committee dealt with

the report on the total fees paid to the auditor for audit

and non-audit services in the 2020 financial year and

set the approval framework for the engagement of the

auditor for non-audit services for the period from 1 Jan-

uary 2021 to 15 February 2022. The Committee was

hereby also informed of expected changes due to the

German Financial Market Integrity Strengthening Act

In April 2021, the Committee considered the interim

financial report for the first quarter of 2021. Further-

more, the Audit Committee received reports from the

Internal Audit, Compliance and Legal departments.

Another item on the agenda was the fee agreement with

the auditor for the 2021 financial year. In addition, the

Committee discussed accounting issues relating to the

spin-off and hive-down of the Daimler commercial vehi-

cle business within the framework of Project Focus.

(FISG). The Audit Committee also resolved to recom-

mend to the Supervisory Board, and subsequently to

the Annual General Meeting, that KPMG AG Wirtschafts-

prüfungsgesellschaft is appointed to audit the financial

statements and the consolidated financial statements,

and to review the interim financial reports for the 2021

financial year, as auditor for the audit of interim finan-

cial reports for the 2022 financial year in the period up

In its meeting in June 2021, the Audit Committee dis-

cussed aspects of the risk management system and

particularly addressed its changes and further develop-

ments. Methods, processes and adjustments to the

internal control system were also discussed. Another

to the Annual General Meeting in the 2022 financial year, topic of the meeting was the discussion of the planning

and, as a precautionary measure, as auditor of the final of the audit of the financial statements, including the

balance sheets of the company required pursuant to the main audit areas for the 2021 financial year. In addition,

German Transformation Act (UmwG). The discussion of

the quality of the audit and the results of the independ-

the Committee was informed in detail about Project

Focus. Furthermore, the Audit Committee dealt in detail

ence review, which did not reveal any indications of bias with current accounting topics, which included the new

or threats to independence, were taken into account.

Subject to the election resolution of the Annual General

Meeting, the Committee also discussed the proposal for

the fee agreement to be made with the auditor for the

statutory requirements of the FISG, the new disclosure

requirements for sustainability reporting and the

accounting implications of Project Focus. In this meet-

ing, the Committee also discussed the results of the

internally conducted quality analysis of the audit of the

financial statements. Finally, the Committee dealt with

the Group’s liquidity risk management.

2021 financial year. Finally, the Audit Committee dis-

cussed the 2021 annual audit plan of the Internal Audit

Department, as well as the agenda items for the 2021

Annual General Meeting that fall within the scope of its

159

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

At its meeting in July 2021, the Committee dealt with the ꢂꢀꢂꢁ company and consolidated financial

results of the second quarter of 2021. In the context of

risk reporting, the Audit Committee mainly discussed

legal proceedings, in addition to sales and procurement

risks. Another subject of the meeting was the further

development of the risk management system in relation

to IDW PS ꢃ40 as amended. The Board of Management

then informed the Committee that the audit by the Ger-

man Financial Reporting Enforcement Panel of the 2019

consolidated financial statements had been completed

without any findings. Furthermore, the Committee

received the quarterly reports from the Compliance,

Internal Audit and Legal departments. In this context, it

was informed in detail of implemented measures to

realise the requirements of the German Supply Chain

Sourcing Obligations Act (LkSG), which was passed in

June 2021. Finally, the Audit Committee discussed the

annual report of the Group Data Protection Officer with

the Board of Management.

statements

In its meeting on 2ꢃ February 2022, the Audit Commit-

tee discussed the preliminary key figures of the 2021

company and consolidated financial statements as well

as the proposal of the Board of Management on the

appropriation of profits. After careful review, the Com-

mittee took note and approved the figures presented,

determined that there were no objections to the pro-

posed publication and recommended that the Supervi-

sory Board, which met afterwards, endorse this view.

The preliminary key figures and the proposal for the

appropriation of profits were published at the annual

press conference on 24 February 2022.

In a further meeting on 10 March 2022, the Committee

reviewed and discussed in detail the company financial

statements, consolidated financial statements, and the

combined management report, including the non-finan-

cial statement for Mercedes-Benz Group AG and the

Group for the 2021 financial year, the remuneration

report, the declaration on corporate governance and

the proposal for the appropriation of profits, all of which

were issued with an unqualified audit opinion by the

auditor. The representatives of the auditor reported on

the results of the audit and in particular addressed the

key audit matters and the relevant audit procedures,

including the conclusions drawn, and were available to

answer additional questions and provide information.

The audit opinions on the company and consolidated

financial statements (including the key audit matters in

the audit opinions) and on the internal control system,

as well as significant accounting matters, were dis-

cussed together with the auditor. Furthermore, the Audit

Committee also discussed the risk management system.

After intensive review and discussion, the Audit Com-

mittee recommended that the Supervisory Board adopt

the prepared financial statements, the combined man-

agement report including the non-financial statement,

the remuneration report, the declaration on corporate

governance and the proposal of the Board of Manage-

ment for the payment of a dividend of € 5.00 per divi-

dend-bearing no-par-value share. The Audit Committee

also dealt with the independence of the auditor, includ-

ing the non-audit fee cap for the 2021 financial year. The

Audit Committee also adopted the report of the Audit

Committee on the 2021 financial year.

In October 2021, the Committee dealt with the interim

financial report for the third quarter of 2021. Further-

more, the Committee carried out the annual review of

the approved non-audit services of the auditor and

decided on adjustments to the list of approved non-

audit services. In addition, the Audit Committee started

the tendering process for selecting the auditor of the

year-end financial statements of the Group and the

Company for the 2024 financial year. Finally, the Com-

mittee received the quarterly reports from the Compli-

ance, Internal Audit and Legal departments.

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Corporate Governance

Self-assessment

The Audit Committee also conducted a self-evaluation

of its activities in 2021 based on an extensive company-

specific questionnaire. The results of this self-assess-

ment, which were again very positive, were presented

and discussed at the meeting on 10 March 2022.

Stuttgart, March 2022

The Audit Committee

Dr Clemens Börsig

Chairman

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Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

Declaration on Corporate Governance

pursuant to Sections 2ꢄ9 f, ꢅ1ꢆd of

the German Commercial Code ꢇHGBꢈ

In the Declaration on Corporate Governance, the Board of Management and

the Supervisory Board report on the Corporate Governance of the Company

in the 2021 financial year. The statements are equally applicable to the

Company and the Group, unless indicated otherwise below. The Declaration

on Corporate Governance is also available on the internet at w group.

mercedes-benz.com/dcg. Pursuant to Section ꢃ1ꢂ Subsection 2 Sentence 6

of the German Commercial Code (HGB), the review of the statements by the

auditor in accordance with Section 289f Subsections 2 and 5, and Section

ꢃ15d of the German Commercial Code (HGB) is to be limited to whether the

statements were made.

Declaration by the Board of Management and the

management of a listed company shall not hold more

Supervisory Board of Daimler AG pursuant to Section than a total of five mandates on the supervisory boards

ꢁ

6ꢁ of the German Stock Corporation Act (AktG) on

of listed companies outside the group or comparable

functions, in the course of which the chairmanship of a

supervisory board shall count twice. According to rec-

ommendation C.5, members of the board of manage-

ment of listed companies should not hold more than

two mandates on the supervisory boards of listed com-

panies outside the group or comparable functions and

the German Corporate Governance Code

Daimler AG complies with the recommendations of the

German Corporate Governance Code as amended on 16

December 2019 and published in the official section of

the Federal Gazette on 20 March 2020, with the excep-

tion of recommendations C.4 and C.5 (maximum number should not chair the supervisory board of a listed com-

of mandates of Supervisory Board) and recommenda-

tions G.8 and G.12 (subsequent change of targets and

comparison parameters of variable remuneration com-

pany outside the group.

Whether the total number of mandates held by mem-

ponents of the Board of Management) and has complied bers of the Board of Management and the Supervisory

with the recommendations, with the exceptions men-

tioned, since issuing the last Declaration of Compliance

in July 2021. Daimler AG shall continue to comply with

the recommendations in the future subject to the afore-

mentioned deviations.

Board in non-Group listed companies and comparable

functions is still deemed to be appropriate is to be

assessed more properly on a case-by-case basis rather

than by means of a rigid upper threshold. The individual

workload to be expected from the aggregate of the

mandates held does not necessarily increase in propor-

tion to their number.

Maximum number of Supervisory Board mandates

(Cꢆ. and C.ꢅ)

According to recommendation C.4, a member of the

Supervisory Board who is not a member of the board of

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Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

Targets and comparison parameters of

variable components of the remuneration of

the Board of Management (G.ꢄ and G.ꢁꢂ)

Remuneration report, remuneration system

At group.mercedes-benz.com/remuneration-bom,

w

According to recommendation G.8, a subsequent

change in the target values or comparison parameters

of variable components of the remuneration of the

Board of Management should be excluded. According to

recommendation G.12, in the event of termination of an

agreement of a member of the Board of Management,

the payment of outstanding variable remuneration com-

ponents attributable to the period up to the termination

of the agreement shall be made, inter alia, according to

the originally stipulated targets and comparison param-

eters. On 1 October 2021, the Extraordinary

General Meeting of Daimler AG approved the spin-off of

a majority shareholding in Daimler Truck AG. The spin-

off took effect upon entry in the commercial register of

Daimler AG. This implies that the commercial vehicle

business has been separated from the Daimler Group.

The effects of the spin-off of a significant part of the

Company are not reflected in the target values and

comparison parameters for the annual bonus (short-

and medium-term variable remuneration component)

and the performance phantom share schemes (long-

term variable remuneration component). Therefore, the

target values or the comparison parameters for the

annual bonuses and performance phantom share

schemes not yet due at the time of the spin-off need to

be adjusted. This also applies with regard to a member

of the Board of Management resigning on the occasion

of the spin-off and his or her variable remuneration

components still outstanding at the time of resignation.

the applicable remuneration system for the members of

the Board of Management pursuant to Section 8ꢂa Sub-

sections 1 and 2 Sentence 1 of the German Stock Corpo-

ration Act,(AktG) which was approved by the Annual

General Meeting on 8 July 2020, can be accessed. The

2021 remuneration report and the opinion of the auditor

pursuant to Section 162 of the German Stock Corpora-

tion Act (AktG) are also available there. The resolution

adopted by the Annual General Meeting on ꢃ1 March

2021 pursuant to Section 11ꢃ Subsection ꢃ of the Ger-

man Stock Corporation Act (AktG) on the remuneration

of the members of the Supervisory Board is available at

w

group.mercedes-benz.com/remuneration-sb.

Essential principles and practices

of corporate governance

German Corporate Governance Code

Beyond the statutory requirements of German stock

corporation, participation and capital market legislation,

Mercedes-Benz Group AG has complied and continues

to comply with the recommendations of the German

Corporate Governance Code (“Code”) subject to the

exceptions stated and justified in the Declaration of

Compliance.

Mercedes-Benz Group AG has fully complied and con-

tinues to comply with the suggestions of the Code.

However, due to the covid-19 pandemic, participation in

meetings of the Supervisory Board had to be extended

to telephone and video conferencing (Code suggestion

D.8).

Stuttgart, December 2021

For the

Supervisory Board

Dr Bernd Pischetsrieder

Chairman

Board of Management Principles of our mode of operation

Ola Källenius We conduct our business in accordance with Group-

Chairman wide standards that go beyond the requirements of the

law and the German Corporate Governance Code. Only

This Declaration of Compliance is, in addition to the no

longer current Declarations of Compliance of the past

five years, also available on the website of the Company

those who act in an ethically and legally responsible

manner remain successful in the long term – this is

especially true in times of upheaval and change as we

are currently experiencing. Hence, integrity and compli-

ance are very important to the Mercedes-Benz Group. In

order to achieve long-term and sustainable corporate

success on this foundation, it is our goal to ensure that

at

w

group.mercedes-benz.com/dcg.

16ꢃ

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

our business operations are in harmony with the inter-

comply with the law, follow ethical principles, and in

this sense also have an impact on the supply chain. For

our expectations of our business partners, please also

ests of the environment and society. Because as one of

the world’s leading car manufacturers, we also want to

be at the forefront when it comes to sustainability. We

have defined the most important principles in our Code

of Conduct, which provides orientation for all employ-

ees of Mercedes-Benz Group AG and the Group and

assists them in making the right decisions, even in diffi-

cult business situations.

see

w

group.mercedes-benz.com/company/

compliance/business-partners.html.

Advisory Board for Integrity and Sustainability

Mercedes-Benz Group AG established an Advisory

Board for Integrity and Sustainability, which includes

independent external experts. The Advisory Board

meets three times a year under the direction of the

member of the Board of Management responsible for

Integrity and Legal Affairs.

Our Code of Conduct

Employees from various divisions around the world

were involved in the creation of our new Code of Con-

duct in 2019. Our policy sets out the core corporate

principles for our conduct in day-to-day business, our

dealings with each other within the Company, with busi-

ness partners, and with customers. In addition to

respect for the law and the legal system, these corpo-

rate principles also include, for example, fairness, trans-

parency, practical diversity, and responsibility. In addi-

tion to the corporate principles, our Code of Conduct

contains, inter alia, regulations regarding the respect

and safeguarding of human rights as well as the han-

dling of conflicts of interests, and prohibits corruption

in any form whatsoever. The policy has binding effect

for all companies and employees of the Mercedes-Benz

Group worldwide. It is available on the internet at

One of these annual meetings specifically serves to

exchange information with other members of the Board

of Management and members of the Supervisory Board.

The Advisory Board also holds regular meetings with

members of the Board of Management, executives and

employees to discuss specific topics.

As experts in the fields of environmental and social pol-

icy, transport and mobility development, and human

rights and ethics, the members of the Advisory Board

provide Mercedes-Benz with constructive and critical

support on issues of integrity, sustainability, and corpo-

rate responsibility.

w

group.mercedes-benz.com/company/compliance/

integrity-code.html.

Risk and compliance management within the Group

Mercedes-Benz has effective internal control, risk and

compliance management systems in place that are

commensurate with the size and global presence of the

Company, the scope of its business operations, and its

risk situation, and are geared towards the continuous

and systematic management of entrepreneurial risks

and opportunities.

In addition, we agreed on the “Principles of Social

Responsibility” with the International Works Council.

They are applicable at Mercedes-Benz Group AG as well

as throughout the entire Group. In it, we commit to the

principles of the UN Global Compact, including the

internationally recognised human and labour rights reg-

ulated therein, freedom of association, sustainable envi-

ronmental protection and the prohibition of child and

forced labour. In addition, Mercedes-Benz is committed

to upholding equal opportunities and the principle of

The internal control and risk management system is part

of the overall planning, control, and reporting process.

This is to ensure that the executive management recog-

nises significant risks at an early stage and can initiate

countermeasures in a timely fashion.

“equal pay for work of equal value” for employees.

Expectations of our business partners

We also formulate clear requirements for our business

partners, because conduct with integrity and in compli-

ance with the rules is a prerequisite for any trust-based

cooperative venture. Therefore, when selecting our

direct business partners, we make sure that they

Internal Audit monitors compliance with legal frame-

work conditions and corporate standards with targeted

audits and initiates appropriate measures, where

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necessary. Further information on risk management can

be found in the Risk and Opportunity Report in the 2021

Annual Report.

addition to the half-yearly financial report, Mercedes-

Benz also compiles quarterly financial reports. The con-

solidated financial statements and the financial state-

ments of Mercedes-Benz Group AG are audited by an

auditor, and interim financial reports are subject to

review by an auditor. The consolidated financial state-

ments and the consolidated management reports are

publicly accessible on the website of the Company

within 90 days, the interim financial reports within 45

days after the end of the respective reporting period.

The aim of our Compliance Management System (CMS)

is to promote compliance with legislation and regula-

tions within the Company and among its employees, to

prevent misconduct, and to systematically minimise

compliance risks on the basis of our culture of integrity.

Detailed information on the Mercedes-Benz Compliance

Management System can be found in the Non-financial

Statement chapter of the 2021 Annual Report.

Based on the recommendation of the Audit Committee,

the Supervisory Board submits a proposal to the Annual

General Meeting for the appointment of the auditor of

the financial statements, the auditor of the consolidated

financial statements, and the auditor for the review of

the interim financial reports. At the Annual General

Meeting on ꢃ1 March 2021, KPMG AG Wirtschaftsprü-

fungsgesellschaft, Berlin, was appointed as auditor of

the financial statements, auditor of the consolidated

financial statements, and auditor for the review of

interim financial reports for the 2021 financial year and

of interim financial reports for the 2022 financial year in

the period up to the next Annual General Meeting in the

2022 financial year. KPMG AG Wirtschaftsprüfungs-

gesellschaft has audited the company and consolidated

At least once a year, the Audit Committee of the Super-

visory Board of Mercedes-Benz Group AG discusses the

effectiveness and functionality of the internal control

and risk management system, the internal auditing sys-

tem, and the compliance management system with the

Board of Management. The chairman of the Audit Com-

mittee shall report back to the Supervisory Board about

the work of the committee at the latest at the next

meeting of the Supervisory Board. The Supervisory

Board also deals with the risk management system on

the occasion of the audit of the company and consoli-

dated financial statements. The Chairman of the Super-

visory Board maintains contact with the Board of Man-

agement between meetings of the Supervisory Board, in financial statements of Mercedes-Benz Group AG since

particular with the Chairman of the Board of Manage- the 1998 financial year; Alexander Bock has been the

ment, in order to discuss issues of risk management and responsible auditor since the 2021 financial year. A

compliance, in addition to the strategy and business

development of the Group. In addition, the Board of

selection and proposal process for compliance with the

duty to appoint a different audit firm will take place for

Management regularly informs the Audit Committee and the first time in accordance with the EU Statutory Audit

the Supervisory Board about significant risks to the Regulation, at the latest for the appointment of the

Company and the Group. The Legal Affairs Committee of auditor for the 2024 financial year.

the Supervisory Board supports the Supervisory Board

in the performance of its duties with regard to the com-

plex emissions and antitrust-related proceedings with

which Mercedes-Benz Group AG and its subsidiaries are

confronted.

Before submitting its recommendation for the election

proposal to the Annual General Meeting, the Audit Com-

mittee of the Supervisory Board obtained a declaration

from the proposed auditor as to whether and, if so,

which business, financial or personal relationships exist

between the auditor and its boards and committees and

audit managers on the one hand and the Company and

members of its boards and committees on the other

hand that could give rise to concerns of partiality. The

declaration also covers which other services were pro-

vided to the Group in the previous financial year and to

what extent and which have contractually been stipu-

lated for the following year.

Accounting and auditing

Mercedes-Benz compiles its consolidated financial

statements and interim financial reports in accordance

with the principles of International Financial Reporting

Standards (IFRS) as applicable in the European Union.

The financial statements of Mercedes-Benz Group AG

are compiled in accordance with the accounting provi-

sions of the German Commercial Code (HGB). In

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Annual Report 2021 · Mercedes-Benz Group

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The auditor informs the Chairman of the Audit Commit-

Composition and working method of the Board of

tee without delay of any and all findings and occur-

rences of significance for the duties of the Supervisory

Board that come to the attention of the auditor during

Management

Under the German Stock Corporation Act, (AktG)

the performance of the audit of the financial statements. Mercedes-Benz Group AG has a dual management sys-

Furthermore, the auditor informs the Audit Committee

and annotates in the audit report if, during the perfor-

mance of the audit, the auditor discovers facts that

tem that provides for a strict personnel and functional

separation between the Board of Management as the

management body and the Supervisory Board as the

reveal an inaccuracy in the Declaration of Compliance of supervisory body (two-tier board). The Board of Man-

the Board of Management and the Supervisory Board

with the German Corporate Governance Code.

agement manages the Company, whilst the Supervisory

Board supervises and advises the Board of Manage-

ment.

Board of Management

In accordance with the articles of association of

Mercedes-Benz Group AG, the Board of Management

consists of at least two members. The Supervisory

Board shall determine the exact number. As at ꢃ1

December 2021, the Board of Management consisted of

eight members. In December 2020, the Supervisory

Board set a target for the proportion of women on the

Board of Management in accordance with the German

Act on the Equal Participation of Women and Men in

Leadership Positions and a deadline for achieving this

target. In August 2021, the German Second Leadership

Positions Act (FüPoG II) came into force. According to

the said Act, at least one woman and at least one man

must be a member of the Board of Management in

listed companies with parity participation and more

than three members on the Board of Management. This

minimum participation requirement must be complied

with as from 1 August 2022 when appointing individual

or multiple members of the Board of Management. The

details on the participation of women are presented in a

separate section in this declaration on corporate gov-

ernance. Furthermore, with regard to the composition of

the Board of Management, the Supervisory Board has

adopted a diversity concept embedded in an overall

profile of requirements, including an age limit. Its

details are also summarised in a separate section in this

declaration on corporate governance.

Information in terms of the areas of responsibility as

well as the curricula vitae of the members of the Board

of Management are available on the website of

Mercedes-Benz Group AG at

com/company/corporate-governance/board-of-man-

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group.mercedes-benz.

agement.

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The Board of Management manages Mercedes-Benz

For certain types of transactions defined by the Super-

visory Board, the Board of Management requires the

prior approval of the Supervisory Board. At regular inter-

vals, the Board of Management reports to the Supervi-

sory Board on the strategy of the business units, corpo-

rate planning, profitability, business development, and

Group AG and the Group, in consideration of the inter-

ests of the shareholders, the employees, and the other

stakeholders, with the goal of sustainable added value.

With the approval of the Supervisory Board, it deter-

mines the strategic orientation of the Company, sets the

corporate goals, and resolves on the corporate planning. the situation of the Company, as well as on the internal

control system, the risk management system, and com-

Without prejudice to the overall responsibility of the

Board of Management, the individual members of the

Board of Management shall manage their departments

on their own responsibility within the framework of the

guidelines adopted by the Board of Management as a

whole. Certain matters defined by the Board of Manage-

ment as a whole shall nevertheless be dealt with by the

Board of Management as a whole and shall require its

approval. The work of the Board of Management is coor-

dinated by the chairman of the Board of Management.

pliance issues. The Supervisory Board has defined the

information and reporting duties of the Board of Man-

agement in more detail.

There were no committees of the Board of Management

during the reporting period.

The Board of Management has adopted rules of

procedure, available on the website of the Company at

w

group.mercedes-benz.com/company/corporate-

governance, which, among other things, governs the

The Board of Management compiles the interim financial procedure to be followed when adopting resolutions

reports of the Company, the financial statements of

Mercedes-Benz Group AG, the consolidated annual

accounts, and the combined management report of the

Company and the Group, including the non-financial

statement. Together with the Supervisory Board, it

issues an annual Declaration of Compliance with the

German Corporate Governance Code. The Board of

Management ensures compliance with statutory provi-

sions, official regulations, and internal guidelines within

the Company, and works to ensure that they are also

observed by the Group companies (compliance). It has

established an appropriate compliance management

system geared to the risk situation of the Company, the

basic features of which are presented in the Non-finan-

cial statement chapter of the 2021 Annual Report. This

includes the BPO (Business Practices Office) whis-

and contains provisions designed to avoid conflicts of

interest.

Diversity and equal opportunities

Diversity management has been part of the corporate

strategy since 2005. We rely on the diversity and variety

of our employees because for us they form the basis of

an efficient and successful company. Our operations

aim to bring together the right people to meet our chal-

lenges, to create a working culture that promotes the

performance, motivation and satisfaction of our

employees and managers, and to contribute to the

development of new target groups for our products and

services. Through appropriate framework conditions

and specific measures – from training formats for

employees and managers, workshops, conferences and

tle-blowing system, which gives employees and external guidelines to target group-specific awareness-raising

whistle-blowers worldwide the opportunity to report

violations of the rules.

and communication measures – diversity & inclusion

management thus contributes significantly to the further

development of our corporate culture.

The implementation and monitoring of an effective

internal control and risk management system appropri-

ate to the scope of the business operations and the risk

situation of the Company is also part of the duties of

the Board of Management.

The targeted promotion of women had already been a

central focus of attention in diversity management

before the German Act on the Equal Participation of

Women and Men in Leadership Positions came into

force. In compliance with the statutory requirements,

the Board of Management of Mercedes-Benz Group AG

has set targets for the proportion of women at the two

16ꢂ

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

management levels of the Mercedes-Benz Group AG

composed of at least ꢃ0% women and at least ꢃ0%

men. The specific details are presented in a separate

section of this declaration on corporate governance.

below the Board of Management and a deadline for

attaining these targets. The specific details are pre-

sented in a separate section of this declaration on cor-

porate governance. Independent of the statutory

requirements, the Company had already set itself the

goal in 2006 of increasing the proportion of women in

senior management positions within the Group to 20%

by 2020. We have achieved this goal. From 2021

onwards, we aim to further increase the proportion of

women in senior management positions worldwide by

one percentage point per year. This has also been

achieved for 2021: at ꢃ1 December 2021, the proportion

of women in senior management positions at the

Mercedes-Benz Group worldwide was 22.5% (head-

counts, fully consolidated companies). This data only

covers the Mercedes-Benz Group. They are not compa-

rable with previous years owing to the spin-off and

hive-down of Daimler’s commercial vehicle business as

an independent company in December 2021.

In addition, the Supervisory Board has developed an

overall profile of requirements for its own composition,

which includes a competence profile and a diversity

concept for the Board as a whole, including an age limit.

The specific details of the overall profile of requirements

are also summarised in a separate section of this decla-

ration on corporate governance. The proposals of the

Supervisory Board for the election of shareholder repre-

sentatives by the Annual General Meeting, for which the

Nomination Committee submits recommendations, aim

to fulfil the overall profile of requirements for the

Supervisory Board as a whole.

The members of the Supervisory Board assume respon-

sibility for the training and further education measures

required for their tasks, e.g., on issues of corporate gov-

ernance and on changes in the legal framework and on

new products and forward-looking technologies, and

are supported in this by the Company. In an on-board-

ing programme, new members of the Supervisory Board

have the opportunity to meet the members of the Board

of Management and other executives for a bilateral

exchange on current topics in respect of the relevant

areas of the Board of Management and thus gain an

overview of the relevant topics of the Company.

Composition and working method of the Supervisory

Board and its committees

Supervisory Board

In accordance with the German Co-Determination Act,

(MitbestG) the Supervisory Board of Mercedes-Benz

Group AG consists of 20 members. Half of them are

elected by the shareholders at the Annual General

Meeting and half by the employees of the German com-

panies of the Group. Shareholder representatives and

employee representatives are by law equally bound to

serve the interests of the Company.

The Supervisory Board supervises and advises the

Board of Management in the management of the busi-

ness. At regular intervals, it obtains reports from the

Board of Management on the strategy of the business

units, corporate planning, turnover development, profit-

ability, business development, and the situation of the

Company, as well as on the internal control system, the

risk management system, and compliance issues. The

Supervisory Board has reserved the right of approval for

transactions of fundamental importance. It has also

specified in more detail the information and reporting

duties of the Board of Management vis-à-vis the Super-

visory Board, the Audit Committee and – between

meetings of the Supervisory Board – vis-à-vis the Chair-

man of the Supervisory Board.

Curricula vitae of the individual members of the Super-

visory Board and their other mandates are available on

the internet at

company/corporate-governance/supervisory-board.

w

group.mercedes-benz.com/

The Supervisory Board shall be composed in such man-

ner that its members as a whole are familiar with the

industry in which the Company operates and have the

knowledge, skills, and professional experience neces-

sary for the proper performance of their duties. Accord-

ing to the German Act on the Equal Participation of

Women and Men in Leadership Positions, the Supervi-

sory Board of Mercedes-Benz Group AG must be

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The duties of the Supervisory Board include the

to the Annual General Meeting on the results of its own

review as well as on the nature and scope of the super-

vision of the Board of Management during the past

financial year. The report of the Supervisory Board on

the 2021 financial year is available in the Annual Report

appointment and, if necessary, the dismissal of the

members of the Board of Management. Initial appoint-

ments have generally been made in the past and since

2021 have always been made for a maximum of three

years.

w

and at group.mercedes-benz.com/company/

corporate-governance/supervisory-board.

With regard to the composition of the Board of Manage-

ment, the Supervisory Board observes the statutory

requirements for the equal participation of women and

men. The specific details are presented in a separate

section of this declaration on corporate governance.

Furthermore, with regard to the composition of the

Board of Management, the Supervisory Board has

adopted a diversity concept embedded in an overall

profile of requirements. Its specific details are also

summarised in a separate section of this declaration on

corporate governance.

The Supervisory Board has adopted Rules of Procedure

that, in addition to its duties and responsibilities, spe-

cifically regulate the convening and preparation of its

meetings as well as the procedure for the adoption of

resolutions and contain provisions that are intended to

avoid conflicts of interest. The Rules of Procedure of the

Supervisory Board are available on the internet at

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group.mercedes-benz.com/company/corporate-

governance

For the meetings of the Supervisory Board during the

reporting period, regular Executive Sessions were again

scheduled in order to be able to discuss topics even in

the absence of the Board of Management. Pursuant to

the German Act on Strengthening Financial Market

Integrity (FISG), which entered into force on 1 July 2021,

the Board of Management does not participate in meet-

ings of the Supervisory Board and its committees to the

extent that the auditor is called in as an expert, unless

the Supervisory Board or the committee deems its par-

ticipation necessary.

The Supervisory Board determines the system of remu-

neration for the Board of Management, reviews it regu-

larly, and uses it as the basis for determining the total

individual remuneration of the individual members of

the Board of Management. In 2020 the Annual General

Meeting approved the remuneration system for the

Board of Management with a majority of 95.ꢃꢃ%. The

remuneration system of the Board of Management is

available at

w

group.mercedes-benz.com/remunera-

tion-bom. The 2021 Remuneration Report to be submit-

ted to the 2022 Annual General Meeting for approval

shall also be made available there, together with the

audit opinion pursuant to Section 162 of the German

Stock Corporation Act (AktG).

The members of the Supervisory Board can also partici-

pate in the meetings by telephone or video conference.

In view of the covid-19 pandemic, this option had to be

used again to a greater extent in the 2021 financial year,

although this type of participation is usually the excep-

tion.

The Supervisory Board examines the financial state-

ments, the consolidated financial statements, and the

combined management report of the Company and the

Group, as well as the proposal for the appropriation of

the balance sheet profit. After discussions with the

auditor and in consideration of the audit opinions of the

auditor and the audit results of the Audit Committee,

the Supervisory Board shall declare whether any objec-

tions are to be raised after the final result of its own

review. If this is not the case, the Supervisory Board

approves the financial statements and the combined

management report; the financial statements are

deemed to have been adopted with the approval of the

Supervisory Board. The Supervisory Board shall report

The Supervisory Board regularly assesses how effec-

tively the Supervisory Board and its committees per-

form their duties. The results of the last externally mod-

erated self-assessment in the 2020 financial year, which

the Supervisory Board discussed in its meeting on 1ꢂ

February 2021, once again confirm a professional, very

good cooperation within the Supervisory Board and

with the Board of Management that is characterised by

a high degree of trust. No fundamental need for change

has emerged. Independently of the self-assessment of

the Supervisory Board, the Audit Committee also

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Annual Report 2021 · Mercedes-Benz Group

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carried out a self-evaluation of its activities again in

021 on the basis of an extensive Company-specific

questionnaire. The, again, very positive results of this

self-assessment were presented and discussed at the

Audit Committee meeting on 10 March 2022.

a complete list of the ancillary activities of each mem-

ber of the Board of Management to the Supervisory

Board for approval.

2

In addition, the Presidential Committee advises and

decides on corporate governance issues, on which it

also makes recommendations to the Supervisory Board.

As at ꢃ1 December 2021, in addition to the Mediation

Committee to be established by law, there are four other It supports and advises the Chairman of the Supervisory

committees of the Supervisory Board that perform the

tasks assigned to them in the name and on behalf of the

of the Supervisory Board as a whole, to the extent per-

mitted by law. The relevant committee chairpersons

shall report on the work of the committees to the ple-

nary meeting of the Supervisory Board at the latest at

the next meeting of the Supervisory Board following the

Board and his Deputy and prepares the meetings of the

Supervisory Board within the scope of its responsibili-

ties.

Nomination Committee

The Nomination Committee consists of the Chairman of

the Supervisory Board and two other members elected

committee meeting. The Supervisory Board has adopted on the Supervisory Board by the shareholder represent-

separate rules of procedure for all its committees. They

are available on the internet at

atives by a majority of the votes cast. As from ꢃ1

December 2021, they are Dr Bernd Pischetsrieder

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group.mercedes-benz.com/company/corporate-

governance. Information on the composition of the

committees is available at group.mercedes-benz.

com/company/corporate-governance/supervisory-

board/committees.html.

(Chairman of the Nomination Committee), Sari Baldauf,

and Ben van Beurden. The Nomination Committee is the

only committee of the Supervisory Board composed

exclusively of shareholder representatives. It makes

recommendations to the Supervisory Board for propos-

als to the Annual General Meeting for the election of

shareholder representatives on the Supervisory Board.

In this respect, it takes the statutory requirements for

the equal participation of women and men in manage-

ment positions into account, and strives to fulfil the

overall profile of requirements for the Supervisory

Board as a whole.

w

Presidential Committee

The Presidential Committee consists of the Chairman of

the Supervisory Board, the Deputy Chairman of the

Supervisory Board, and two other members elected by

the Supervisory Board. As from ꢃ1 December 2021, the

Presidential Committee consists of Dr Bernd Pischets-

rieder (Chairman), Michael Brecht (Deputy Chairman),

Ben van Beurden, and Roman Zitzelsberger.

Audit Committee

The Audit Committee consists of four members elected

by the Supervisory Board by a majority of the votes cast.

As from ꢃ1 December 2021, they are the shareholder

representatives Dr Clemens Börsig (Chairman of the

Audit Committee) and Olaf Koch as well as the

employee representatives Michael Brecht (Deputy

Chairman) and Ergun Lümali.

The Presidential Committee makes recommendations to

the Supervisory Board for the appointment of members

to the Board of Management, in consideration of the

overall profile of requirements defined by the Supervi-

sory Board with the diversity concept, including the

requirements for the proportion of women on the Board

of Management. It submits proposals to the Supervisory

Board for the structure of the remuneration system for

the Board of Management and for the appropriate indi-

vidual total remuneration of the individual members of

the Board of Management. The Presidential Committee

is responsible for the contractual matters of the mem-

bers of the Board of Management, it decides on the

granting of approval for ancillary activities of members

of the Board of Management, and once a year it submits

The members of the Audit Committee as a whole are

very familiar with the industry in which the Company

operates. Dr Clemens Börsig has special expertise in the

field of accounting and specific knowledge and experi-

ence with regard to auditing and internal control proce-

dures. This equally applies to Olaf Koch.

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Annual Report 2021 · Mercedes-Benz Group

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Both the Chairman of the Audit Committee, Dr Clemens

regarding the adoption of the annual accounts of

Mercedes-Benz Group AG, the approval of the consoli-

dated annual accounts, and the proposal for the appro-

priation of profits to the Supervisory Board. The Com-

mittee also makes recommendations on the proposal of

the Supervisory Board for the election of the auditor,

assesses the suitability, qualifications, and indepen-

dence of the auditor, and, after appointment by the

Annual General Meeting, engages the auditor for the

audit of the consolidated financial statements and the

financial statements as well as for the review of interim

financial reports. In this respect, it also agrees on the

fee and determines the key areas of the audit. The audi-

tor shall report to the Audit Committee on any and all

accounting matters considered critical and on any

material weaknesses in the internal control and risk

management system relating to the accounting process

identified during the audit.

Börsig, and the other shareholder representative on the

Audit Committee, Olaf Koch, are independent. Further

information on independence is summarised in the sec-

tion on the overall profile of requirements for the com-

position of the Supervisory Board in this declaration on

corporate governance.

The Audit Committee is responsible for monitoring the

accounting and the accounting process, and for the

audit of the financial statements, in particular the selec-

tion and independence of the auditor and the quality of

the audit. At least once a year, it discusses the effec-

tiveness and operation of the internal control and risk

management system, the internal auditing system and

the compliance management system with the Board of

Management. It receives regular reports on the work of

internal auditing and the compliance organisation. In

accordance with the German Act on Strengthening

Financial Market Integrity (FISG), which entered into

force on 1 July 2021, each member of the Audit Commit-

tee may also obtain information directly from the heads

of those corporate departments of the Company that

are responsible within the Company for tasks relating to

the Audit Committee in accordance with its Rules of

Procedure via the Chairman of the Committee. The

Chairman of the Committee shall communicate the

information obtained to all members of the Audit Com-

mittee. If such information is obtained, the Board of

Management shall be informed accordingly without

delay.

Finally, the Audit Committee approves permissible ser-

vices that the auditors or their affiliated companies per-

form for Mercedes-Benz Group AG or its Group compa-

nies and that are not directly related to the audit of the

annual accounts in advance.

Transactions between the Company and related parties

within the meaning of Section 111 b of the German Stock

Corporation Act (AktG) require the prior approval of the

Audit Committee, unless the law or a rule of the Super-

visory Board stipulates that the approval of the plenary

Supervisory Board or another committee is required.

At least quarterly, the Audit Committee receives the

report of the BPO (Business Practices Office) whis-

tle-blowing system on complaints and information on

possible violations of the rules by top executives and

other employees of a defined catalogue of statutory

provisions. It regularly obtains information on the pro-

cessing of the said complaints and information.

Legal Affairs Committee

The Committee is composed of six members elected by

the Supervisory Board by a majority of the votes cast.

As from ꢃ1 December 2021, the members of the Com-

mittee are the shareholder representatives Dr Clemens

Börsig (Chairman), Olaf Koch, and Liz Centoni as well as

the employee representatives Michael Brecht, Michael

Häberle, and Ergun Lümali. The Committee coordinates

the exercising of the rights and obligations of the Super-

visory Board with regard to the ongoing emission and

cartel-related proceedings against the Company and

Group companies. It prepares resolutions of the Super-

visory Board in this regard and makes corresponding

resolution recommendations. As part of the agreement

The Audit Committee discusses the interim financial

reports with the Board of Management prior to their

publication. On the basis of the opinion of the audit, the

Audit Committee reviews the annual company financial

statements, the annual consolidated financial state-

ments, and the management report of the Company and

the Group and discusses them together with the auditor. in principle reached in 2020 with various US authorities

The Audit Committee submits its recommendations to terminate civil and environmental proceedings in

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Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

connection with emission control systems of certain

German Act on the Equal Participation of Women

and Men in Leadership Positions, as amended by the

German Second Act on Leadership Positions

diesel vehicles, the Committee was assigned further

tasks and decision-making competences with regard to

the fulfilment of the obligations assumed in the agree-

ment in principle. The said other tasks include, inter alia, The requirements of the German Equal Participation of

the steering and monitoring of the Post Settlement

Audit Teams that were set up in the context of the

agreement in principle.

Women and Men in Leadership Positions Act are to be

fulfilled at the Company level.

The following information therefore relates to the Board

of Management of Mercedes-Benz Group AG, two man-

agement levels of Mercedes-Benz Group AG below its

Board of Management, and the Supervisory Board of

Mercedes-Benz Group AG.

Mediation Committee

By law, the Mediation Committee consists of the Chair-

man of the Supervisory Board, Dr Bernd Pischetsrieder,

his Deputy, Michael Brecht, and two members elected

by a majority of the votes cast, one by the employee

representatives and one by the shareholder representa-

tives on the Supervisory Board. As from ꢃ1 December

By resolution of ꢃ December 2020, the Supervisory

Board of Mercedes-Benz Group AG set a target for the

proportion of women on the Board of Management of

25% by ꢃ1 December 2025. In August 2021, the German

Second Leadership Positions Act (FüPoG II) came into

force. According to the said Act, at least one woman and

at least one man must be a member of the Board of

Management in listed companies with parity participa-

tion and more than three members on the Board of

Management. This minimum participation requirement

must be complied with as from 1 August 2022 when

appointing individual or multiple members of the Board

of Management. As from ꢃ1 December 2021, Renata

Jungo Brüngger, Sabine Kohleisen, and Britta Seeger are

three women on the Board of Management of

2021, they are Ben van Beurden for the shareholder side

and Roman Zitzelsberger for the employee side. The

Committee was established for the sole purpose of per-

forming the task set out in Section ꢃ1 Subsection ꢃ of

the German Co-Determination Act (MitbestG). As in pre-

vious years, the Mediation Committee had no reason to

take action in the 2021 financial year.

Mercedes-Benz Group AG, which consists of a total of

eight members, resulting in a female share of ꢃꢂ.5%.

With 11.8% of women at the first (2 women of a total of

1ꢂ executives) and 22.5% at the second level of manage-

ment of Mercedes-Benz Group AG (16 women of a total

of ꢂ1 executives) below the Board of Management at the

time of the resolution, the Board of Management of

Mercedes-Benz Group AG, by resolution dated 25

November 2020, set a target for the proportion of

women at 20% for the first and 25% for the second level

below the Board of Management by ꢃ1 December 2025.

As at ꢃ1 December 2021, the first level of management

of Mercedes-Benz Group AG below the Board of Man-

agement consists of 14 executives, one of whom is a

woman, corresponding to a percentage of women of

ꢂ.1 % and at the second level of management of

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Annual Report 2021 · Mercedes-Benz Group

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Mercedes-Benz Group AG below the Board of Manage-

ment, 14 out of a total of 56 executives are women as at

ꢃ1 December 2021, corresponding to 25 %

In the Supervisory Board of Mercedes-Benz Group AG,

as of ꢃ1 December 2021, ꢃ0% of the members on the

shareholder side (Sari Baldauf, Liz Centoni, and Profes-

sor Dr Helene Svahn) are women and ꢂ0% are men. The

situation is the same on the employee side, with ꢃ0%

women (Nadine Boguslawski, Monika Tielsch and Elke

Tönjes-Werner) and ꢂ0% men. At its meeting on 2ꢃ Feb-

The change in the total number of executives at the rel-

evant management level of Mercedes-Benz Group AG

between 25 November 2020 and ꢃ1 December 2021 is

mainly due to the spin-off and hive-down of the Daimler ruary 2022, the Supervisory Board discussed the spe-

commercial vehicles business that has meanwhile been

carried out and the associated transfers to Daimler

Truck AG. Because one woman from management level 1

has also made this change, the proportion of women at

this level of Mercedes-Benz Group AG has fallen rela-

tively sharply as of ꢃ1 December 2021 due to a small

basic population.

cific election proposals to be made at the 2022 Annual

General Meeting and, on the recommendation of the

Nomination Committee, resolved to propose to the

2022 Annual General Meeting that Dame Veronica Anne

(“Polly”) Courtice and Marco Gobbetti be elected to the

Supervisory Board for the first time. In the event of the

election of the proposed candidates, the statutory

quota for women remains fulfilled both on the share-

holder side and for the Supervisory Board as a whole.

Based on the assumption of a total of 14 executives at

management level 1 of Mercedes-Benz Group AG as of

ꢃ1 December 2025, the set target quota of 20% results

in a target of ꢃ women for this level. Based on the

assumption of a total of 56 executives at management

level 2 of Mercedes-Benz Group AG as of ꢃ1 December

In addition to Mercedes-Benz Group AG itself, other

Group companies are subject to co-determination and

have set their own targets for the proportion of women

on their respective Supervisory Boards and Boards of

Management, and at the two levels below the Board of

Management, as well as a deadline for achieving these

targets, and have published them in accordance with

the statutory requirements.

2025, the set target quota of 25% results in a target of

14 women for this level.

The Supervisory Boards of listed companies with equal

representation must be composed of at least ꢃ0%

women and at least ꢃ0% men. The quotas are to be met

by the Supervisory Board as a whole. If the representa-

tives of the shareholders or the representatives of the

employees object to the Chairman of the Supervisory

Board prior to the election then the minimum share for

this election shall be fulfilled separately by the share-

holders and the employees.

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Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

Overall profiles of requirements for the

composition of the Board of Management

and the Supervisory Board

– On ꢃ December 2020, the Supervisory Board set a

target for the proportion of women on the Board of

Management of 25% by ꢃ1 December 2025. In August

2021, the German Second Leadership Positions Act

With regard to the composition of the Board of Manage-

ment and the Supervisory Board, Mercedes-Benz

(FüPoG II) came into force. According to the said Act,

at least one woman and at least one man must be a

member of the Board of Management in listed compa-

nies with parity participation and more than three

members on the Board of Management. This minimum

participation requirement must be complied with as

from 1 August 2022 when appointing individual or

multiple members of the Board of Management. As

from ꢃ1 December 2021, Renata Jungo Brüngger,

Sabine Kohleisen, and Britta Seeger are three women

on the Board of Management of the Company, which

consists of a total of eight members, resulting in a

female share of ꢃꢂ.5%.

Group AG pursues diversity concepts with regard to

aspects such as age, gender, educational and profes-

sional background. The Supervisory Board has combined

these diversity concepts with the requirements of the

German Act on the Equal Participation of Women in

Leadership Positions and other requirements regarding

the competences of the members of the executive bod-

ies in the overall profile of requirements for the Board of

Management and the Supervisory Board described below.

The profiles of requirements are reviewed annually and

also serve as a basis for long-term succession planning.

Board of Management

– For the last possible age-related appointment or reap-

pointment of a member of the Board of Management,

the 62nd year of life generally serves as a guideline,

which should not yet have been reached at the time of

the beginning of a (new) term of office. Upon the

determination of this age limit, the Supervisory Board

deliberately opted for a flexible benchmark in order to

preserve the necessary leeway for appropriate deci-

sions in individual cases. As from ꢃ1 December 2021,

all eight members of the Board of Management fall

below this standard age limit.

The objective of the profile of requirements for the

Board of Management is to ensure that the composition

of the Board of Management is as diverse and comple-

mentary as possible. The Board of Management as a

whole shall possess the knowledge, skills, and experi-

ence necessary for the proper performance of its duties

and at the same time embody the desired management

philosophy based on the various personal backgrounds

and experiences of its members. The decisive factor for

the decision on filling a specific board position is always

the interest of the Company, taking any and all circum-

stances of the individual case into account.

– In addition, attention shall be paid to a sufficient gen-

erational mix among the members of the Board of

Management, whereby, if possible, at least three

members of the Board of Management shall be 5ꢂ

years of age or younger at the beginning of the rele-

vant term of office. This applies to all members of the

Board of Management in office as from ꢃ1 December

2021, with the exception of Sabine Kohleisen, and

Hubertus Troska.

The profile of requirements for the Board of Manage-

ment in the reporting period specifically included the

following aspects:

–

The members of the Board of Management shall have

diverse educational and professional backgrounds,

preferably with at least two members with a technical

background. As from ꢃ1 December 2021, the Board of

Management comprises two graduate engineers,

Markus Schäfer and Dr Jörg Burzer. Ola Källenius has

demonstrated his technical expertise on a sustained

basis since taking over the Group Research &

– In the composition of the Board of Management,

attention shall also be paid to internationality in the

sense of different cultural backgrounds or interna-

tional experience through several years of stays

abroad, whereby, if possible, at least one member of

the Board of Management shall be of international ori-

gin. Notwithstanding the many years of international

experience of the vast majority of the members of the

Mercedes-Benz Cars Developmentm department on

1

January 201ꢂ.

1ꢂ4

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

Board of Management, this goal had already been

They are also both members of the Supervisory Board

of Daimler Truck AG, a wholly owned subsidiary of

Daimler Truck Holding AG. The shareholder represent-

atives on the Supervisory Boards of Daimler Truck

Holding AG and Daimler Truck AG are identical.

Against this background, in the opinion of the Super-

visory Board, membership of the Supervisory Board of

Daimler Truck AG does not impose any additional

requirements comparable to the mandate at Daimler

Truck Holding AG in terms of the profile of require-

ments. A deviation from the recommendation of the

German Corporate Governance Code that members of

boards of management of listed companies should

not hold more than two mandates on supervisory

boards in non-group listed companies or comparable

functions and should not chair a supervisory board is

stated and justified in the 2021 Declaration of Compli-

ance, notwithstanding the assessments of the Super-

visory Board for the purposes of the profile of require-

ments.

achieved by ꢃ1 December 2021, simply because of the

international origins of Ola Källenius and Renata Jungo

Brüngger and the focus of Mr Troska’s activities in

China.

–

As a rule, and subject to disclosure of a deviation in

the annual Declaration of Compliance with the Ger-

man Corporate Governance Code, members of the

Board of Management shall not hold more than two

mandates on Supervisory Boards in non-Group listed

companies or comparable functions and shall not

chair a Supervisory Board of a non-Group listed com-

pany. For the purpose of the profile of requirements,

mandates on Supervisory Boards in joint ventures, the

performance of which is part of the departmental

responsibility of a member of the Board of Manage-

ment, are not considered to be comparable functions.

Of the non-Group memberships of Supervisory Boards

and other Supervisory Bodies held by Hubertus

Troska, only BAIC Motor Corporation Ltd. is listed on

the stock exchange. With the exception of the man-

date at Beijing Foton Daimler Automotive Co., Ltd., his

other mandates outside the Group are mandates

within his departmental responsibility which, in the

opinion of the Supervisory Board, do not pose any

The criteria of the profile of requirements shall be taken

into account when filling positions on the Board of Man-

agement. The Presidential Committee draws up a short-

list of available candidates on the basis of a target pro-

file, taking the specific qualification requirements and

the job profile into account, it conducts interviews with

requirements comparable to mandates on supervisory them, and it then submits a candidate proposal to the

boards of listed companies outside the Group in Supervisory Board together with the reasons for its rec-

terms of the requirements profile. The same applies to ommendation for the decision-making. The decisive fac-

the non-Group mandates of Markus Schäfer with the

exception of the mandate at the listed Farasis Energy

tor is always the interest of the Company, in considera-

tion of any and all circumstances of the individual case.

(Ganzhou) Co.

In the view of the Supervisory Board, fundamental indi-

Of the non-Group memberships of Supervisory Boards vidual suitability criteria for a position on the Board of

and other Supervisory Bodies held by Britta Seeger,

only Deutsche Lufthansa AG is listed on the stock

Management are, in particular, personality, integrity,

convincing leadership qualities, professional qualifica-

exchange. In the opinion of the Supervisory Board, the tions for the department to be taken over, past perfor-

other mandates outside the Group are mandates mance, knowledge of the Company, and the ability to

within the scope of their departmental responsibilities adapt business models and processes in a changing

that, in terms of the profile of requirements, do not

pose any demands comparable to a mandate on the

Supervisory Board of a listed company outside the

Group.

world.

Together with the Board of Management, the Supervi-

sory Board also ensures long-term succession planning

for the Board of Management, with due consideration of

the profile of requirements and the circumstances of

the individual case. The Presidential Committee of the

Supervisory Board regularly discusses talents and

Renata Jungo Brüngger and Harald Wilhelm each hold

two mandates on Supervisory Boards in non-Group

listed companies, including Daimler Truck Holding AG.

1ꢂ5

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

exceptional leaders of the Company. The contract terms

always be based on the interests of the Company, taking

and renewal options of current members of the Board of any and all circumstances of the individual case into

Management are discussed, as well as possible succes-

sors. On the basis of a potential analysis and in consid-

eration of the criteria of the profile of requirements,

executives from the management level below the Board

of Management as well as special high potentials are

assessed and next development steps are discussed

and determined together with the Board of Manage-

ment. The process of succession planning also includes

regular reporting by the Board of Management on the

proportion and development of female managers, espe-

cially at the first and second management levels below

the Board of Management. The Board of Management is

responsible for proposing a sufficient number of suita-

ble candidates to the Supervisory Board. Mercedes-

Benz Group AG aims to predominantly fill positions on

the Board of Management with managers developed

within the Company. Nevertheless, potential external

candidates are also evaluated and included in the

selection process on a case-by-case basis, with the

support of external recruitment consultancy firms.

account.

The profile of requirements for the Supervisory Board in

the reporting period specifically included the following

aspects:

– The members of the Supervisory Board should have

different educational and professional backgrounds.

At least five members should have an education or

profession with a technical background or specific

technological knowledge, for example in the areas of

information technology (including digitalisation),

chemistry, mechanical or electrical engineering. The

composition should also take due account of the fact

that it may be necessary to acquire new competences

in the course of product and market developments.

Notwithstanding the specific knowledge in the afore-

mentioned areas acquired by many members of the

Supervisory Board in other functions, as from

ꢃ1 December 2021 five shareholder representatives

and two employee representatives, namely Dr Bernd

Pischetsrieder, Ben van Beurden, Dr Martin Bruder-

müller, Liz Centoni, Prof. Dr Helene Svahn, Dr Frank

Weber and Roman Zitzelsberger, have a relevant uni-

versity degree. Three other employee representatives

have completed relevant professional training.

Supervisory Board

The Supervisory Board as a whole must be familiar with

the industry in which the Company operates.

The aim of the profile of requirements for the Supervi-

sory Board entirety is also to ensure that the composi-

tion of the Supervisory Board is as diverse and comple-

mentary as possible. The Supervisory Board shall, as a

whole, understand the business model of the Company

and possess the knowledge, skills, and experience nec-

essary to properly provide qualified supervision and

advice to the Board of Management, in particular in the

areas of technology, finance, accounting, auditing, risk

management, internal control procedures, and compli-

ance. Overall, the members of the Supervisory Board

shall complement each other in terms of their expertise

and professional experience in such a way that the

Board as a whole can draw on the broadest possible

pool of experience and diverse specialist knowledge.

Furthermore, the Supervisory Board considers the

diversity of its members in terms of age, gender, inter-

nationality, and other personal characteristics as an

important prerequisite for an effective working relation-

ship. The decision of the Supervisory Board on the elec-

tion proposal to the Annual General Meeting shall

– The gender ratio on the Supervisory Board complies

with the statutory requirement of at least ꢃ0% women

and ꢃ0% men. As from ꢃ1 December 2021, there are

three women on both the side of the shareholders

and the side of the employees. This puts the propor-

tion of women on both sides and on the Supervisory

Board as a whole at ꢃ0%.

– As a rule, only candidates who are not older than

ꢂ2 years at the time of election shall be proposed for

election as members of the Supervisory Board for a

full term of office. Upon the establishment of this age

limit, the Supervisory Board deliberately decided

against a rigid maximum age limit and in favour of a

flexible standard limit that preserves the necessary

leeway for an appropriate assessment of the circum-

stances of the individual case, that defines the group

of potential candidates in a sufficiently broad manner,

and that also allows for re-election. None of the

1ꢂ6

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

members of the Supervisory Board in office on

ꢃ1 December 2021 has exceeded the standard age

limit at the time of their election.

business relationship with the Company or its Board

of Management that could give rise to a material and

not merely temporary conflict of interests. The

assessment of independence is incumbent on the

shareholder representatives on the Supervisory Board

themselves. In this respect, four indicators must be

taken into account that may point to a lack of inde-

pendence (membership of the Board of Management

within the last two years prior to the appointment as a

member of the Supervisory Board; significant busi-

ness relationship with the Company or a company

dependent on it, e.g., as a customer, supplier, lender

or consultant; close family relationship to a member

of the Board of Management; membership of the

Supervisory Board for more than twelve years – all cri-

teria related to both the member of the Supervisory

Board and their close family members). However, the

shareholder side is expressly at liberty to regard the

member of the Supervisory Board in question as inde-

pendent even if one or even several negative indica-

tors are fulfilled – only this assessment should then

be substantiated in the declaration on corporate gov-

ernance.

–

In addition, attention shall be paid to a sufficient gen-

erational mix amongst the members of the Supervi-

sory Board. At least eight members of the Supervisory

Board shall be no more than 62 years of age at the

time of their election or re-election. Except for Dr

Bernd Pischetsrieder and Dr Clemens Börsig, all other

members of the Supervisory Board in office on ꢃ1

December 2021, i.e. 16 members, were aged 62 or

younger at the time of their election for the current

term of office.

–

In order to ensure appropriate internationality, for

example through many years of international experi-

ence, the Supervisory Board has set itself a target of

at least ꢃ0% international shareholder representatives

and a resulting quota of 15% in relation to the plenary

board. Notwithstanding the many years of interna-

tional experience of the vast majority of the share-

holder representatives, this target had already been

exceeded by ꢃ1 December 2021 with 50% on the side

of the shareholders and thus 25% for the Supervisory

Board as a whole, simply because of the international

background of Bader Al Saad, Sari Baldauf, Ben van

Beurden, Liz Centoni, and Professor Dr Helene Svahn.

On the basis of the information known today, the

shareholder representatives are of the opinion that,

even in consideration of the negative indicators pur-

suant to the German Corporate Governance Code that

argue against independence, there are no specific

indications of relevant personal or business relation-

ships or circumstances on the part of any member of

the Supervisory Board on the shareholder side, in par-

ticular with regard to the Company or members of the

Board of Management, that could constitute a mate-

rial and not merely temporary conflict of interests. In

particular, the shareholder representatives Ben van

Beurden, Dr Martin Brudermüller, Liz Centoni, and

Timotheus Höttges do not have any such material

business relationship with Mercedes-Benz Group AG

or any company dependent on Mercedes-Benz

Group AG (e.g., as a supplier, customer, lender or con-

sultant), either directly or in a responsible function of

a company outside the Group. The purchasing volume

of Mercedes-Benz from Shell, BASF, Cisco and

Deutsche Telekom is very low. This also applies to the

fleet business.

–

In order to ensure independent advice to and supervi-

sion of the Board of Management by the Supervisory

Board, more than half of the shareholder representa-

tives on the Supervisory Board shall be independent

of the Company and the Board of Management, sub-

ject to the disclosure of a deviation from the corre-

sponding recommendation of the German Corporate

Governance Code in the Declaration of Compliance

pursuant to Section 161 of the German Stock Corpora-

tion Act (AktG). In this sense, the Supervisory Board

may also include no more than two former members

of the Board of Management of Mercedes-Benz

Group AG and no members who hold corporate or

management posiitons at significant competitors of

the Company.

A shareholder representative on the Supervisory

Board shall be independent of the Company and its

Board of Management if they have no personal or

1ꢂꢂ

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

No member of the Supervisory Board holds board

experience, procedural and corporate knowledge in

these important committees for the benefit of stability

and reliability. In addition, during the reporting period,

Dr Clemens Börsig, with his special experience and

expertise as well as his special knowledge of the

Company, made extremely valuable and significant

contributions to the monitoring of the spin-off of the

commercial vehicles business (Project Focus) by the

Audit Committee and the Supervisory Board.

functions or performs advisory tasks for significant

competitors. Since the retirement of Dr Manfred Bis-

choff at the end of the 2021 Annual General Meeting,

no former member of the Board of Management has

been a member of the Supervisory Board.

The independence of the shareholder representative

Bader Al Saad was not affected by his membership of

the Board of Management and the Executive Commit-

tee of the Board of Management of the Kuwait Invest-

ment Authority, which came to an end during the

reporting period. The Kuwait Investment Authority is

not a controlling shareholder that would require a de

facto majority at the Annual General Meeting. Other

circumstances that argue against the independence of

Bader Al Saad are not apparent.

As a result, according to the assessment of the share-

holders’ side, as from ꢃ1 December 2021, all share-

holder representatives on the Supervisory Board are

to be deemed to be independent, namely Dr Bernd

Pischetsrieder, Bader M. Al Saad, Sari Baldauf, Ben

van Beurden, Dr Clemens Börsig, Dr Martin Bruder-

müller, Liz Centoni, Timotheus Höttges, Olaf Koch and

Professor Dr Helene Svahn.

Neither the patent litigation between Mercedes-Benz

and Nokia, which ended in the reporting period, nor

other mandates held by Dr. Bernd Pischetsrieder

could be seen as constituting a material and not

merely temporary conflict of interest either in respect

of Sari Baldauf or in respect of Dr Bernd Pischets-

rieder.

– As a rule, only candidates who have not already been

members of the Supervisory Board for 12 years at the

time of their (re-)election shall be proposed for elec-

tion to the Supervisory Board for a full term of office.

On ꢃ1 December 2021, this requirement is fulfilled for

all members of the Supervisory Board in office.

The Chairman of the Audit Committee, Dr Clemens

Börsig, and Sari Baldauf have been members of the

Supervisory Board for more than 12 years. Neverthe-

less, the shareholder representatives on the Supervi-

sory Board are convinced that both Sari Baldauf and

Dr Clemens Börsig always maintained the necessary

critical distance from the Board of Management of

Mercedes-Benz Group AG during the reporting period,

as well as the necessary clear, alert and critical view

in their supervision of the Board of Management. Their

conduct in office demonstrates that they fulfil their

offices as members of the Supervisory Board and

Chairman or member of committees of the Supervi-

sory Board in an exemplary manner. In addition, their

many years of experience and expertise are essential

for the Supervisory Board to fulfil its role as a critical

overseer and at the same time an authoritative and

trustworthy advisor to the Board of Management. This

especially applies to Dr Clemens Börsig in his function

as Chairman of the Audit Committee and the Legal

Affairs Committee. Under difficult economic condi-

tions, it is of particular importance to secure

– Each and every candidate and each and every mem-

ber of the Supervisory Board must be able to devote

the expected amount of time and must be willing and

able to show substantive commitment and to take

part in the necessary training and further education

measures. The Supervisory Board shall assure itself

prior to each and every nomination that the candi-

dates in question are able to devote the time required

for the office.

– As a rule and subject to disclosure of a deviation in

the Declaration of Compliance pursuant to Section 161

of the German Stock Corporation Act (AktG), members

of the Board of Management of listed companies,

including the mandate on the Supervisory Board of

Mercedes-Benz Group AG, shall not hold more than

two mandates on Supervisory Boards in listed compa-

nies outside the Group or comparable functions and

shall not chair the Supervisory Boards of listed com-

panies outside the Group; other members of the

Supervisory Board shall, as a rule and subject to dis-

closure of a deviation in the Declaration of

1ꢂ8

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

Compliance, including the mandate on the Supervi-

Dame Polly Courtice, Former Director of the University

of Cambridge Institute for Sustainability Leadership, has

a Master’s degree in history and long-standing experi-

ence in the area of ESG. Marco Gobbetti, Chief Execu-

tive Officer of Salvatore Ferragamo S.p.A., has a Mas-

ter’s degree in International Management and business

experience in the luxury-goods industry. The Company’s

goal of gaining new competencies in the field of product

and market developments is impressively fulfilled by

both candidates. With the election of Dame Polly Cour-

tice, the legal gender quota of ꢃ0% women will remain

fulfilled. Both candidates are under ꢂ2 years of age and

sory Board at Mercedes-Benz Group AG, not hold

more than five mandates on supervisory boards at

listed companies outside the Group or comparable

functions, in the course of which chairmanship of a

Supervisory Board counts twice. For the purposes of

the profile of requirements, dual mandates of mem-

bers of the Supervisory Board of Mercedes-Benz

Group AG in other supervisory bodies within the

Mercedes-Benz Group are not taken into account. The

maximum number of mandates thus determined was

not exceeded by any member of the Supervisory

Board in office on ꢃ1 December 2021. Notwithstanding have extensive international experience. Furthermore,

the above, the deviation from the recommendations

of the German Corporate Governance Code on which

the maximum number of mandates is based was

reported and justified in the Declaration of Compli-

ance of December 2021.

Dame Polly Courtice and Marco Gobbetti are of interna-

tional origin. Thus, if the candidates are elected, the tar-

get of ꢃ0% international shareholder representatives

would be even more surpassed than it is today.

Both proposed candidates are independent of the Com-

pany and its Board of Management, and neither candi-

date stands in a personal or business relationship with

the Company, or with a company dependent on it or its

Board of Management (e.g., as a customer, supplier,

finance provider or advisor) that could justify a not only

temporary conflict of interests. In addition to his func-

tion as Chief Executive Officer of the listed company

Salvatore Ferragamo S.p.A., Marco Gobbetti is a member

of the Board of Directors of the listed company Spring-

place One Ltd. However, apart from the proposed man-

date as member of the Supervisory Board of Mercedes-

Benz Group AG, he does not hold any supervisory board

mandates or other comparable functions in any other

non-Group listed companies. Dame Polly Courtice is a

member of the Board of Directors of the listed company

Jupiter Green Investment Trust PLC and of the non-

listed company Anglian Water Services Ltd., but does

not hold any other comparable mandates apart from the

proposed mandate as member of the Supervisory Board

of Mercedes-Benz Group AG. Both candidates are there-

fore below the upper limit of mandates specified in the

requirements profile. Finally, the Supervisory Board has

also ensured that the candidates are able to spend the

required time on their work in the Supervisory Board at

Mercedes-Benz Group AG and are willing and able to be

engaged in the work and take part in any required train-

ing and further-training activities.

Proposals by the Supervisory Board for the election of

shareholder representatives by the Annual General

Meeting, for which the Nomination Committee makes

recommendations, shall take the aspects outlined

above into account and aim to fill the profile of require-

ments for the Board as a whole. The Nomination Com-

mittee shall draw up a short-list of available candidates

on the basis of a target profile, taking the specific quali-

fication requirements and the aforementioned criteria

into account, hold structured discussions with them

and, whilst doing so, also obtain assurances that the

proposed candidate has sufficient time to be able to

exercise the mandate with due diligence. Subsequently,

the Nomination Committee submits a candidate pro-

posal to the Supervisory Board together with the rea-

sons for its recommendation for decision-making. The

decision of the Supervisory Board on the election pro-

posal to the Annual General Meeting shall always be

based on the interests of the Company, taking any and

all circumstances of the individual case into account.

The Supervisory Board candidates, Dame Veronica Anne

(“Polly”) Courtice and Marco Gobbetti, who are to be

proposed for election for the first time at the 2022

Annual General Meeting, fulfill and enhance the require-

ments profile for the Supervisory Board:

1ꢂ9

Annual Report 2021 · Mercedes-Benz Group

Corporate Governance

The terms of office of the shareholder representatives

Shareholders and Annual General Meeting

on the Supervisory Board of Mercedes-Benz Group AG

end at different times (“staggered board”). Every year,

the Annual General Meeting elects one or more share-

holder representatives. On the one hand, the staggered

The shareholders exercise their membership rights,

in particular their voting rights, at the Annual General

Meeting. Each and every share of Mercedes-Benz

board opens up the possibility of adapting the composi- Group AG entitles to one vote. Documents and informa-

tion of the Supervisory Board more flexibly to a chang-

ing environment. On the other hand, it facilitates the

search for suitable candidates because not all seats on

the shareholder side have to be filled at a single Annual

General Meeting. The Nomination Committee of the

Supervisory Board regularly reviews which mandates

end at which point in time and whether the relevant

mandate holders are eligible and willing to serve a fur-

ther term of office, taking the aforementioned criteria

into account. In the search for new candidates, the

Nomination Committee relies on independent external

recruitment consultancy services.

tion about the Annual General Meeting are available at

group.mercedes-benz.com/am.

w

As part of our comprehensive investor relations and

public relations work, we are in close contact with our

shareholders. We inform shareholders, financial ana-

lysts, shareholder associations, the media, and the

interested public comprehensively and regularly about

the situation of the Company and inform them immedi-

ately of any significant changes in the business. The

Chairman of the Supervisory Board is also prepared,

within reason, to hold discussions with investors on

topics specific to the Supervisory Board.

In addition to other communication channels, we make

intensive use of the website of the Company for our

investor relations work. All key information published in

the 2021 financial year, including annual, quarterly and

half-yearly financial reports, press releases, voting

rights notifications by major shareholders, presenta-

tions and audio recordings from analyst and investor

events and conference calls, as well as the financial cal-

endar, are available at

w

group.mercedes-benz.com/

investors. The dates of important publications, such as

the annual report and interim financial reports, as well

as the dates of the Annual General Meeting, the annual

press conference and analysts’ conferences are

announced well in advance in the financial calendar.

180

Annual Report 2021 · Mercedes-Benz Group

181

Annual Report 2021 · Mercedes-Benz Group

CONSOLIDATED

FINANCIAL STATEMENTS

182

Annual Report 2021 · Mercedes-Benz Group

CONSOLIDATED FINANCIAL STATEMENTS (1/2)

1

85 Consolidated Statement of Income

8ꢉ Consolidated Statement of Comprehensive

Income/Loss

1

87 Consolidated Statement of Financial Position

89 Consolidated Statement of Cash Flows

90 Consolidated Statement of Changes in Equity

92 Notes to the Consolidated Financial Statements

ꢅꢄꢆ ꢅ. Significant accounting policies

ꢆꢅꢆ ꢆ. Accounting estimates and management judgements

ꢆꢅꢉ 3. Spin-off and hive-down of Daimler’s

commercial vehicle business

ꢆꢆꢀ ꢁ. Consolidated Group

ꢆꢆꢆ ꢉ. Revenue

ꢆꢆꢁ ꢇ. Functional costs

ꢆꢆꢉ 7. Other operating income and expense

ꢆꢆꢇ ꢈ. Other financial income/expense, net

ꢆꢆꢇ ꢄ. Interest income and interest expense

ꢆꢆ7 ꢅꢀ. Income taxes

ꢆ3ꢅ ꢅꢅ. Intangible assets

ꢆ33 ꢅꢆ. Property, plant and equipment

ꢆ3ꢇ ꢅ3. Equipment on operating leases

ꢆ37 ꢅꢁ. Equity-method investments

ꢆꢁꢁ ꢅꢉ. Receivables from financial services

ꢆꢁꢈ ꢅꢇ. Marketable debt securities and similar investments

ꢆꢁꢈ ꢅ7. Other financial assets

ꢆꢁꢄ ꢅꢈ. Other assets

ꢆꢉꢀ ꢅꢄ. Inventories

Annual Report 2021 · Mercedes-Benz Group

CONSOLIDATED FINANCIAL STATEMENTS (2/2)

ꢆꢉꢀ ꢆꢀ. Trade receivables

ꢆꢉ3 ꢆꢅ. Equity

ꢆꢉꢉ ꢆꢆ. Share-based payment

ꢆꢉ7 ꢆ3. Pensions and similar obligations

ꢆꢇꢁ ꢆꢁ. Provisions for other risks

ꢆꢇꢇ ꢆꢉ. Financing liabilities

ꢆꢇꢇ ꢆꢇ. Other financial liabilities

ꢆꢇ7 ꢆ7. Deferred income

ꢆꢇꢈ ꢆꢈ. Contract and refund liabilities

ꢆꢇꢄ ꢆꢄ. Other liabilities

ꢆꢇꢄ 3ꢀ. Consolidated Statement of Cash Flows

ꢆ7ꢀ 3ꢅ. Legal proceedings

ꢆ7ꢇ 3ꢆ. Contingent liabilities and other

financial obligations

ꢆ77 33. Financial instruments

ꢆꢄꢅ 3ꢁ. Management of financial risks

3

ꢀ3 3ꢉ. Segment reporting

ꢀꢄ 3ꢇ. Capital management

ꢀꢄ 37. Earnings per share

ꢅꢀ 3ꢈ. Related-party disclosures

ꢅꢆ 3ꢄ. Remuneration of the members of the Board

of Management and the Supervisory Board

ꢅ3 ꢁꢀ. Auditor fees

3

ꢅꢁ ꢁꢅ. Events after the reporting period

ꢅꢉ ꢁꢆ. Additional information

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Consolidated Statement of Income

D.ꢀꢁ

Note

2021

ꢆꢀꢆꢀ

In millions of euros

Revenue

ꢉ

ꢇ

133,893

-103,218

30,ꢉ75

-9,194

-2,808

-5,4ꢉ7

2,888

ꢅꢆꢅ,77ꢈ

-ꢅꢀꢅ,ꢉꢄꢆ

ꢆꢀ,ꢅꢈꢇ

-ꢈ,ꢄꢇꢇ

-ꢆ,ꢉꢀ7

-ꢁ,ꢈ3ꢄ

ꢆ,3ꢈꢁ

-ꢉꢄꢅ

Cost of sales

Gross profit

Selling expenses

ꢇ

General administrative expenses

Research and non-capitalised development costs

Other operating income

ꢇ

7

Other operating expense

7

-1,735

1,352

Profit on equity-method investments, net

Other financial income/expense, net

Earnings before interest and taxes (EBIT)

Interest income

ꢅꢁ

ꢈ

7ꢁ7

317

-3ꢆ3

3ꢉ

ꢄ

1ꢉ,028

212

ꢇ,ꢀꢄꢅ

ꢆꢆꢁ

Interest expense

ꢄ

-429

-3ꢉꢈ

Profit of continuing operations, before taxes

Income taxes

15,811

-4,7ꢉ1

11,050

12,34ꢉ

23,39ꢉ

390

ꢉ,ꢄꢉ7

-ꢅ,ꢄꢆꢇ

ꢁ,ꢀ3ꢅ

-ꢆꢆ

ꢅꢀ

Profit of continuing operations

Profit/loss of discontinued operations, after taxes

Net profit

ꢁ,ꢀꢀꢄ

3ꢈꢆ

thereof profit attributable to non-controlling interests

thereof profit attributable to shareholders of Mercedes-Benz Group AG

thereof continuing operations

thereof discontinued operations

23,00ꢉ

10,ꢉ95

12,311

3,ꢇꢆ7

3,ꢇꢉꢇ

-ꢆꢄ

Earnings per share (in euros)

for profit attributable to shareholders of Mercedes-Benz Group AG

37

Basic

21.50

10.00

11.50

21.50

10.00

11.50

3.3ꢄ

3.ꢁꢆ

thereof continuing operations

thereof discontinued operations

Diluted

-ꢀ.ꢀ3

3.3ꢄ

thereof continuing operations

thereof discontinued operations

3.ꢁꢆ

-ꢀ.ꢀ3

The accompanying notes are an integral part of these Consolidated Financial Statements.

185

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Consolidated Statement of

Comprehensive Income/Loss¹

D.ꢀꢂ

2

021

ꢆꢀꢆꢀ

In millions of euros

Net profit

23,39ꢉ

3,019

ꢁ,ꢀꢀꢄ

Currency translation adjustments

-ꢆ,ꢁ77

Debt instruments

Unrealised gains/losses (pre-tax)

-4

-

ꢉ

-ꢆ

3

Taxes on unrealised gains/losses and on reclassifications

Debt instruments (after tax)

-4

Derivative financial instruments

Unrealised gains/losses (pre-tax)

-1,7ꢉ5

537

ꢅ,ꢆ7ꢅ

-ꢅꢅ3

Reclassifications to profit and loss (pre-tax)

Taxes on unrealised gains/losses and on reclassifications

Derivative financial instruments (after tax)

3ꢉ2

-3ꢁꢉ

-8ꢉꢉ

2,149

ꢈꢅ3

Items that may be reclassified to profit/loss

Equity instruments

-ꢅ,ꢇꢇꢅ

Unrealised gains/losses (pre-tax)

ꢉ4

-18

ꢆꢅ3

-ꢁꢀ

Taxes on unrealised gains/losses and on reclassifications

Equity instruments (after tax)

4ꢉ

ꢅ73

Actuarial gains/losses from pensions and similar obligations (pre-tax)

Taxes on actuarial gains/losses from pensions and similar obligations

Actuarial gains/losses from pensions and similar obligations (after tax)

Items that will not be reclassified to profit/loss

Other comprehensive income/loss, net of taxes

thereof income/loss attributable to non-controlling interests, after taxes

thereof income/loss attributable to shareholders of Mercedes-Benz Group AG, after taxes

Total comprehensive income

4,702

-1,122

3,580

3,ꢉ2ꢉ

5,775

75

-ꢆ,7ꢀꢇ

ꢈꢁꢅ

-ꢅ,ꢈꢇꢉ

-ꢅ,ꢇꢄꢆ

-3,3ꢉ3

-ꢉꢅ

5,700

29,171

4ꢉ5

-3,3ꢀꢆ

ꢇꢉꢇ

thereof income/loss attributable to non-controlling interests

thereof income/loss attributable to shareholders of Mercedes-Benz Group AG

33ꢅ

28,70ꢉ

3ꢆꢉ

1

See Note 21 for other information on the Consolidated Statement of Comprehensive Income/Loss.

The accompanying notes are an integral part of these Consolidated Financial Statements.

186

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Consolidated Statement of

Financial Position

D.ꢀꢃ

At 3ꢅ December

Note

2021

ꢆꢀꢆꢀ

In millions of euros

Assets

Intangible assets

ꢅꢅ

ꢅꢆ

ꢅ3

ꢅꢁ

ꢅꢉ

ꢅꢇ

ꢅ7

ꢅꢀ

ꢅꢈ

15,005

27,859

44,471

13,588

4ꢉ,955

873

ꢅꢇ,3ꢄꢄ

3ꢉ,ꢆꢁꢇ

ꢁ7,ꢉꢉꢆ

ꢉ,ꢅꢈꢄ

Property, plant and equipment

Equipment on operating leases

Equity-method investments

Receivables from financial services

Marketable debt securities and similar investments

Other financial assets

ꢉ3,7ꢀꢄ

ꢅ,ꢀꢁꢅ

3,181

ꢁ,ꢅꢇ7

Deferred tax assets

3,434

ꢇ,ꢆꢉꢄ

Other assets

1,53ꢉ

ꢄꢅꢅ

Total non-current assets

Inventories

15ꢉ,902

21,4ꢉꢉ

7,ꢉ73

ꢅ7ꢀ,ꢁ73

ꢆꢇ,ꢁꢁꢁ

ꢅꢀ,ꢇꢁꢄ

ꢁꢆ,ꢁ7ꢇ

ꢆ3,ꢀꢁꢈ

ꢉ,3ꢉꢇ

ꢅꢄ

ꢆꢀ

ꢅꢉ

Trade receivables

Receivables from financial services

Cash and cash equivalents

Marketable debt securities and similar investments

Other financial assets

33,ꢉ70

23,120

ꢉ,70ꢉ

ꢅꢇ

ꢅ7

ꢅꢈ

3

3,079

ꢆ,7ꢉ7

Other assets

4,073

ꢁ,ꢉ3ꢁ

Assets held for sale

3,142

-

Total current assets

102,929

259,831

ꢅꢅꢉ,ꢆꢇꢁ

ꢆꢈꢉ,737

Total assets

The accompanying notes are an integral part of these Consolidated Financial Statements.

18ꢂ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢀꢃ

At 3ꢅ December

Note

2021

ꢆꢀꢆꢀ

In millions of euros

Equity and liabilities

Share capital

3,070

11,723

5ꢉ,190

9ꢉ8

3,ꢀ7ꢀ

ꢅꢅ,ꢉꢉꢅ

ꢁ7,ꢅꢅꢅ

-ꢅ,ꢀꢁꢅ

ꢇꢀ,ꢇꢄꢅ

ꢅ,ꢉꢉ7

Capital reserves

Retained earnings

Other reserves

Equity attributable to shareholders of Mercedes-Benz Group AG

Non-controlling interests

Total equity

71,951

1,21ꢉ

73,1ꢉ7

5,359

7,909

73,543

1,808

4,488

1,175

3,980

727

ꢆꢅ

ꢆ3

ꢆꢁ

ꢆꢉ

ꢆꢇ

ꢅꢀ

ꢆ7

ꢆꢈ

ꢆꢄ

ꢇꢆ,ꢆꢁꢈ

ꢅꢆ,ꢀ7ꢀ

ꢅꢅ,ꢅꢅꢇ

ꢈꢇ,ꢉ3ꢄ

ꢅ,ꢄ7ꢅ

Provisions for pensions and similar obligations

Provisions for other risks

Financing liabilities

Other financial liabilities

Deferred tax liabilities

3,ꢇꢁꢄ

Deferred income

ꢅ,ꢉꢇ7

Contract and refund liabilities

Other liabilities

ꢉ,7ꢈ7

ꢄꢈꢅ

Total non-current liabilities

Trade payables

98,989

10,ꢉ55

8,053

52,300

5,997

1,48ꢉ

5,929

3,08ꢉ

1ꢉ9

ꢅꢆ3,ꢇꢈꢀ

ꢅꢆ,37ꢈ

ꢄ,33ꢁ

Provisions for other risks

Financing liabilities

ꢆꢁ

ꢆꢉ

ꢆꢇ

ꢆ7

ꢆꢈ

ꢆꢄ

3

ꢉꢄ,3ꢀ3

ꢇ,ꢇꢆ7

Other financial liabilities

Deferred income

ꢅ,ꢉꢄꢁ

Contract and refund liabilities

Other liabilities

7,ꢅꢇꢄ

3,ꢁꢀꢁ

Liabilities held for sale

-

Total current liabilities

Total equity and liabilities

87,ꢉ75

259,831

ꢄꢄ,ꢈꢀꢄ

ꢆꢈꢉ,737

The accompanying notes are an integral part of these Consolidated Financial Statements.

188

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Consolidated Statement of

1

Cash Flows

D.ꢀꢆ

2

021

ꢆꢀꢆꢀ

In millions of euros

Profit before income taxes of continuing and discontinued operations

Depreciation and amortisation/impairments

Other non-cash expense and income

28,775

ꢉ,980

ꢇ,33ꢄ

ꢈ,ꢄꢉ7

-ꢈ3ꢇ

ꢅ3ꢅ

-11,503

-ꢉ95

Gains (-)/losses (+) on disposals of assets

Change in operating assets and liabilities

Inventories

-2,5ꢉ1

120

ꢆ,ꢀ3ꢄ

ꢅ,33ꢄ

-ꢆꢄꢄ

ꢆ,3ꢄ7

ꢅ,ꢈꢆꢆ

ꢇꢉ3

Trade receivables

Trade payables

1,574

3,879

1,428

-1,2ꢉ1

1,ꢉ25

-3,812

24,549

-4,579

-2,741

82ꢉ

Receivables from financial services

Vehicles on operating leases

Other operating assets and liabilities

Dividends received from equity-method investments

Income taxes paid

ꢅ,7ꢈ3

-ꢅ,ꢄꢄ3

ꢆꢆ,33ꢆ

-ꢉ,7ꢁꢅ

-ꢆ,ꢈꢅꢄ

3ꢇꢉ

Cash provided by operating activities

Additions to property, plant and equipment

Additions to intangible assets

Proceeds from disposals of property, plant and equipment and intangible assets

Investments in shareholdings

-573

-ꢇꢇꢅ

-

Proceeds from the disposal of shares in Daimler Truck Fuel Cell GmbH & Co. KG

Proceeds from disposals of shareholdings

ꢉ34

159

ꢆꢉꢄ

Acquisition of marketable debt securities and similar investments

Proceeds from sales of marketable debt securities and similar investments

Repayment of financing of Daimler’s commercial vehicles business

Cash and cash equivalents disposed of from the deconsolidation of Daimler’s commercial vehicles business

Other

-5,ꢉ94

4,385

ꢉ,853

-5,489

-7

-3,7ꢄꢆ

ꢉ,ꢄꢁꢅ

-

ꢆ7

Cash used for investing activities

-ꢉ,22ꢉ

1,4ꢉ3

42,19ꢉ

-ꢉ0,859

-1,444

-3ꢉꢉ

-ꢇ,ꢁꢆꢅ

-3,ꢆꢇ3

ꢉ3,7ꢅ3

-ꢉꢄ,ꢄꢉ3

-ꢄꢇ3

-ꢆꢈꢆ

3ꢅ

Change in short-term financing liabilities

Additions to long-term financing liabilities

Repayment of long-term financing liabilities

Dividend paid to shareholders of Mercedes-Benz Group AG

Dividends paid to non-controlling interests

Proceeds from the issue of share capital

3ꢉ

Acquisition of treasury shares

-48

-3ꢀ

Acquisition of non-controlling interests in subsidiaries

Cash used for financing activities

-37

-

-19,059

870

-ꢅꢀ,7ꢁ7

-ꢄꢄꢄ

ꢁ,ꢅꢇꢉ

ꢅꢈ,ꢈꢈ3

ꢆ3,ꢀꢁꢈ

-

Effect of foreign exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Less cash and cash equivalents classified as assets held for sale at end of period

Cash and cash equivalents at end of period (Consolidated statement of financial position)

134

23,048

23,182

ꢉ2

23,120

ꢆ3,ꢀꢁꢈ

1

See Note 30 for other information on Consolidated Statement of Cash Flows.

The accompanying notes are an integral part of these Consolidated Financial Statements.

189

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Consolidated Statement of

Changes in Equity¹

D.ꢀꢅ

Other reserves

items that may be

reclassifiedin profit/loss

Equity

instruments/

Share

capital

Capital

reserves

Retained

earnings

Currency

translation

debt

instruments

In millions of euros

Balance at ꢁ January ꢂꢀꢂꢀ

3,ꢀ7ꢀ

ꢅꢅ,ꢉꢉꢆ

ꢁꢇ,3ꢆꢄ

3,ꢇꢆ7

-ꢆ,7ꢀ7

ꢈꢁꢅ

ꢅ,7ꢇꢅ

-ꢄꢇ3

-ꢈ3

ꢄꢀꢄ

3ꢀ

-

Net profit

-

Other comprehensive income/loss before taxes

Deferred taxes on other comprehensive income

Total comprehensive income/loss

Dividends

-

-ꢆ,ꢁꢆꢉ

ꢆꢅꢈ

-ꢁꢆ

ꢅ7ꢇ

-

-ꢆ,ꢁꢆꢉ

-

Changes in the consolidated group

Capital increase/Issue of new shares

Acquisition of treasury shares

Issue and disposal of treasury shares

Changes in ownership interests in subsidiaries

Other

-

-ꢅ

-

ꢇ7

-

Balance at ꢃꢁ December ꢂꢀꢂꢀ

3,ꢀ7ꢀ

ꢅꢅ,ꢉꢉꢅ

ꢁ7,ꢅꢅꢅ

-ꢅ,ꢉꢅꢇ

ꢆꢀꢇ

Balance at ꢁ January ꢂꢀꢂꢁ

Net profit

3,070

11,551

47,111

23,00ꢉ

4,702

-1,51ꢉ

-

20ꢉ

-

Other comprehensive income/loss before taxes

Deferred taxes on other comprehensive income

Total comprehensive income/loss

Dividends

2,943

-

ꢉ1

-18

43

-

-1,122

2ꢉ,58ꢉ

-1,444

2,943

-

Changes from spin-off of Daimler’s commercial vehicle

business

-

-1ꢉ,253

-

Acquisition of treasury shares

Issue and disposal of treasury shares

Changes in ownership interests in subsidiaries

Other

-

172

-

190

5ꢉ,190

-

-47

202

Balance at ꢃꢁ December ꢂꢀꢂꢁ

3,070

11,723

1,427

1

2

See Note 21 for other information on changes in equity.

Retained earnings also include items that will not be reclassified to the Consolidated Statement of Income.

The accompanying notes are an integral part of these Consolidated Financial Statements.

190

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Equity

attributable to

Derivative

financial

instruments

shareholders of

Treasury Mercedes-Benz

Non-

controlling

interests

Total

equity

share

Group AG

In millions of euros

-

ꢉꢁꢇ

-

ꢇꢅ,3ꢁꢁ

3,ꢇꢆ7

-3,7ꢉꢇ

ꢁꢉꢁ

3ꢆꢉ

-ꢄꢇ3

-ꢈ3

ꢅ,ꢁꢄ7

3ꢈꢆ

-ꢉꢅ

-

ꢇꢆ,ꢈꢁꢅ

ꢁ,ꢀꢀꢄ

-3,ꢈꢀ7

ꢁꢉꢁ

Balance at ꢁ January ꢂꢀꢂꢀ

-

Net profit

ꢅ,ꢅꢉꢈ

-

Other comprehensive income/loss before taxes

Deferred taxes on other comprehensive income

Total comprehensive income/loss

Dividends

-

3ꢁꢉ

ꢈꢅ3

-

33ꢅ

-ꢆꢈꢆ

ꢆ

ꢇꢉꢇ

-

-ꢅ,ꢆꢁꢉ

-ꢈꢅ

-

Changes in the consolidated group

Capital increase/Issue of new shares

Acquisition of treasury shares

Issue and disposal of treasury shares

Changes in ownership interests in subsidiaries

Other

-

ꢅ3

-

-3ꢀ

3ꢀ

-

-3ꢀ

-

-3ꢀ

-

3ꢀ

-

3ꢀ

-

-ꢅ

-

-ꢅ

ꢆ

-

ꢇꢄ

-ꢁ

ꢇꢉ

ꢆꢇꢄ

-

ꢇꢀ,ꢇꢄꢅ

ꢅ,ꢉꢉ7

ꢇꢆ,ꢆꢁꢈ

Balance at ꢃꢁ December ꢂꢀꢂꢀ

2

ꢉ9

-

ꢉ0,ꢉ91

23,00ꢉ

ꢉ,478

1,557

390

75

ꢉ2,248

23,39ꢉ

ꢉ,553

Balance at ꢁ January ꢂꢀꢂꢁ

Net profit

-

1,228

Other comprehensive income/loss before taxes

Deferred taxes on other comprehensive income

Total comprehensive income/loss

Dividends

3

ꢉ2

-778

-

-778

-8ꢉꢉ

28,70ꢉ

-1,444

4ꢉ5

-3ꢉꢉ

29,171

-1,810

-

Changes from spin-off of Daimler’s commercial vehicle

business

-

-48

48

-

-1ꢉ,253

-48

-502

-

-1ꢉ,755

-48

Acquisition of treasury shares

Issue and disposal of treasury shares

Changes in ownership interests in subsidiaries

Other

48

-

48

172

13

185

-

ꢉ4

-

79

49

128

-ꢉꢉ1

-

71,951

1,21ꢉ

73,1ꢉ7

Balance at ꢃꢁ December ꢂꢀꢂꢁ

The accompanying notes are an integral part of these Consolidated Financial Statements.

191

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Notes to the Consolidated

Financial Statements

ꢁ

. Significant accounting policies

The Board of Management of Mercedes-Benz Group AG

authorised the Consolidated Financial Statements for

publication on 10 March 2022.

General information

The Mercedes-Benz Group is a vehicle manufacturer

with a worldwide product range of premium cars. Its

product portfolio is rounded off by a range of financial

services and mobility services. Mercedes-Benz

Group AG is the parent company of the Mercedes-Benz

Group.

Basis of preparation

Applied IFRS

The accounting policies applied in the Consolidated

Financial Statements comply with the IFRS required to

be applied in the EU as of ꢃ1 December 2021.

On 1 October 2021, the Extraordinary General Meeting

approved the renaming of Daimler AG as Mercedes-Benz IFRS issued, EU endorsed and initially adopted

Group AG effective 29 January 2022. The commercial

register entry took place on 1 February 2022. For this

reason, in addition to the name Mercedes-Benz

Group AG, the name Daimler AG is also used here,

depending on the respective facts and time. On the

same date, Daimler Mobility AG was renamed as

Mercedes-Benz Mobility AG.

in the reporting period

In August 2020 the IASB published Interest Rate

Benchmark Reform – Phase ꢂ: Amendments to IFRS ꢈ,

IAS ꢃꢈ, IFRS ꢇ, IFRS ꢆ and IFRS ꢁ6. The amendments

address issues related to the application of the reform

and its effects on financial reporting for lease contracts,

hedges and other financial instruments caused by

replacing existing interest-rate benchmarks with alter-

native benchmark rates. The Mercedes-Benz Group is

applying the changes for the first time for the financial

year beginning on 1 January 2021. There has been no

material impact on the earnings, cash flows or financial

position.

The Consolidated Financial Statements of Mercedes-

Benz Group AG and its subsidiaries (“the Mercedes-

Benz Group” or “the Group”) have been prepared in

accordance with Section ꢃ15e of the German Commer-

cial Code (HGB) and comply with the International

Financial Reporting Standards (IFRS) as adopted by the

European Union (EU).

Mercedes-Benz Group AG is a stock corporation organ-

ised under the laws of the Federal Republic of Germany.

The Company is entered in the Commercial Register of

the Stuttgart District Court under No. HRB 19ꢃ60 and its

registered office is located at Mercedesstraße 120,

ꢂ0ꢃꢂ2 Stuttgart, Germany.

The Consolidated Financial Statements of Mercedes-

Benz Group AG are presented in euros (€). Unless other-

wise stated, all amounts are stated in millions of euros.

All figures shown are rounded in accordance with stand-

ard business rounding principles.

192

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

In March 2021, the International Accounting Standards

The Consolidated Statement of Income is presented

using the cost-of-sales method.

Board published an amendment to IFRS ꢁ6 (“Covid-ꢁꢈ-

Related Rent Concessions beyond ꢃꢀ June ꢂꢀꢂꢁ”), in

which they extend the application period of the

accounting policy choice to lessees applying the practi-

cal relief for rent concessions because of the covid-19

pandemic. The Mercedes-Benz Group does not apply

this practical expedient for lessees.

Continuing operations are presented in the

Consolidated Statement of Income; the profit or loss

after tax of discontinued operations is shown in a sepa-

rate line. The previous year’s figures have been adjusted

accordingly.

IFRS issued, EU endorsed and not yet adopted

in the reporting period

In May 201ꢂ, the IASB issued IFRS ꢁꢇ Insurance

Contracts. IFRS 1ꢂ will replace the currently applicable

IFRS 4. It establishes more transparency and compara-

Further information on the spin-off and hive-down of

Daimler’s commercial vehicle business is provided in

Note 3.

Measurement

bility with regard to the recognition, measurement, pres- The Consolidated Financial Statements have been pre-

entation and disclosure of insurance contracts with the

insurer. The application of IFRS 1ꢂ is mandatory for

reporting periods beginning on or after 1 January 202ꢃ.

Early adoption is permitted. The Mercedes-Benz Group

currently does not expect any material impacts on the

Group’s profitability, liquidity and capital resources or

financial position due to the application of IFRS 1ꢂ. Early

adoption is not currently planned.

pared on the historical-cost basis with the exception of

certain items such as financial assets measured at fair

value through profit or loss, derivative financial instru-

ments, hedged items, and pensions and similar obliga-

tions. The measurement models applied to those excep-

tions are described below.

Principles of consolidation

The Consolidated Financial Statements include the

financial statements of Mercedes-Benz Group AG and

the financial statements of all subsidiaries, including

structured entities, which are directly or indirectly con-

trolled by Mercedes-Benz Group AG. Control exists if

the parent company has the power of decision over a

subsidiary based on voting rights or other rights, if it

participates in positive and negative variable returns

from a subsidiary, and if it can affect these returns by its

power of decision.

Presentation

Presentation in the Consolidated Statement of Financial

Position differentiates between current and non-current

assets and liabilities. Assets and liabilities are generally

classified as current if they are expected to be realised

or settled within one year. Deferred tax assets and lia-

bilities as well as assets and provisions for pensions

and similar obligations are generally presented as

non-current items.

Assets and liabilities presented until the spin-off and

hive-down of Daimler’s commercial vehicle business as

assets and liabilities held for distribution have been

eliminated from the Consolidated Statement of Finan-

cial Position as part of the deconsolidation. Other

assets and liabilities of Daimler’s commercial vehicle

business that will be transferred in 2022 are presented

as assets and liabilities held for sale as of ꢃ1 December

Structured entities which are controlled also have to be

consolidated. Accordingly, the assets and liabilities are

recognised in the Consolidated Statement of Financial

Position. Structured entities are entities which have

been designed so that voting or similar rights are not

relevant in deciding who controls the entity. This is the

case for example if voting rights relate to administrative

tasks only and the relevant activities are directed by

means of contractual arrangements.

2021. The amounts in the statement of financial position

of the previous year are shown in line with the previous

method of presentation, in accordance with IFRS.

19ꢃ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

The financial statements of consolidated subsidiaries

For entities over which the Mercedes-Benz Group has

joint control together with a partner (joint arrange-

ments), it is necessary to differentiate whether a joint

operation or a joint venture exists. In a joint venture, the

parties that have joint control of the arrangement have

rights to the net assets of the arrangement. For joint

ventures, the equity method has to be applied. A joint

operation exists when the jointly controlling parties

have direct rights to the assets and obligations for the

liabilities. In this case, the prorated assets and liabilities

and the prorated income and expenses are generally to

be recognised (proportionate consolidation). Joint oper-

ations that have no significant impact on the Consoli-

dated Financial Statements are generally accounted for

using the equity method.

which are included in the Consolidated Financial State-

ments are generally prepared as of the reporting date of

the Consolidated Financial Statements. The financial

statements of Mercedes-Benz Group AG and its subsidi-

aries included in the Consolidated Financial Statements

are prepared using uniform recognition and measure-

ment principles. All intra-Group assets and liabilities,

equity, income and expenses as well as cash flows from

transactions between consolidated entities are entirely

eliminated in the course of the consolidation process.

Business combinations are accounted for using the pur-

chase method.

Changes in equity interests in subsidiaries that reduce

or increase the Mercedes-Benz Group’s percentage

ownership without change of control are accounted for

as equity transactions between owners. If the Group

If the financial statements of associated companies,

joint ventures or joint operations should not be availa-

ble in good time, the Group’s proportionate share of the

loses control of a subsidiary, the difference between the results of operations is included in the Mercedes-Benz

carrying amounts of the transferred assets and liabili-

ties and the consideration received is generally

reported in other operating income or expense.

Group’s Consolidated Financial Statements with a one

to three-month time lag taking into account significant

current developments. Significant events or transac-

tions are accounted for without a time lag (see Note 14).

Investments in associated companies, joint ventures

or joint operations

Entities measured at amortised cost

An associated company is an entity over which the

Group has significant influence. Significant influence is

the power to participate in the financial and operating

policy decisions of the investee. Associated companies

are generally accounted for using the equity method.

Subsidiaries, associated companies, joint ventures and

joint operations whose business is non-active or of low

volume and that individually and in sum are not material

for the Group and the fair presentation of profitability,

liquidity and capital resources, and financial position

are generally measured at amortised cost in the Consol-

idated Financial Statements.

Foreign currency translation

Transactions in foreign currency are translated at the

relevant foreign exchange rates prevailing at the trans-

action date. In subsequent periods, assets and liabili-

ties denominated in foreign currency are translated

using period-end exchange rates; gains and losses from

this measurement are recognised in profit and loss

(except for gains and losses resulting from the transla-

tion of equity instruments measured at fair value

through other comprehensive income, which are recog-

nised in other comprehensive income/loss).

194

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Assets and liabilities of foreign companies for which the

Hyperinflation

functional currency is not the euro are translated into

euros using period-end exchange rates. The translation

adjustments are presented in other comprehensive

income/loss. The components of equity are translated

using historical rates. The statements of income and

cash flows are translated into euros using the quarterly

average exchange rates during the respective periods.

To determine whether a country is to be considered as

in hyperinflation, the Mercedes-Benz Group refers to

the list published by the International Practices Task

Force (IPTF), the Center for Audit Quality and other rele-

vant international publications. If a country is in hyper-

inflation, IAS 29 Financial Reporting in Hyperinflationary

Economies has to be applied from the beginning of the

respective reporting period, i.e., from 1 January of the

respective reporting year.

The exchange rates of the US dollar, the British pound,

the Japanese yen and the Chinese renminbi – the most

significant foreign currencies for the Mercedes-Benz

As a consequence of the assessment that Argentina is in

hyperinflation, the Mercedes-Benz Group applies IAS 29

to our Argentinian business. The accounting impact is

included in retained earnings within the line item “Other”

of the Consolidated Statement of Changes in Equity.

Group – are as shown in table



D.06.

D.ꢀ6

Exchange rates

2

021

ꢆꢀꢆꢀ

CNY

€ꢅ =

USD

ꢅ =

GBP

JPY

CNY

USD

€ꢅ =

GBP

€ꢅ =

JPY

€

€ꢅ =

Average exchange rate

on ꢃ1 December

1.132ꢉ

0.8403

130.3800

7.1947

ꢅ.ꢆꢆ7ꢅ

ꢀ.ꢈꢄꢄꢀ

ꢅꢆꢇ.ꢁꢄꢀꢀ

ꢈ.ꢀꢆꢆꢉ

Average exchange rates

during the respective period

First quarter

1.2048

1.2058

1.1788

1.1435

0.8739

0.8ꢉ21

0.8553

0.8479

127.8100

131.9300

129.7ꢉ00

130.0100

7.8080

7.7840

7.ꢉ2ꢉ0

7.3102

ꢅ.ꢅꢀꢆ7

ꢅ.ꢅꢀꢅꢁ

ꢅ.ꢅꢇꢈꢄ

ꢅ.ꢅꢄꢆꢄ

ꢀ.ꢈꢇꢆ3

ꢀ.ꢈꢈ7ꢁ

ꢀ.ꢄꢀꢉꢀ

ꢀ.ꢄꢀ33

ꢅꢆꢀ.ꢅꢀꢀꢀ

ꢅꢅꢈ.ꢁꢅꢀꢀ

ꢅꢆꢁ.ꢀꢉꢀꢀ

ꢅꢆꢁ.ꢇꢅꢀꢀ

7.ꢇꢄꢉꢇ

7.ꢈꢀꢈꢀ

ꢈ.ꢀꢈꢉꢉ

7.ꢄꢀꢀꢇ

Second quarter

Third quarter

Fourth quarter

Accounting policies

Revenue recognition

goods is transferred to the customer. This generally

occurs at the time the customer takes possession of the

products.

Revenue from sales of vehicles, service parts and other

related products is recognised when control of the

Generally, payment from sales of vehicles, service parts

and other related products is made when the customer

obtains control of these products.

195

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Dealers may finance their vehicle inventory by means of

accompanied by the transfer of control to the third-

party manufacturer, no revenue is recognised under

IFRS 15.

dealer inventory financing provided by Mercedes-Benz

Mobility. Furthermore, end-customers may be credit

financed by Mercedes-Benz Mobility. Receivables from

sales financing with end-customers and dealers are pre- The Group offers extended, separately priced warranties

sented in receivables from financial services. Further

information is provided in Note 15.

for certain products as well as service and maintenance

contracts. Usual for such contracts is an advance pay-

ment or the payment of constant instalments over the

term of the contract. Revenue from these contracts is

deferred insofar as a customer has made an advance

payment and is generally recognised over the contract

period in proportion to the costs expected to be

Revenue recognition from the sale of vehicles for which

the Group enters into a repurchase obligation is

dependent on the form of the repurchase agreement:

−

Sales of vehicles by which the Mercedes-Benz Group

is obliged to repurchase the vehicles in the future are

incurred based on historical information. A future loss

on these contracts is recognised in the current period if

accounted for as operating leases. This also applies to the expected costs for outstanding services under the

a call option that grants the Mercedes-Benz Group the contract exceed unearned revenue.

right to repurchase.

For multiple-element arrangements, such as when vehi-

−

Sales of vehicles including a put option (an entity’s

obligation to repurchase the asset at the customer’s

request) are reported as operating leases if the cus-

tomer has a significant economic incentive to exercise

that right at contract inception. Otherwise, a sale with

a right of return is reported. The Mercedes-Benz

Group considers several factors when assessing

whether the customer has a significant economic

incentive to exercise his or her right. Among others,

these are the relation between the agreed repurchase

price and the expected future market value (at the

time of repurchase) of the asset, or historical return

rates.

cles are sold with free or reduced-in-price maintenance

programmes or with free online services, the Group

generally allocates revenue to the various elements

based on their estimated relative stand-alone selling

prices. To determine stand-alone selling prices, the

Mercedes-Benz Group primarily uses price lists with

consideration of average price reductions granted to its

customers.

Depending on the sales model, vehicles may be initially

sold to non-Group dealers. Subsequently a customer

decides to enter into a leasing contract with Mercedes-

Benz Mobility regarding such a vehicle. The vehicle is

therefore sold by the non-Group dealer to Mercedes-

Benz Mobility and a leasing contract is entered into with

the customer. When control of the vehicle is transferred

to the non-Group dealer, the Mercedes-Benz Group rec-

ognises revenue from the sale of the vehicle.

Arrangements such as when the Mercedes-Benz Group

provides customers with a guaranteed minimum resale

value that they receive on resale (residual-value guaran-

tee) do not constraint the customers in their ability to

direct the use of, and obtain substantially all of the ben-

efits from, the asset. At contract inception of a sale with The incremental cost of obtaining contracts is recog-

a residual-value guarantee, revenue therefore has to be

recognised, reduced by a potential compensation pay-

ment to the customer (revenue deferral).

nised as an expense when incurred if the amortisation

period would be no longer than one year.

The Mercedes-Benz Group does not adjust the promised

amount of consideration for the effects of a significant

financing component if at contract inception it is

expected that the period between the transfer of a

Under a contract manufacturing agreement, the

Mercedes-Benz Group sells assets to a third-party man-

ufacturer from which the Mercedes-Benz Group buys

back the manufactured products after completion of the promised asset or service to a customer and payment

commissioned work. If the sale of the assets is not by the customer will be no longer than one year.

196

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Revenue also includes revenue from the rental and leas- Research and non-capitalised development costs

ing business as well as interest from the financial ser-

vices business at Mercedes-Benz Mobility. Revenue

generated from operating leases is recognised on a

straight-line basis over the periods of the contracts. In

addition, sales revenue is generated at the end of lease

contracts from the subsequent sale of the vehicles.

Revenue from receivables from financial services is rec-

ognised using the effective-interest method.

Expenditure for research and development that does

not meet the conditions for capitalisation according to

IAS ꢃ8 Intangible Assets is expensed as incurred.

Borrowing costs

Borrowing costs are expensed as incurred unless they

are directly attributable to the acquisition, construction

or production of a qualifying asset and are therefore

part of the cost of that asset. Depreciation of the capi-

talised borrowing costs is presented within cost of sales.

The Mercedes-Benz Group uses a variety of sales pro-

motion programmes dependent on various market con-

ditions in individual countries as well as the respective

product life cycles and product-related factors (such as

amounts of discounts offered by competitors, excess

industry production capacity, the intensity of market

competition, and consumer demand for the products).

These programmes comprise cash offers to dealers and

customers as well as lease subsidies or loans at

Government grants

Government grants related to assets are deducted from

the carrying amount of the asset and are recognised in

earnings over the life of a depreciable asset as a

reduced depreciation expense. Government grants

which compensate the Group for expenses are recog-

nised as other operating income in the same period as

the expenses themselves. Cash-effective government

grants are shown in cash provided by operating activi-

ties.

reduced interest rates which are reported as follows:

−

Revenue is recognised net of sales reductions such as

cash discounts and sales incentives granted.

Profit/loss on equity-method investments

When loans are issued below market rates, related

receivables are recognised at present value (using

market rates) and revenue is reduced for the interest

incentive granted.

This item includes all income and expenses in connec-

tion with investments accounted for using the equity

method. In addition to the prorated profits and losses

from financial investments, it also includes profits and

losses resulting from the sale of equity interests or the

remeasurement of equity interests following a loss of

significant influence or joint control. The Mercedes-Benz

Group’s share of dilution gains and losses resulting from

the Group’s non-participation or under-proportionate

participation in capital measures of companies in which

shares are held and are accounted for using the equity

method are also included in profit/loss on equi-

ty-method investments. This item also includes impair-

ment losses and/or gains on the reversal of such impair-

ments of equity-method investments.

−

If subsidised leasing fees are agreed upon in connec-

tion with finance leases, revenue from the sale of a

vehicle is reduced by the amount of the interest

incentive granted.

19ꢂ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Other financial income/expense, net

best estimate of the expected tax payment (expected

amount or most likely amount). Tax-refund claims from

uncertain tax positions are recognised when it is proba-

ble that they can be realised. Only in the case of tax-

loss carryforwards or unused tax credits, no liability for

taxes or tax claim is recognised for these uncertain tax

positions. Instead, the deferred tax assets for the

unused tax-loss carryforwards or tax credits are

adjusted.

Other financial income/expense, net, includes all

income and expense from financial transactions which

are included neither in interest income nor in interest

expense, and which for Mercedes-Benz Mobility are

included neither in revenue nor in cost of sales. For

example, expense from the compounding of interest on

provisions for other risks is presented in this line item.

Furthermore, income and expenses from equity inter-

ests are included in other financial income/expense, net, Changes in deferred tax assets and liabilities are gener-

if such income or expenses are not presented under

equity-method investments.

ally recognised through profit and loss in deferred taxes

in the Consolidated Statement of Income, except for

changes recognised in other comprehensive income/

loss or directly in equity.

Interest income and interest expense

Interest income and interest expense include interest

income from investments in securities and from cash

and cash equivalents as well as interest expense from

liabilities. Furthermore, interest and changes in fair val-

ues related to interest-rate hedging activities as well as

income and expense resulting from the allocation of

premiums and discounts are included. The interest

components of defined benefit pension obligations and

similar obligations, as well as of the plan assets availa-

ble to cover these obligations, and interest on supple-

mentary income-tax payments or reimbursements are

also presented in this line item.

Deferred tax assets or liabilities are calculated on the

basis of temporary differences between the tax basis

and the financial reporting of assets and liabilities

including differences from consolidation, on unused

tax-loss carryforwards and unused tax credits. Measure-

ment is based on the tax rates expected to be effective

in the period in which an asset is recognised or a liabil-

ity is settled. For this purpose, the tax rates and tax

rules are used which have been enacted at the report-

ing date or are soon to be enacted. Deferred tax assets

are recognised to the extent that it is probable that

there will be future taxable income available against

which the deductible temporary differences, tax-loss

carryforwards and tax credits can be utilised. Deferred

tax liabilities for taxable temporary differences in con-

nection with investments in subsidiaries, branches,

associates and interests in joint arrangements are not

recognised if the Group is able to control the timing of

the reversal of the temporary difference and it is proba-

ble that the temporary difference will not be reversed in

the foreseeable future.

Interest income and expense and gains or losses from

derivative financial instruments related to the financial

services business are disclosed under revenue and cost

of sales respectively.

Income taxes

Income taxes are comprised of current income taxes

and deferred taxes.

Current income taxes are calculated based on the

respective local taxable income and local tax rules for

the period. In addition, current income taxes presented

for the period include adjustments for uncertain tax

payments or tax refunds for periods not yet finally

assessed; however, excluding interest expenses and

interest refunds and penalties on the underpayment of

taxes. In cases for which it is probable that amounts

declared as expenses in the tax returns might not be

recognised (uncertain tax positions), a liability for

income taxes is recognised. The amount is based on the

198

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Earnings per share

Other intangible assets with finite useful lives are gen-

erally amortised on a straight-line basis over their useful

lives (three to ten years). The amortisation period for

intangible assets with finite useful lives is reviewed at

least at each year-end. Possible impacts from the trans-

formation of the automotive industry, such as the tran-

sition to electric drive systems, are also taken into

account. Changes in expected useful lives are treated as

changes in accounting estimates. The amortisation

expense on intangible assets with finite useful lives is

recorded in functional costs.

Basic earnings per share are calculated by dividing

profit attributable to shareholders of Mercedes-Benz

Group AG by the weighted average number of shares

outstanding. As nothing occurred in the years 2021 and

2020 that resulted in any dilution, diluted earnings per

share were the same as basic earnings per share in

those years.

Intangible assets

Intangible assets are measured at acquisition or manu-

facturing cost less accumulated amortisation. If neces-

sary, accumulated impairment losses are recognised.

As part of the periodic review of the useful lives of

intangible assets, changes in the planned transition to

fully electric vehicles made it necessary to reassess the

useful lives of the capitalised development work as of

year-end 2021 and to adjust them for individual vehicle

projects. This change in estimates will be applied from

1 January 2022. The expected positive effect on earn-

ings before interest and taxes (EBIT) amounts to

€0.2 billion for each of the years 2022 and 202ꢃ.

Intangible assets with indefinite useful lives are

reviewed annually to determine whether indefinite-life

assessment continues to be appropriate. If not, the

change in the useful-life assessment from indefinite to

finite is made on a prospective basis.

Development costs for vehicles and components are

recognised if the conditions for capitalisation according

to IAS ꢃ8 are met. Subsequent to initial recognition, the

asset is carried at cost less accumulated amortisation

and accumulated impairment losses. Capitalised devel-

opment costs include all direct costs and allocable

overheads and are amortised on a straight-line basis

over the expected product life cycle (a maximum of ten

years). Amortisation of capitalised development costs is

an element of manufacturing costs and is allocated to

those vehicles and components by which they were

generated and is included in cost of sales when the

inventory (vehicles) is sold.

With acquisitions of businesses, goodwill represents the

excess of the consideration transferred over the fair val-

ues assigned to the identifiable assets proportionally

acquired and liabilities assumed. Goodwill is accounted

for at the subsidiaries in the functional currency of

those subsidiaries.

In connection with obtaining control, non-controlling

interest in the acquiree is principally recognised at the

proportionate share of the acquiree’s identifiable assets,

which are measured at fair value.

199

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Property, plant and equipment

Leasing

Property, plant and equipment are measured at acquisi-

tion or manufacturing costs less accumulated deprecia-

tion. If necessary, accumulated impairment losses are

recognised.

Leases include all contracts that transfer the right to

use a specified asset for a stated period of time in

exchange for consideration, even if the right to use such

asset is not explicitly described in the contract. The

Group is a lessee mainly of real-estate properties and a

lessor of its products.

The costs of internally produced equipment and facili-

ties include all direct costs and allocable overheads.

Acquisition or manufacturing costs include the esti-

mated costs, if any, of dismantling and removing the

item and restoring the site.

The Mercedes-Benz Group as lessee

The Mercedes-Benz Group as a lessee recognises for

generally all lease contracts right-of-use assets as well

as leasing liabilities for the outstanding lease payments.

Property, plant and equipment are depreciated over the

useful lives as shown in table



D.07.

According to IFRS 16, a lessee may elect, for leases with

a lease term of twelve months or less (short-term

leases) and for leases for which the underlying asset is

of low value, not to recognise a right-of-use asset and a

lease liability. The Mercedes-Benz Group applies both

recognition exemptions. The lease payments associated

with those leases are generally recognised as an

expense on a straight-line basis over the lease term or

another systematic basis if appropriate.

D.ꢀꢇ

Useful lives of property, plant and equipment

Buildings and site improvements

ꢅꢀ to ꢉꢀ years

ꢉ to ꢆꢉ years

3 to 3ꢀ years

Technical equipment and machinery

Other equipment, factory and office equipment

Right-of-use assets, which are included under property,

plant and equipment, are initially measured at cost. The

cost of a right-of-use asset comprises the amount of

the initial measurement of the lease liability, any lease

payments made at or before the commencement date

less any lease incentives received from the lessor, any

initial direct costs and an estimate of costs to be

incurred in dismantling or removing the underlying

The industrial business activities of the Mercedes-Benz

Group have been confronted with worldwide competi-

tive pressure and technological changes. Our continu-

ous efforts to increase efficiency include improving the

utilisation of our production facilities. Within the con-

text of the regular review of useful lives, those for

scheduled depreciation of property, plant and equip-

ment were reassessed and partially extended at the end asset. All leasing incentives already received from the

of 2020.

lessor are deducted.

This change in estimates has been applied from

1

January 2021 and leads to a positive impact on earn-

ings before interest and taxes (EBIT) of €0.8 billion in

the reporting period. The effect is mainly included in

cost of sales and is almost exclusively attributable to

the reportable segment Mercedes-Benz Cars & Vans.

The expected effect for the year 2022 is €0.ꢃ billion.

200

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Lease liabilities, which are assigned to financing liabili-

In the subsequent measurement of a lease liability, the

carrying amount is increased to reflect interest on the

lease liability and reduced to reflect the lease payments

made.

ties, are measured initially at the present value of the

lease payments still to be made. The lease liabilities

include the following lease payments:

−

fixed payments including de facto fixed payments,

less lease incentives receivables from the lessor;

According to IFRS 16, the depreciation of right-of-use

assets is recognised within functional costs. The inter-

est due on the lease liability is a component of interest

expense.

−

variable lease payments linked to an index or interest

rate;

Extension and termination options are part of a number

of leases particularly of real estate. Such contract terms

offer the Mercedes-Benz Group the greatest possible

flexibility. In determining the lease term, all facts and

circumstances offering economic incentives for exercis-

ing extension options or not exercising termination

options are taken into account. In determining the lease

term, those options are only considered if their exercise

is reasonably certain.

amounts expected to be payable under residual-value

guarantees;

the exercise price of purchase options, when exercise

is estimated to be reasonably certain, and

contractual penalties for the termination of a lease if

the lease term reflects the exercise of a termination

option.

Sale and leaseback

The Mercedes-Benz Group generally also applies the

option for contracts comprising lease components as

well as non-lease components not to split these com-

ponents.

In a sale and leaseback transaction, the requirements of

IFRS 15 are applied to ascertain whether the transfer of

an asset has to be accounted for as a sale.

If the transfer of an asset does not satisfy the require-

ments of IFRS 15 to be accounted for as a sale of the

asset, the transferred asset is still recognised and a

financial liability is recognised equal to the transfer pro-

ceeds in accordance with IFRS 9.

Lease payments are discounted at the rate implicit in

the lease if that rate can readily be determined. Other-

wise, discounting is at the incremental borrowing rate.

The incremental borrowing rate, which is mainly applied

at the Mercedes-Benz Group, is based on risk-adjusted

interest rates and determined for the respective lease

terms and currencies. As the cash-flow pattern of the

reference interest rates (bullet bonds) does not corre-

spond to the cash-flow pattern of a lease contract

If the transfer of an asset is accounted for as a sale, the

lessee accounting principles described above apply to

those sold assets if the Mercedes-Benz Group leases

them back from the buyer. Accordingly, only the amount

of any gain or loss that relates to the rights transferred

to the buyer-lessor is recognised.

(annuity), we use a duration adjustment in order to

account for that difference.

A right-of-use asset is subsequently measured at cost

less any accumulated depreciation and, if necessary,

any accumulated impairment. If the lease transfers

ownership of the underlying asset to the lessee at the

end of the lease term or if the cost of the right-of-use

asset reflects that the lessee will exercise a purchase

option, the right-of-use asset is depreciated to the end

of the useful life of the underlying asset. Otherwise, the

right-of-use asset is depreciated to the end of the lease

term.

201

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

The Mercedes-Benz Group as lessor

determination of residual values is adjusted and further

developed with regard to methods, processes and sys-

tems.

Based on the risk and rewards associated with a leased

asset, it is assessed whether economic ownership of

the leased asset is transferred to the lessee (so-called

finance leases) or remains with the lessor (so-called

operating leases).

In the case of accounting as an operating lease, these

vehicles are capitalised at (depreciated) cost of produc-

tion under leased equipment and are depreciated over

the contract term on a straight-line basis with consider-

ation of the expected residual values. Changes in the

expected residual values lead either to prospective

adjustments of the scheduled depreciation or, if neces-

sary, to an impairment loss. The vehicles are allocated

to the segment which bears substantially all of the

residual-value risk.

Operating leases, i.e., by which economic ownership of

the vehicle remains at the Mercedes-Benz Group, relate

to vehicles that the Group produces itself and leases to

third parties. Additionally, an operating lease may have

to be reported with sales of vehicles for which the

Group enters into a repurchase obligation:

−

Sales of vehicles by which the Mercedes-Benz Group

is obliged to repurchase the vehicles in the future are

accounted for as operating leases. This also applies to

a call option that only grants the Mercedes-Benz

Group the right to repurchase.

Operating leases also relate to vehicles, primarily Group

products that Mercedes-Benz Mobility acquires from

non-Group dealers or other third parties and leases to

end customers. These vehicles are presented at (amor-

tised) cost of acquisition under leased equipment in the

Mercedes-Benz Mobility segment. If these vehicles are

Group products and are subsidised, the subsidies are

deducted from the cost of acquisition. After revenue is

received from the sale to independent dealers, these

Group products generate revenue from lease payments

and subsequent resale on the basis of the separate

leasing contracts. The revenue received from the sale of

Group products to dealers is estimated by the Group as

being of the magnitude of the respective addition to

leased equipment at Mercedes-Benz Mobility. In 2021,

additions to leased equipment from these vehicles at

Mercedes-Benz Mobility amounted to approximately

−

Sales of vehicles including a put option (an entity’s

obligation to repurchase the asset at the customer’s

request) are reported as operating leases if the cus-

tomer has a significant economic incentive to exercise

that right. Otherwise, a sale with a right of return is

reported. The Mercedes-Benz Group considers sev-

eral factors when assessing whether a customer has a

significant economic incentive to exercise his or her

right at contract inception. Among others, these are

the relation between repurchase price and the

expected future market value (at the time of repur-

chase) of the asset or historical return rates.

€

10 billion (2020: approximately €11 billion).

As part of the residual-value management process,

especially for operating lease contracts, certain

In the case of finance leases, the Group presents the

receivables under receivables from financial services in

an amount corresponding to the net investment of the

lease agreements. The net investment of a lease agree-

ment is the gross investment (future lease payments

and non-guaranteed residual value) discounted at the

rate upon which the lease agreement is based.

assumptions are regularly made at local and corporate

levels regarding the expected level of prices, based

upon which the cars to be returned in the leasing busi-

ness are evaluated. If changing market developments

lead to a negative deviation from assumptions, there is

a risk of lower residual values of used cars. Depending

on the region and the current market situation, the

risk-mitigation measures taken generally include contin- The leased equipment of the Mercedes-Benz Mobility

uous market monitoring as well as, if required,

segment includes commercial vehicles and buses (pro-

duced by Daimler Truck) which have been acquired from

external dealers or other third parties not related to the

Mercedes-Benz Group. Mercedes-Benz Mobility usually

receives a residual-value guarantee from Daimler Truck

price-setting strategies or sales-promotion measures

designed to regulate vehicle inventories. The quality of

market forecasts is verified by regular comparisons of

internal and external sources, and, if required, the

202

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

for this leased equipment in connection with the obliga-

Equity-method investments

tion to return the respective commercial vehicles and

buses to Daimler Truck. Such leased equipment is

depreciated over the contractual term on a straight-line

basis to the guaranteed residual value. The residu-

al-value guarantee does not affect classification as an

operating lease as Daimler Truck is a related party to

Mercedes-Benz Mobility after the spin-off.

The initial recognition of interests in investments

accounted for using the equity method is generally

made with their acquisition costs. If the Group loses

control of a subsidiary and subsequently presents it at

equity, the fair value of the retained shares represents

the acquisition cost. On the date of acquisition, a posi-

tive difference between cost of acquisition and the

Mercedes-Benz Group’s share of the fair values of the

Additionally, the Mercedes-Benz Group will continue the identifiable assets and liabilities of the associated com-

leasing and sales-financing business for Daimler Truck’s

commercial vehicles and buses in some markets. These

vehicles are directly acquired from Daimler Truck and

leased to the end customer. Insofar as a mandatory

vehicle return has been agreed, there is a rental con-

tract (head lease) between Mercedes-Benz Mobility and

Daimler Truck. The contract between Mercedes-Benz

pany or joint venture is determined and recognised as

investor level goodwill. The goodwill is included in the

carrying amount of the equity-method investment. If an

equity interest in an existing associated company is

increased without change in significant influence, good-

will is determined only for the additionally acquired

interest; the previous investment is not remeasured at

Mobility and the end customer constitutes a sublease in fair value.

this respect.

The Mercedes-Benz Group reviews on each reporting

Accounting for and classification of a sublease depend

on whether the contracts were concluded before or

after the legal spin-off and hive-down of Daimler’s com-

mercial vehicle business. The leases that were con-

cluded before the legal spin-off and hive-down are con-

tinued as operating leases. The head lease is presented

under leased equipment as a right of use, which was

recognised at fair value at the spin-off date and subse-

quently depreciated on a straight-line basis. In addition,

a residual-value receivable from the companies of the

Daimler Truck Group is recognised. However, the leasing

contracts concluded after the legal spin-off and hive-

date whether there is any objective indication of impair-

ments or impairment reversals of equity-method invest-

ments. If such indications exist, the Group determines

the impairment loss or reversal to be recognised. If the

carrying amount exceeds the recoverable amount of an

investment, the carrying amount is written down to the

recoverable amount. The recoverable amount is the

greater of fair value less costs to sell and value in use.

An impairment reversal is carried out if there is objec-

tive evidence for an impairment reversal. If such an

assessment is made, the recoverable amount is remeas-

ured. An impairment reversal is recognised to the extent

down are classified and accounted for as finance leases. that the recoverable amount has increased subsequent

The net investment in the lease corresponds to the

right-of-use asset from the head lease. In addition to

the finance lease, Mercedes-Benz Mobility recognises a

residual-value receivable from the Daimler Truck Group

in the amount of the guaranteed residual value. The

head lease is not recorded separately.

to the impairment and is limited to the amount by which

an asset has been impaired.

Gains or losses (to be eliminated) from transactions

with companies accounted for using the equity method

are recognised through profit and loss with correspond-

ing adjustments of the investments’ carrying amounts.

Gains or losses from the contribution of interests in

subsidiaries to investments which are measured using

the equity method are also subject to elimination

adjustments to the carrying amount of the investment.

20ꢃ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Impairment of non-current non-financial assets

The Mercedes-Benz Group assesses at each reporting

Mercedes-Benz Mobility, a risk-adjusted interest rate of

9% after taxes is applied (unchanged from the previous

date whether there is an indication that an asset may be year). Whereas the discount rate for the cash-generating

impaired or whether there is an indication that a previ-

ously recognised impairment loss may be reversed. If

such indication exists, the Mercedes-Benz Group esti-

mates the recoverable amount of the asset. The recov-

erable amount is determined for each individual asset

unless the asset generates cash inflows that are not

largely independent of those from other assets or

groups of assets (cash-generating units). Goodwill and

other intangible assets with indefinite useful lives are

tested at least annually for impairment; this takes place

at the level of the cash-generating units. If the carrying

unit Mercedes-Benz Mobility represents the cost of

equity, the risk-adjusted interest rate for the cash-gen-

erating units of the automotive business is based on the

weighted average cost of capital (WACC). This is calcu-

lated based on the capital asset pricing model (CAPM),

taking into account current market expectations. In cal-

culating the risk-adjusted interest rate for impair-

ment-test purposes, specific peer group information is

used for beta factors, capital-structure data and cost of

debt. Periods not covered by the forecast are taken into

account by recognising a residual value (terminal value),

amount of an asset or of a cash-generating unit exceeds which does not include any growth rates. In line with

the recoverable amount, an impairment loss is recog-

nised for the difference.

the detailed planning period, the derivation of the ter-

minal value also considers expectations regarding the

impacts of the transformation of the automotive indus-

try as well as possible regulatory changes, e.g., in con-

nection with sustainability aspects. In addition, several

sensitivity analyses are conducted. These show that

even in the case of more unfavourable premises for

main influencing factors with respect to the original

planning, no need for impairment exists. If value in use

is lower than the carrying amount, fair value less costs

of disposal is additionally calculated to determine the

recoverable amount.

The recoverable amount is the higher of fair value less

costs of disposal and value in use. For cash-generating

units, the Mercedes-Benz Group in a first step deter-

mines the respective recoverable amount as value in

use and compares it with the respective carrying

amount (including goodwill). The cash-generating units

are generally defined as the segments.

Value in use is measured by discounting expected

future cash flows from the continuing use of the

cash-generating units using a risk-adjusted interest rate. An assessment for assets other than goodwill is made at

Future cash flows are determined on the basis of the

long-term planning, which is approved by management

and which is valid at the date when the impairment test

is conducted. This planning, which covers the period

until 2026, is based on expectations regarding future

market shares, the general development of respective

markets as well as the products’ profitability, taking into

consideration the effects of the transformation of the

automotive industry. Furthermore, in determining value

in use, a risk assessment is performed, which includes

for example market risks and risks related to the legal

and political framework. The planning premises are

checked for plausibility with regard to the historical

development as well as external sources of information.

The rounded risk-adjusted interest rates used to dis-

count cash flows, which are calculated for each

each reporting date as to whether there is any indica-

tion that previously recognised impairment losses may

no longer exist or may be reversed. If this is the case,

the Mercedes-Benz Group records a partial or entire

reversal of the impairment; the carrying amount is

thereby increased to the recoverable amount. However,

the increased carrying amount may not exceed the car-

rying amount that would have been determined (net of

depreciation) if no impairment loss had been recog-

nised in prior years.

cash-generating unit, are unchanged from the previous

year at 8% after taxes for the cash-generating units of

the automotive business. For the cash-generating unit

204

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Discontinued operations and non-current assets

The Group classifies non-current assets or disposal

groups as held for sale if the carrying amount will be

recovered principally through a sale transaction rather

than through continuing use. In this case, the assets or

disposal groups are no longer depreciated but meas-

held for distribution or sale and disposal groups

The Group reports discontinued operations if part of a

company is held for distribution or sale or has already

been disposed of and the part of a company represents

a separate significant business or geographical business ured at the lower of carrying amount and fair value less

area. In the course of the spin-off and hive-down of

Daimler’s commercial vehicle business, the Daimler

Trucks & Buses segment represented a separate signifi-

cant business and was therefore almost entirely classi-

fied as a discontinued activity.

costs to sell. Immediately before classification as held

for sale, it is assessed if the assets are impaired based

on the applicable individual regulations. If fair value less

costs to sell subsequently increases, any impairment

loss previously recognised is reversed. This reversal is

restricted to the impairment loss previously recognised

for the assets or disposal group concerned.

The continuing operations are recognised in the Consol-

idated Statement of Income for both the current report-

ing period and the comparative period.

The Group generally discloses these assets held for dis-

tribution or sale and disposal groups separately in the

Consolidated Statement of Financial Position. The pri-

or-year figures are reported unchanged.

The Mercedes-Benz Group makes use of the option to

disclose the cash flows from discontinued operations

not separately in the Consolidated Statement of Cash

Flow, but in the Notes to the Consolidated Financial

Statements.

Inventories

Inventories are measured at the lower of acquisition or

manufacturing cost and net realisable value. The net

realisable value is the expected sales price less esti-

mated costs of completion and estimated costs to sell.

The acquisition or manufacturing costs of inventories

are generally based on the specific identification

method and include costs incurred in acquiring the

inventories and bringing them to their present location

and condition. Acquisition or manufacturing costs for

large numbers of inventories that are interchangeable

are allocated under the average-cost formula. In the

case of manufactured inventories and work in progress,

manufacturing cost also includes production overheads

based on normal capacity.

The Group classifies non-current assets or disposal

groups as held for distribution if it has committed to

distribute non-current assets or disposal groups and an

active plan for the execution of the sale has been

decided on and started by the responsible management

level and is most likely to result in a sale.

205

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Financial instruments

In addition, derivatives, including embedded derivatives

separated from the host contract, which are not classi-

fied as hedging instruments in hedge accounting, as

well as financial assets acquired for the purpose of sell-

ing in the short term that are classified as held for trad-

ing, are included here. Gains or losses on these financial

assets are recognised in profit or loss.

A financial instrument is any contract that gives rise to a

financial asset of one entity and a financial liability or

equity instrument of another entity. Financial instru-

ments in the form of financial assets and financial liabil-

ities are generally presented separately. Financial

instruments are recognised as soon as the Mercedes-

Benz Group becomes a party to the contractual provi-

sions of the financial instrument. In the case of pur-

chases or sales of financial assets through the regular

market, the Mercedes-Benz Group uses the transaction

date as the date of initial recognition or derecognition.

Fꢌꢍꢎꢍꢏꢌꢎꢐ ꢎꢑꢑꢒꢓꢑ ꢎꢓ ꢎꢜꢙꢕꢓꢌꢑꢒꢝ ꢏꢙꢑꢓ. Financial assets at

amortised cost are non-derivative financial assets with

contractual cash flows that consist solely of payments

of principal and interest on the nominal amount out-

standing and which are held with the aim of collecting

the contractual cash flows, such as receivables from

financial services, trade receivables or cash and cash

equivalents (business model “hold to collect”). Cash

and cash equivalents consist primarily of cash on hand,

cheques and demand deposits at banks, as well as debt

instruments and certificates of deposits with a remain-

ing term when acquired of up to three months, which

are not subject to any material value fluctuations. Cash

and cash equivalents correspond with the classification

in the Consolidated Statement of Cash Flows.

Upon initial recognition, financial instruments are meas-

ured at fair value. For the purpose of subsequent meas-

urement, financial instruments are allocated to one of

the categories mentioned in IFRS 9 Financial Instru-

ments (financial assets measured at amortised cost,

financial assets measured at fair value through other

comprehensive income and financial assets measured

at fair value through profit or loss). Transaction costs

directly attributable to acquisition or issuance are con-

sidered when determining the carrying amount if the

financial instruments are not measured at fair value

through profit or loss.

After initial recognition, financial assets at amortised

cost are subsequently carried at amortised cost using

the effective-interest method less any loss allowances.

Gains and losses are recognised in the Consolidated

Statement of Income when the financial assets at amor-

tised cost are impaired or derecognised. Interest effects

on the application of the effective-interest method are

also recognised in profit or loss as well as effects from

foreign currency translation.

Financial assets

Financial assets primarily comprise receivables from

financial services, trade receivables, receivables from

banks, cash on hand, derivative financial assets, mar-

ketable securities and similar investments and financial

investments. The classification of financial instruments

is based on the business model in which these instru-

ments are held and on their contractual cash flows.

Fꢌꢍꢎꢍꢏꢌꢎꢐ ꢎꢑꢑꢒꢓꢑ ꢎꢓ ꢔꢎꢌꢕ ꢖꢎꢐꢗꢒ ꢓꢘꢕꢙꢗꢚꢘ ꢙꢓꢘꢒꢕ ꢏꢙꢜꢛꢕꢒ-

ꢘꢒꢍꢑꢌꢖꢒ ꢌꢍꢏꢙꢜꢒ. Financial assets at fair value through

other comprehensive income are non-derivative finan-

cial assets with contractual cash flows that consist

solely of payments of principal and interest on the nom-

inal amount outstanding and which are held to collect

the contractual cash flows as well as to sell the financial

assets, e.g., to achieve a defined liquidity target (busi-

ness model “hold to collect and sell”). This category

also includes equity instruments not held for trading for

which the option to recognise changes in the fair value

of the instrument within other comprehensive income

The determination of the business model is carried out

at the portfolio level and is based on management’s

intention and past transaction patterns. Assessments of

the contractual cash flows are made on an instru-

ment-by-instrument basis.

Fꢌꢍꢎꢍꢏꢌꢎꢐ ꢎꢑꢑꢒꢓꢑ ꢎꢓ ꢔꢎꢌꢕ ꢖꢎꢐꢗꢒ ꢓꢘꢕꢙꢗꢚꢘ ꢛꢕꢙꢔꢌꢓ ꢙꢕ ꢐꢙꢑꢑ.

Financial assets at fair value through profit or loss

include financial assets with cash flows other than

those of principal and interest on the nominal amount

outstanding. Furthermore, financial assets that are held

in a business model other than “hold to collect” or “hold has been applied.

to collect and sell” are included here.

206

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

After initial measurement, financial assets at fair value

If a financial asset is defined as credit-impaired or in

default, it is transferred to stage ꢃ and measured at life-

time expected credit loss. Objective evidence for a

credit-impaired financial asset includes 91 days past

due date and other information about significant finan-

cial difficulties of the debtor.

through other comprehensive income are measured at

fair value, with unrealised gains or losses being recog-

nised in other comprehensive income/loss. Upon the

disposal of debt instruments, the accumulated gains

and losses recognised in other comprehensive income/

loss resulting from measurement at fair value are recog-

nised in profit or loss. Interest earned on financial

assets at fair value through other comprehensive

income is generally reported as interest income using

the effective-interest method. Changes in the fair value

of equity instruments measured at fair value through

other comprehensive income are not recycled to profit

or loss, but reclassified to retained earnings upon dis-

posal. Dividends are recognised in profit or loss when

the right to payment has been established.

The determination of whether a financial asset has

experienced a significant increase in credit risk is based

on an assessment of the probability of default, which is

made at least quarterly, incorporating external credit

rating information as well as internal information on the

credit quality of the financial asset. For debt instru-

ments that are not receivables from financial services, a

significant increase in credit risk is assessed mainly

based on past-due information or the probability of

default.

Impairment of financial assets

At each reporting date, a loss allowance is recognised

for financial assets, loan commitments and financial

guarantees other than those to be measured at fair

value through profit or loss reflecting expected losses

for these instruments. Expected credit losses are allo-

cated using three stages:

A financial asset is migrated to stage 2 if the asset’s

credit risk has increased significantly compared to its

credit risk at initial recognition. The credit risk is

assessed based on the probability of default. For trade

receivables, the simplified approach is applied whereby

all trade receivables are allocated to stage 2 initially.

Hence, no determination of significant increases in

credit risk is necessary.

Stage 1: expected credit losses within the next twelve

months

The Mercedes-Benz Group applies the low-credit-risk

exception to the stage allocation to quoted debt instru-

ments with investment-grade ratings. These debt instru-

ments are always allocated to stage 1.

Stage 1 includes all contracts with no significant

increase in credit risk since initial recognition and usu-

ally includes new acquisitions and contracts with fewer

than ꢃ1 days past due date. The portion of the lifetime

expected credit losses resulting from default events

possible within the next 12 months is recognised.

In stage 1 and 2, the effective interest revenue is calcu-

lated based on gross carrying amounts. If a financial

asset becomes credit impaired in stage ꢃ, the effective

interest revenue is calculated based on its net carrying

amount (gross carrying amount adjusted for any loss

allowance).

Stage 2: expected credit losses over the lifetime – not

credit impaired

If a financial asset has a significant increase in credit

risk since initial recognition but is not yet credit

impaired, it is moved to stage 2 and measured at life-

time expected credit loss, which is defined as the

expected credit loss that results from all possible

default events over the expected life of a financial

instrument.

Stage ꢃ: expected credit losses over the lifetime – credit

impaired

20ꢂ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Mꢒꢎꢑꢗꢕꢒꢜꢒꢍꢓ ꢙꢔ ꢒꢞꢛꢒꢏꢓꢒꢝ ꢏꢕꢒꢝꢌꢓ ꢐꢙꢑꢑꢒꢑ. Expected

A financial instrument is written off when there is no

reasonable expectation of recovery, for example, at the

end of insolvency proceedings or after a court decision

of uncollectibility.

credit losses are measured in a way that reflects:

a) the unbiased and probability-weighted amount;

b) the time value of money, and

Significant modification of financial assets (e.g., with a

change in the present value of the contractual cash

flows of 10%) also leads to derecognition of the financial

assets with a simultaneous recognition of new financial

assets. This is expected to be rare and immaterial for

receivables from financial services. If the terms of a

contract are renegotiated or modified and this does not

result in derecognition of the contract, then the gross

carrying amount of the contract has to be recalculated

and a modification gain or loss has to be recognised in

profit or loss.

c) reasonable and supportable information (if availa-

ble without undue cost or effort) at the reporting

date about past events, current conditions and

forecasts of future economic conditions.

Expected credit losses are measured as the probabili-

ty-weighted present value of all cash shortfalls over the

expected life of each financial asset. For receivables

from financial services, expected credit losses are

mainly calculated with a statistical model using three

major risk parameters: probability of default, loss given

default and exposure at default.

The estimation of these risk parameters incorporates all

available relevant information, not only historical and

current loss data, but also reasonable and supportable

forward-looking information reflected by the future

expectation factors. This information includes macroe-

conomic factors (e.g., gross domestic product growth,

unemployment rate, cost performance index) and fore-

casts of future economic conditions. For receivables

from financial services, these forecasts are performed

using a scenario analysis (basic scenario, optimistic sce-

nario and pessimistic scenario). The impairment amount

for trade receivables is predominantly determined on a

collective basis.

208

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Offsetting of financial instruments

Derivative financial instruments and hedge

Financial assets and financial liabilities are offset and

the net amount is presented in the Consolidated State-

ment of Financial Position provided that an enforceable

right currently exists to offset the amounts involved,

and there is an intention either to carry out the offset-

ting on a net basis or to settle a liability when the

related asset is sold.

accounting

The Group uses derivative financial instruments exclu-

sively for hedging financial risks that arise from its oper-

ating or financing activities or liquidity management.

These are mainly currency risks, interest-rate risks and

commodity-price risks.

Embedded derivatives are principally separated from

the host contract and recognised separately. However,

embedded derivatives are not separated from the host

contract if that host contract is a financial asset, if the

Mercedes-Benz Group chooses to measure a hybrid

contract at fair value through profit or loss, or if the

embedded derivative is closely related to the host con-

tract.

Financial liabilities

Financial liabilities primarily include trade payables, lia-

bilities to banks, bonds, derivative financial liabilities

and other liabilities.

Fꢌꢍꢎꢍꢏꢌꢎꢐ ꢐꢌꢎꢟꢌꢐꢌꢓꢌꢒꢑ ꢜꢒꢎꢑꢗꢕꢒꢝ ꢎꢓ ꢎꢜꢙꢕꢓꢌꢑꢒꢝ ꢏꢙꢑꢓ.

After initial recognition, financial liabilities are subse-

quently measured at amortised cost using the effec-

tive-interest method.

Derivative financial instruments are measured at fair

value upon initial recognition and at each subsequent

reporting date. The fair value of listed derivatives is

equal to their positive or negative market value. If a

market value is not available, fair value is calculated

using standard financial valuation models such as dis-

counted cash flow or option-pricing models. Derivatives

are recognised as assets if their fair value is positive

and as liabilities if their fair value is negative.

Insofar as the Mercedes-Benz Group enters into reverse

factoring agreements in which trade receivables of a

supplier are transferred to a financial intermediary,

changes in the presentation of the original trade paya-

bles may occur. That would be the case if these liabili-

ties differed in nature and function from other trade

payables. As a result, these liabilities would be pre-

sented separately.

If the requirements for hedge accounting set out in

IFRS 9 are met, the Mercedes-Benz Group designates

and documents the hedge relationship from the date a

derivative contract is entered into as a fair-value hedge,

a cash-flow hedge or a hedge of a net investment in a

Fꢌꢍꢎꢍꢏꢌꢎꢐ ꢐꢌꢎꢟꢌꢐꢌꢓꢌꢒꢑ ꢎꢓ ꢔꢎꢌꢕ ꢖꢎꢐꢗꢒ ꢓꢘꢕꢙꢗꢚꢘ ꢛꢕꢙꢔꢌꢓ ꢙꢕ

ꢐꢙꢑꢑ. Financial liabilities at fair value through profit or

loss include financial liabilities held for trading. Deriva-

tives (including embedded derivatives separated from

the host contract) which are not used as hedging instru- foreign business operation. In a fair-value hedge, the

ments in hedge accounting are classified as held for

trading. Gains or losses on liabilities held for trading are

recognised in profit or loss.

changes in the fair value of a recognised asset or liabil-

ity or an unrecognised firm commitment are hedged. In

a cash-flow hedge, the variability of cash flows to be

received or paid from expected transactions related to a

recognised asset or liability or a highly probable fore-

cast transaction is hedged. The documentation of the

hedging relationship includes the objectives and strat-

egy of risk management, the type of hedging relation-

ship, the nature of the risk being hedged, the identifica-

tion of the eligible hedging instrument and the eligible

hedged item, as well as an assessment of the effective-

ness requirements comprising the risk mitigating eco-

nomic relationship, the absence of deteriorating effects

from credit risk and the appropriate hedge ratio.

209

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Consolidated Financial Statements

Hedging transactions are regularly assessed to deter-

mine whether the effectiveness requirements are met

while they are designated.

designated hedged item, loss of the economic relation-

ship between the hedged item and the hedging instru-

ment, disposal or termination of the hedging instrument,

or a revision of the documented risk-management

objective of a particular hedge relationship. Accumu-

lated hedging gains and losses from cash-flow hedges

are retained and are reclassified from equity as

described at maturity if the hedged future cash flows

are still expected to occur. Otherwise, accumulated

hedging gains and losses are immediately reclassified to

profit or loss.

Changes in fair value of non-designated derivatives are

recognised in profit or loss. For fair-value hedges,

changes in the fair value of the hedged item and the

derivative are recognised in profit or loss. For cash-flow

hedges, fair-value changes in the effective portion of

the hedging instrument are recognised after tax in other

comprehensive income.

Under IFRS 9, for cash-flow hedges in procurement

transactions expected with a high degree of probability,

If derivative financial instruments do not or no longer

qualify for hedge accounting because the qualifying cri-

designation can be made for separable risk components teria for hedge accounting are not or are no longer met,

of these non-financial hedged items.

the derivative financial instruments are classified as

held for trading and are measured at fair value through

profit or loss.

Under IFRS 9, with cash-flow hedges, amounts recog-

nised in other comprehensive income as effective hedg-

ing gains or losses from hedging instruments are

removed from the reserves for derivative financial

instruments and directly included in the initial cost or

carrying amount of the hedged item at initial recogni-

Pensions and similar obligations

The measurement of defined benefit plans for pensions

and other post-employment benefit obligations (medi-

cal care) in accordance with IAS 19 Employee Benefits is

tion if the hedged item, e.g., forecast transaction, results based on the projected unit-credit method. Plan assets

in the recognition of a non-financial asset or non-finan-

cial liability.

invested to cover defined benefit pension obligations

and other post-employment benefit obligations (medi-

cal care) are measured at fair value and offset against

the corresponding obligations.

For other cash-flow hedges, the accumulated hedging

gains or losses from hedging instruments are reclassi-

fied from the reserves for derivative financial instru-

ments to the Consolidated Statement of Income when

the hedged item affects profit or loss. The ineffective

portions of fair-value changes are recognised directly in

profit or loss.

The balance of defined benefit plans for pensions and

other post-employment benefit obligations and plan

assets (net pension obligation or net pension assets)

accrues interest at the discount rate used as a basis for

the measurement of the gross pension obligation. The

resulting net interest expense or income is recognised

in profit and loss under interest expense or interest

income in the Consolidated Statement of Income. The

other expenses resulting from pension obligations and

other post-employment benefit obligations (medical

care), which mainly result from entitlements acquired

during the year under review, are taken into considera-

tion in functional costs in the Consolidated Statement

of Income. Differences between the assumptions made

and actual developments as well as changes in actuarial

assumptions for the measurement of defined benefit

plans and similar obligations result in actuarial gains

and losses, which have a direct impact on the Consoli-

dated Statement of Financial Position.

For derivative instruments designated in a hedge rela-

tionship, certain components can be excluded from

designation and the changes in these components’ fair

value are then deferred in other comprehensive income

under IFRS 9. This may apply for example to the time

value of options, the forward element of a forward con-

tract or cross-currency basis spreads.

Hedge relationships are to be discontinued prospec-

tively if a particular hedge relationship ceases to meet

the qualifying criteria for hedge accounting under

IFRS 9. Instances that require discontinuation of hedge

accounting are, among others, changes to the

210

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

The discount factors used to calculate the present val-

ues of defined benefit pension obligations are to be

determined – with maturities and currencies matching

Restructuring provisions are set up in connection with

programmes that materially change the scope of busi-

ness performed by a segment or business unit or the

the pension payments – by reference to market yields at manner in which business is conducted. In most cases,

the end of the reporting period on high-quality corpo-

rate bonds in the respective markets. For very long

maturities, there are no high-quality corporate bonds

available as a benchmark. The respective discount fac-

tors are estimated by extrapolating current market rates

along the yield curve.

restructuring expenses include termination benefits and

compensation payments due to the termination of

agreements with suppliers and dealers. Restructuring

provisions are recognised when the Group has a

detailed formal plan that has either commenced imple-

mentation or been announced.

Gains or losses on the curtailment or settlement of a

defined benefit plan are recognised in profit or loss

when the curtailment or settlement occurs.

Contract and refund liabilities

Cꢙꢍꢓꢕꢎꢏꢓ ꢐꢌꢎꢟꢌꢐꢌꢓꢌꢒꢑ. A contract liability is an entity’s

obligation to transfer goods or services to a customer

for which the entity has received consideration (or the

amount is due) from the customer.

Provisions for other risks

A provision is recognised when a liability to third parties

has been incurred, an outflow of resources is probable

and the amount of the obligation can be reasonably

estimated. The amount recognised as a provision repre-

sents the best estimate of the obligation at the report-

ing date. Provisions with an original maturity of more

Contract liabilities occur at the Mercedes-Benz Group

especially from prepaid service and maintenance con-

tracts and extended warranties.

Rꢒꢔꢗꢍꢝ ꢐꢌꢎꢟꢌꢐꢌꢓꢌꢒꢑ. A refund liability occurs if the

than one year are discounted to the present value of the Mercedes-Benz Group receives consideration from a

expenditures expected to settle the obligation at the

end of the reporting period. If the criteria of the regula-

tions on recognition and measurement of provisions are

not fulfilled and the possibility of a cash outflow upon

customer and expects to refund some or all of that con-

sideration to the customer. A refund liability is meas-

ured at the amount of consideration received for which

the Mercedes-Benz Group does not expect to be enti-

settlement is not unlikely, the item is to be presented as tled and is thus not included in the transaction price.

a contingent liability, insofar as it is adequately measur-

able. The amount disclosed as a contingent liability rep-

resents the best estimate of the possible obligation at

the reporting date. Provisions and contingent liabilities

are regularly reviewed and adjusted as further informa-

tion becomes available or circumstances change.

Refund liabilities occur at the Mercedes-Benz Group

especially in the following circumstances:

− obligations from sales transactions (especially perfor-

mance bonuses, discounts and other price conces-

sions) in the scope of IFRS 15, and

A provision for expected warranty costs is recognised

when a product is sold or when a new warranty pro-

gramme is initiated. Estimates for accrued warranty

costs are primarily based on historical experience.

− sales with the right of return and residual-value guar-

antees.

211

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Share-based payment

Share-based payment comprises cash-settled liability

awards.

Accounting estimates and management judgements

due to the covid-ꢁꢈ pandemic

Due to the still not fully foreseeable global conse-

quences of the covid-19 pandemic, especially the

accounting estimates and management judgements

regarding the reporting of assets and liabilities are sub-

ject to increased uncertainty.

Liability awards are measured at fair value at each bal-

ance sheet date until settlement and are classified as

provisions under consideration of vesting conditions.

The profit or loss of the period equals the addition to

and/or the reversal of the provision during the reporting

period and the dividend equivalent paid during the

period, and is included in functional costs.

With the update of the accounting estimates and man-

agement judgements, available information on the

expected economic developments and country-specific

governmental counter-measures has been included.

Presentation in the Consolidated Statement of Cash

Flows

Effects may occur in particular on the measurement of

inventories and financial assets, especially receivables

from financial services and investments accounted for

using the equity method, as well as on impairment tests

for cash-generating units.

Interest paid as well as interest and dividends received

are classified as cash provided by / used for operating

activities. The cash flows from short-term marketable

debt securities with high turnover rates and significant

amounts are offset and presented within cash provided

by / used for investing activities.

Accounting estimates and management judgements

due to sustainability aspects

The Mercedes-Benz Group is continuously working on

the further development of its sustainable business

strategy and has set the goal of climate neutrality by

ꢂ. Accounting estimates and management

judgements

20ꢃ9 with Ambition 20ꢃ9. With the strategic step from

In the Consolidated Financial Statements, to a certain

degree, estimates and management judgements have to

be made which can affect the amounts and reporting of

assets and liabilities, the reporting of contingent assets

and liabilities on the balance sheet date, and the

“electric first” to “electric only”, Mercedes-Benz is accel-

erating its transformation into an emission-free and

software-driven future. The Consolidated Financial

Statements take into account the main climate-related

developments and risks associated with the transforma-

amounts of income and expense reported for the period. tion, which also include the climate targets for 2050

The major items affected by such estimates and man-

agement judgements are described as follows. Actual

amounts may differ from the estimates. Changes in the

estimates and management judgements can have a

material impact on the Consolidated Financial State-

ments.

agreed in Paris. In this context, estimates and manage-

ment judgements relate in particular to assumptions

regarding future legal regulations and developments in

the market environment, which are subject to high

dynamics and uncertainties. Effects of changes in esti-

mates and management judgements may relate in par-

ticular to testing for impairments, the estimated useful

lives of assets and thus the amount of depreciation to

be recognised annually, as well as the recognition of

provisions, for example with regard to CO certificates

2

or penalties.

212

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Recoverable amounts of cash-generating units and

equity-method investments

available, on external data with consideration of inter-

nally available additional information such as historical

experience of price developments and recent sale

prices. The residual values thus determined serve as a

basis for depreciation; changes in residual values lead

either to prospective adjustments of the depreciation or,

in the case of a significant decline in expected residual

values, to an impairment. If depreciation is prospec-

tively adjusted, changes in estimates of residual values

do not have a direct effect but are equally distributed

over the remaining periods of the lease contracts.

In the context of impairment tests for non-financial

assets, estimates have to be made to determine the

recoverable amounts of cash-generating units. Assump-

tions have to be made in particular with regard to future

cash inflows and outflows for the planning period and

the following periods. The estimates include assump-

tions regarding future market shares and the growth of

the respective markets, as well as regarding the prod-

ucts’ profitability. On the basis of the impairment tests

carried out in 2021, the recoverable amounts are sub-

stantially larger than the net assets of the Group’s

cash-generating units.

Collectability of receivables from financial

services

The Group regularly estimates the risk of default on

receivables from financial services. Many factors are

taken into consideration in this context including histor-

ical loss experience, the size and composition of certain

portfolios, current economic events and conditions and

the estimated fair values and adequacy of collaterals. In

addition to historical and current information on losses,

appropriate and reliable forward-looking information on

factors is also included. This information includes mac-

roeconomic factors (e.g., GDP growth, unemployment

rate, cost-performance index) and forecasts of future

economic conditions. For receivables from financial ser-

vices, these forecasts are determined using a scenario

analysis (baseline scenario, optimistic and pessimistic

scenario). Further external information, e.g., in connec-

tion with the covid-19 pandemic, which cannot be

depicted in the scenarios, is – as far as necessary –

included in the assessment through subsequent adjust-

ments. Changes to the estimation and assessment of

these factors influence the allowance for credit losses

with a resulting impact on the Group’s net profit. See

also Notes 15 and 34 for further information.

When objective evidence of impairment or impairment

reversal is present, estimates and assessments also

have to be made to determine the recoverable amount

of an equity-method investment. The determination of

the recoverable amount is based on assumptions

regarding future business developments for the deter-

mination of the expected future cash flows of that

investment. See Note 14 for the presentation of carrying

amounts and fair values of equity-method investments

in listed companies.

Recoverable amount of equipment on

operating leases

The Mercedes-Benz Group regularly reviews the factors

determining the values of its leased vehicles. In particu-

lar, it is necessary to estimate the residual values of

vehicles at the end of their leases, which constitute a

substantial part of the expected future cash flows from

leased assets. In this context, assumptions are made

regarding major influencing factors, such as the

expected number of returned vehicles, the latest remar-

keting results and future vehicle model changes. Those

assumptions are determined either by qualified esti-

mates or by publications provided by expert third par-

ties; qualified estimates are based, as far as publicly

21ꢃ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Product warranties

future profitability. It is also possible that provisions

recognised for some legal proceedings may turn out to

be insufficient once such proceedings have ended. The

Mercedes-Benz Group may also become liable for pay-

ments in legal proceedings for which no provisions were

established. Although the final resolution of any such

proceedings could have a material effect on the

Mercedes-Benz Group’s earnings and cash flows for a

particular reporting period, from the current assess-

ment, the Mercedes-Benz Group does not expect this to

result in any sustained impact on the Group’s financial

position. Further information on liability and litigation

risks and regulatory proceedings is provided in Note 31.

The recognition and measurement of provisions for

product warranties is generally connected with esti-

mates.

The Group provides various types of product warranties,

depending on the type of product and market condi-

tions. Provisions for product warranties are generally

recognised when vehicles are sold or when new war-

ranty programmes are initiated. Based on historical war-

ranty-claim experience, assumptions have to be made

on the type and extent of future warranty claims and

customer goodwill, as well as on possible recall cam-

paigns for each model series. These assessments are

based on experience of the frequency and extent of

vehicle faults and defects in the past. In addition, the

estimates also include assumptions on the amounts of

Pensions and similar obligations

The calculation of provisions for pensions and similar

obligations and the related pension cost are based on

potential repair costs per vehicle and the effects of pos- various actuarial valuations. The calculations are subject

sible time or mileage limits. The provisions are regularly

adjusted to reflect new information.

to various assumptions on matters such as current

actuarially developed probabilities (e.g., discount fac-

tors and cost-of-living increases), future fluctuations

with regard to age and period of service, and experience

with the probability of occurrence of pension payments,

annuities or lump sums. As a result of changed market

or economic conditions, the probabilities on which the

influencing factors are based may differ from current

developments. The financial effects of deviations of the

main factors are calculated with the use of sensitivity

analyses. See Note 23 for further information.

Further information on provisions for other risks is pro-

vided in Note 24.

Liability and litigation risks and regulatory

proceedings

Various legal proceedings, claims and governmental

investigations are pending against Mercedes-Benz

Group AG and its subsidiaries on a wide range of topics.

If the outcome of such legal proceedings is detrimental

to the Mercedes-Benz Group, the Group may be

required to pay substantial compensatory and punitive

damages, to undertake service actions or recall cam-

paigns, to pay fines or to carry out other costly actions.

Litigation and governmental investigations often involve

complex legal issues and are connected with a high

degree of uncertainty. Accordingly, the assessment of

whether an obligation exists on the balance sheet date

as a result of an event in the past, and whether a future

cash outflow is likely and the obligation can be reliably

estimated, largely depends on estimations by the man-

agement. The Mercedes-Benz Group regularly evaluates

the current stage of legal proceedings, also with the

involvement of external legal counsel. It is therefore

possible that the amounts of provisions for pending or

threatened proceedings will have to be adjusted due to

new expected developments. Changes in estimates and

premises can have a material effect on the Group’s

Income taxes

The calculation of income taxes of Mercedes-Benz

Group AG and its subsidiaries is based on the legislation

and regulations applicable in the various countries. Due

to their complexity, the tax items presented in the Con-

solidated Financial Statements are possibly subject to

different judgements by taxpayers on the one hand and

local tax authorities on the other. Different judgements

can occur especially in connection with the recognition

and measurement of balance sheet items as well as in

connection with the tax assessment of expenses and

income. For the calculation of deferred tax assets,

assumptions have to be made regarding future taxable

income and the time of realisation of the deferred tax

assets. In this context, the Mercedes-Benz Group takes

into consideration, among other things, the projected

earnings from business operations, the effects on earn-

ings of the reversal of taxable temporary differences,

214

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

and realisable tax strategies. As future business devel-

The Mercedes-Benz Group holds a minority interest of

ꢃ5% in Daimler Truck Holding AG as of ꢃ1 December

2021. On the basis of the contracts concluded in con-

nection with the transaction, Mercedes-Benz Group AG

no longer has a controlling influence on that company

since the entry of the spin-off and hive-down in the

Commercial Register on 9 December 2021. The shares

are included in the consolidated financial statements

using the equity method and are presented as an equity

investment not allocated to the segments in the recon-

ciliation of the reportable segments to the Group.

opments are uncertain and are sometimes beyond the

Mercedes-Benz Group’s control, the assumptions to be

made in connection with accounting for deferred tax

assets are connected with a substantial degree of

uncertainty. On each balance sheet date, the Mercedes-

Benz Group carries out impairment tests on deferred

tax assets on the basis of the planned taxable income in

future financial years. Deferred tax assets are only rec-

ognised if it is probable that future tax advantages can

be realised. Further information is provided in Note 10.

In January 2022, about 5% of the shares of Daimler

Truck Holding AG were transferred to Daimler Pension

Trust e.V. and contributed to the pension-plan assets.

Further information is provided in the Note 41.

ꢃ. Spin-off and hive-down of Daimler’s commercial

vehicle business

On ꢃ0 July 2021, the Board of Management of

Daimler AG, with the approval of the Supervisory Board,

decided on the spin-off and hive-down of substantial

parts of the former Daimler Trucks & Buses segment,

including the related financial services business

Impact of the spin-off and hive-down on reporting

In the Consolidated Statement of Financial Position,

the assets and liabilities classified as held for distribu-

tion until the spin-off and hive-down were disposed of

in the course of deconsolidation as of 9 December 2021.

As of ꢃ1 December 2021, further assets and liabilities of

Daimler’s commercial vehicle business that are to be

transferred in 2022 are presented as assets and liabili-

ties held for sale. The amounts in the statement of

financial position of the previous year are shown in line

(Daimler’s commercial vehicle business). The majority of

the shareholders of Daimler AG approved the spin-off

and hive-down agreement at the Extraordinary General

Meeting on 1 October 2021.

With the completion of the spin-off and hive-down

upon entry into the Commercial Register on 9 December with the previous method of presentation, in accord-

2021, the shareholders of Daimler AG received 65% of

ance with IFRS.

the shares in the newly founded Daimler Truck Hold-

ing AG. Since 10 December 2021, Daimler Truck Hold-

ing AG has been listed on the stock exchange as the

parent company of the independent Daimler Truck

Group.

Continuing operations are presented in the

Consolidated Statement of Income; the profit or loss

after tax of discontinued operations is shown in a sepa-

rate line, after net profit of continuing operations. The

previous year’s figures have been adjusted accordingly.

Unless otherwise indicated, the information on the

statement of income in the Notes to the Consolidated

Financial Statements relates to continuing operations.

In the internal management and reporting structure, the

former Daimler Trucks & Buses segment is presented in

the reconciliation of the reportable segments to the

Group.

215

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Eliminations of transactions between continuing and

The fair value of 65% of the shares of Daimler Truck

Holding AG (hereinafter: spin-off liabilities) has been

determined by an independent expert third party (level

ꢃ of the hierarchy level of fair values). The fair value of

the spin-off liabilities totals €16,25ꢃ million. The remain-

ing ꢃ5% of the company’s shares were measured at

discontinued operations are allocated to the discontin-

ued operations. In the case of transfers of non-current

assets, the eliminations are allocated to the selling

operations.

In the Consolidated Statement of Cash Flows, consol- €8,ꢂ52 million. The derecognised net carrying amounts

idated cash flows from continuing and discontinued

operations are presented for the reporting period and

the prior-year period.

attributable to shareholders of Mercedes-Benz

Group AG total €15,125 million. This includes assets and

liabilities previously eliminated and now to be reported

due to the deconsolidation.

Assets and liabilities disposed of in connection with

the deconsolidation (held for distribution)

The deduction of directly allocable transaction costs of

€1ꢃ2 million and the recycling of an other comprehen-

sive loss of €5ꢃ2 million (including currency translation

losses of €544 million) resulted in a gain from the spin-

off and hive-down of €9,216 million. The profit was allo-

cated based on the allocation of the fair value of

Daimler’s commercial vehicle business to the respective

parts of the segments being disposed of. The gain from

the spin-off and hive-down of assets and liabilities of

the former Daimler Trucks & Buses segment is included

in profit of discontinued operations in the amount of

€9,998 million (after transaction costs). The loss from

For substantial parts of the former Daimler Trucks &

Buses segment, its equity investments or business

operations were already legally assigned to Daimler

Truck AG before the spin-off took effect. As part of the

spin-off and hive-down, the financial services business

has also been split up. A part of the financial services

business that is included in Daimler’s commercial vehi-

cle business also was transferred before the spin-off

and hive-down. With the consent of the Board of Man-

agement and the Supervisory Board for the transaction,

these items, including most of the assets and liabilities

of the former Daimler Trucks & Buses segment and parts the transfers of assets and liabilities of the Mercedes-

of the Mercedes-Benz Mobility segment, were classified

as held for distribution from ꢃ0 July 2021 until the date

of the spin off and hive-down and were deconsolidated

upon completion of the transaction.

Benz Mobility segment of €ꢂ82 million (after transaction

costs) is included in other operating expenses from

continuing operations.

The profit attributable to the remaining ꢃ5% sharehold-

ing in Daimler Truck Holding AG amounts to €ꢃ,458 mil-

lion.

The scheduled depreciation and amortisation and the

equity-method measurement of the non-current assets

classified as held for distribution were discontinued as

of this date.

The carrying amounts of derecognised consolidated

assets and liabilities at the time of disposal are shown



in table D.08. The derecognition was presented as a

non-cash transaction.

216

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢀꢄ

Scheduled depreciation and amortisation and the

Disposed of assets and liabilities

of Daimler’s commercial vehicle business

equity-method measurement of the non-current assets

classified as held for sale since 30 July 2021 are discon-

tinued as of the date of classification.

In millions of euros

Intangible assets

1,773

8,058

3,887

15,759

1,40ꢉ

8,132

3,354

5,489

145

Property, plant and equipment

Equipment on operating leases

Receivables from financial services

Equity-method investments

Inventories

D.ꢀꢈ

Assets and liabilities held for sale

of Daimler’s commercial vehicle business

At 31 December 2021

In millions of euros

Trade receivables

Equipment on operating leases

Receivables from financial services

Cash and cash equivalents

Other financial assets

533

2,228

ꢉ2

Cash and cash equivalents

Marketable debt securities and similar investments

Other financial assets

1,070

2,8ꢉ8

179

Other assets

140

Assets held for sale

3,142

Provisions for pensions and similar obligations

Provisions for other risks

Financing liabilities

2,ꢉ3ꢉ

4,ꢉꢉ2

7,801

3,879

2,724

3,344

1,504

Financial liabilities

Other liabilities

107

ꢉ2

Trade liabilities

Liabilities held for sale

1ꢉ9

Other financial liabilities

Contract and refund liabilities

Other liabilities

Profit of discontinued operations

Profit after taxes of discontinued operations comprises

the profit/loss of the ongoing business of the discontin-

ued operations and the gain from the spin-off and hive-

down of the discontinued operations after directly

In connection with the deconsolidation, cash and cash

equivalents of €5,489 million were disposed of. This

includes strengthening the liquidity and share capital of

the Daimler Truck Group on the basis of contractual

arrangements by way of a capital increase.

related transaction costs. Table



D.10 shows the com-

position of profit of discontinued operations, after taxes.

Assets and liabilities held for sale

Profit of the ongoing business of discontinued

operations includes income and expenses in connec-

tion with the assets and liabilities of the former Daimler

Trucks & Buses segment that have been spun off or are

In particular, parts of the financial services business in

connection with the commercial vehicle business will

not be transferred to Daimler Truck Holding AG or its

subsidiaries until 2022 or subsequent years. In addition, classified as held for sale. Expenses also include costs

in some countries, investments in operating entities or

business operations of the former Daimler Trucks &

Buses segment will not be transferred to Daimler Truck

Holding AG or its subsidiaries or sold to external third

parties until 2022. These business operations are

reported as assets and liabilities held for sale from

of €132 million attributable to profit from the ongoing

business of discontinued operations in connection with

the spin-off and hive-down and expenses of €110 mil-

lion from the recycling of currency translation losses. No

amounts of other segments are included – in particular

of Mercedes-Benz Mobility – as these operations do not

constitute a separate significant business unit.

30 July 2021 onwards, provided that for each transac-

tion the criteria of IFRS 5 are met. The assets and liabili-

ties held for sale shown in the Consolidated Statement

of Financial Position at 31 December 2021 are shown in

the table



D.09.

217

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Income taxes are allocated to the taxable entity or in

D.ꢁꢀ

accordance with the applicable tax apportionment sys-

tem. Income taxes of the ongoing business of

discontinued operations essentially comprise the tax

expenses on the pre-tax earnings of the foreign compa-

nies. Due to the applicable income-tax group, the

domestic companies largely do not recognise any tax

expense or benefit. The effective tax rate is 20.7%

Profit of discontinued operations, after taxes

2021

ꢀꢁꢀꢁ

In millions of euros

Revenue¹

34,078

-31,404

10,342

-189

ꢂꢀ,ꢃꢂꢄ

-ꢂꢄ,ꢃꢀꢃ

-ꢂ6ꢀ

-ꢄꢃꢄ

ꢃꢁ

Functional costs

Other operating income

(2020: 105.7%).

Other operating expense

Gains on equity-method investments, net

Other financial income/expense, net

Earnings before interest and taxes (EBIT)

Interest income/expense

144

The profit/loss on the disposal of discontinued

operations includes the gain of €9,998 million in con-

nection with the spin-off and hive-down of the assets

and liabilities of the former Daimler Trucks & Buses seg-

ment, which is reduced by directly allocable transaction

costs of €100 million (see line other operating income in

70

-ꢂꢄ

13,041

-77

ꢃꢄꢀ

-ꢄꢂꢁ

Profit of discontinued operations,

before taxes

12,9ꢉ4

-ꢉ18

ꢂꢅꢀ

Income taxes of discontinued operations

-ꢆꢁꢆ

table



D.10) and by the recycling of an other compre-

Profit/loss of discontinued operations,

after taxes

hensive loss of €150 million. The loss from the spin-off

and hive-down of the assets and liabilities of the

Mercedes-Benz Mobility segment is reported in the

other operating expense of continuing operations.

12,34ꢉ

-ꢀꢀ

Thereof profit/loss of the ongoing business of

discontinued operations, before taxes²

2,9ꢉꢉ

-ꢉ14

ꢂꢅꢀ

Income taxes

-ꢆꢁꢆ

Thereof profit/loss of the ongoing business

of discontinued operations, after taxes

2,352

-ꢀꢀ

Thereof gain on the spin-off and hive-down,

after transaction costs

9,998

-4

-

Income taxes

Thereof profit from discontinued

operations, after taxes

9,994

-

1

Revenue includes eliminations between continuing and discontinued operations. The

revenue of the former Daimler Trucks & Buses segment amounts to €36,219 million.

Contrary to the EBIT of the former Daimler Trucks & Buses segment, the scheduled

depreciation and the equity-method measurement were no longer included in the profit/

loss of the ongoing business of discontinued operations, before taxes.

2

Consolidated Statement of Cash Flows

The Consolidated Statement of Cash Flows shows the

total from continuing and discontinued operations. The

cash flows from discontinued operations are calculated

as the difference between the consolidated cash flows

from continuing and discontinued operations and the

consolidated cash flows from continuing operations tak-

ing into account all elimination entries between contin-

uing and discontinued operations in the discontinued

operations. In this respect, the presentation does not

take into consideration the intra-Group supply of goods

and services after the spin-off and hive-down.

218

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Table



D.11 shows the reconciliation of profit/loss

before income taxes of continuing operations in the

Consolidated Statement of Income to profit before

income taxes of continuing and discontinued operations

in the Consolidated Statement of Cash Flows.

The individual cash flows are presented in table



D.12.

D.ꢁꢁ

Reconciliation to profit before income taxes from

continued and discontinued operations

2

021

ꢀꢁꢀꢁ

In millions of euros

Profit of continuing operations, before taxes

Profit of discontinued operations, before taxes

15,811

12,9ꢉ4

ꢃ,ꢇꢃꢈ

ꢂꢅꢀ

Profit before income taxes of continuing and

discontinued operations

28,775

6,ꢂꢂꢇ

D.ꢁꢂ

Cash flows of continuing and discontinued operations

2

021

ꢀꢁꢀꢁ

Cash flow of

discontinued

operations

Cash flow of

continuing

operations

Cash flow of

discontinued

operations

Cash flow of

continuing

operations

Total

cash flow

Total

cash flow

In millions of euros

Cash provided by operating activities

Cash used for / provided by investing activities

Cash used for financing activities

987

3,548

-744

23,5ꢉ2

-9,774

24,549

-ꢉ,22ꢉ

ꢄ,ꢅꢇꢄ

-ꢈꢁꢈ

-ꢃꢀꢄ

ꢀꢁ,ꢆꢆꢄ

-ꢃ,ꢈꢄꢆ

ꢀꢀ,ꢂꢂꢀ

-6,ꢆꢀꢄ

-18,315

-19,059

-ꢄꢁ,ꢀꢀ6

-ꢄꢁ,ꢈꢆꢈ

219

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

4

. Consolidated Group

Sale of interests in Mercedes-Benz Grand

Prix Ltd.

Composition of the Group

Table D.13 shows the composition of the Group. As

part of the spin-off and hive-down of Daimler’s com-

mercial vehicle business 13ꢉ companies were disposed

of in 2021.

In December 2020, the Group decided to sell shares in

Mercedes-Benz Grand Prix Ltd. In this context, the con-

tractual agreements were concluded in the fourth quar-

ter of 2021. In 2021, the entity’s assets and liabilities are

classified as held for sale. Due to its minor importance

for the financial position of the Mercedes-Benz Group,

the assets (€0.3 billion) and liabilities (€0.2 billion) held

for sale are not presented separately in the Consoli-

dated Statement of Financial Position. Due to the effec-

tiveness of parts of the contractual arrangements

entered into, the Group recognized expenses before

taxes of €9ꢉ million in the year 2021, which are included

in the Mercedes-Benz Cars & Vans segment.



The aggregate totals in the statement of financial posi-

tion of the subsidiaries, associated companies, joint

ventures and joint operations accounted for at amor-

tised cost whose business is non-active or of low vol-

ume and which are not material for the Group and the

fair presentation of its profitability, liquidity and capital

resources, and financial position would amount to

approximately 1% of the Group’s total assets; the aggre-

gate revenue and the aggregate net profit would amount With the remaining contractual arrangements taking

to approximately 1% of the Group’s revenue and net

profit.

effect in January 2022, the Group has given up control

over Mercedes-Benz Grand Prix Ltd. and will include its

remaining 33.3% equity interest in the Consolidated

Financial Statements in future periods using the equity

method. As a consequence, the Group expects to recog-

nise a gain of about €0.4 billion in the first quarter of

2022, which will be allocated to the Mercedes-Benz

Cars & Vans segment.

A detailed list of the companies included in the Consoli-

dated Financial Statements and of the equity invest-

ments of the Mercedes-Benz Group pursuant to Section

313 of the German Commercial Code (HGB) is provided

in the statement of investments. Further information is

provided in Note 42.

Structured entities

The structured entities of the Group are rental compa-

nies, asset-backed-securities (ABS) companies and spe-

cial funds. The purpose of the rental companies is pri-

marily the acquisition, renting-out and management of

assets. The ABS companies are primarily used for the

Group’s refinancing. The assets transferred to structured

entities usually result from the Group’s leasing and

sales-financing business. Those entities refinance the

purchase price by issuing securities. The special funds

are set up in particular in order to diversify the capi-

tal-investment strategy.

At the reporting date, the Group has business relation-

ships with 34 (2020: 27) controlled structured entities,

of which all are fully consolidated. In addition, the

Group has relationships with one (2020: 8) non-con-

trolled structured entities.

220

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Foundation of the fuel-cell joint venture

cellcentric

D.13

Composition of the Group

In November 2020, the Volvo Group and Daimler

Truck AG signed a binding agreement on the establish-

ment of a joint venture for fuel-cell activities. They com-

pleted the transaction on 1 March 2021. In 2020, the

Mercedes-Benz Group placed the assets and liabilities

of the Group-wide fuel-cell activities into the Daimler

Truck Fuel Cell GmbH & Co. KG, a wholly-owned subsidi-

ary of Daimler Truck AG. Upon completion of the trans-

action, the Volvo Group acquired 50% of the shares in

Daimler Truck Fuel Cell GmbH & Co. KG for €ꢉ39 million.

The two parties agreed to rename the company cellcen-

tric GmbH & Co. KG (cellcentric) with its principal place

of business in Nabern, Germany.

At ꢂꢄ December

202ꢀ

ꢀꢁꢀꢁ

Consolidated subsidiaries

Germany

28ꢀ

ꢁ8

ꢂꢅꢄ

6ꢀ

International

2ꢂꢂ

70

ꢂꢄꢇ

ꢅꢀ

Unconsolidated subsidiaries

Germany

29

ꢂꢈ

International

ꢁꢀ

ꢆꢃ

Joint operations accounted for

using proportionate consolidation

ꢀ

-

ꢀ

ꢄ

-

ꢄ

Germany

International

Joint operations accounted for

using the equity method

Upon completion of the transaction in March 2021,

profit before taxes of €1,215 million, of which €ꢉ24 mil-

lion is accounted for in particular by the remeasurement

of the interest in cellcentric that was held by Mercedes-

Benz Group at that time, and a cash inflow of €ꢉ34 mil-

lion were recognised. €ꢉ04 million is recognised in

other operating income at the Mercedes-Benz Cars &

Vans segment. The portion attributable to the former

Daimler Trucks & Buses segment of €ꢉ11 million is

reported in profit/loss of discontinued operations.

-

ꢄ

-

ꢄ

Germany

International

Joint ventures accounted for

using the equity method

9

ꢁ

ꢄꢃ

ꢆ

Germany

International

5

ꢄꢄ

Associated companies accounted for

using the equity method

ꢀꢀ

ꢁ

ꢄꢈ

ꢆ

Germany

International

7

ꢄꢂ

Joint operations, joint ventures, associated

companies and material other investments

accounted for at (amortised) cost

2ꢁ

ꢀ2

ꢂꢄ

ꢄꢂ

Germany

International

Total

ꢀ2

ꢄꢅ

ꢂ96

ꢃꢀꢅ

221

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

ꢃ. Revenue

Revenue that is expected to be recognised within three

years related to performance obligations that are unsat-

isfied (or partially unsatisfied) amounted to €ꢉ,170 mil-

Revenue disclosed in the Consolidated Statement of

Income includes revenue from contracts with customers lion at 31 December 2021 (2020: €5,ꢉ53 million). This

and other revenue not in the scope of IFRS 15.

revenue is mainly derived from long-term service and

maintenance contracts and extended warranties. It

does not include performance obligations from cus-

tomer contracts that have initial expected durations of

one year or less. Long-term performance obligations of

minor importance to the overall contract value of a bun-

dled contract are not considered in assessing the initial

duration of the bundled contract.

Revenue from contracts with customers (revenue

according to IFRS 15) is disaggregated by the two cate-

gories – type of products and services and geographical

regions – and presented in table



D.14. The category

type of products and services corresponds to the

reportable segments.

Other revenue primarily comprises revenue from the

rental and leasing business of €11,915 million (2020:

The revenue of the Mercedes-Benz Group increased due

in particular to a significantly improved sales structure

at the Mercedes-Benz Cars & Vans segment.

€

12,157 million), interest from the financial services

business at Mercedes-Benz Mobility in an amount of

5,171 million (2020: €5,240 million) and effects from

€

 

Revenue by segment D.92 and region D.96 is pre-

sented in tables in Note 35.

currency hedging. Interest from the financial services

business includes financial income on the net invest-

ment in leases of €914 million (2020: €1,518 million).

Revenue according to IFRS 15 includes revenue that was

included in contract liabilities at 31 December 2020 in

an amount of €2,434 million (2020: €2,295 million) and

revenue from performance obligations fully (or partially)

satisfied in previous periods in an amount of €339 mil-

lion (2020: €347 million).

222

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.14

Revenue

Mercedes-Benz

Mobility

Total

segments

Mercedes-Benz

Group

Cars & Vans

Others¹

In millions of euros

ꢄꢅꢄ1

Europe

ꢁꢂ,988

20,62ꢂ

ꢂ7,787

ꢁ,2ꢀ8

ꢁ,725

6,ꢁ2ꢀ

ꢀ9ꢀ

ꢁ8,7ꢀꢂ

27,0ꢁꢁ

ꢂ7,978

ꢁ,ꢂꢂ2

-ꢀ,0ꢀꢀ

-2

ꢁ7,702

27,0ꢁ2

ꢂ7,95ꢂ

ꢁ,ꢁ68

North America

Asia

-25

Other markets

Revenue according to IFRS 15

Other revenue

Total revenue

ꢀꢀꢁ

ꢀꢂ6

ꢀ06,6ꢀ6

ꢂ,0ꢂ2

ꢀꢀ,ꢁ5ꢀ

ꢀ6,ꢁ90

27,9ꢁꢀ

ꢀꢀ8,067

ꢀ9,522

ꢀꢂ7,589

-902

-2,79ꢁ

-ꢂ,696

ꢀꢀ7,ꢀ65

ꢀ6,728

ꢀꢂꢂ,89ꢂ

ꢀ09,6ꢁ8

Mercedes-Benz

Cars & Vans

Mercedes-Benz

Mobility

Total

segments

Mercedes-Benz

Group

Others¹

In millions of euros

ꢄꢅꢄꢅ

Europe

ꢆꢀ,ꢃꢁꢈ

ꢄꢈ,ꢃꢇꢅ

ꢂꢄ,ꢅꢈꢄ

ꢂ,ꢆ6ꢅ

ꢆ,ꢇꢀꢇ

ꢃ,6ꢈꢇ

ꢄꢈꢆ

ꢆꢈ,ꢆꢂ6

ꢀꢂ,ꢀꢈꢈ

ꢂꢀ,ꢁꢆꢃ

ꢂ,6ꢁꢁ

-ꢄ,ꢀꢈ6

-ꢃꢁꢇ

ꢆ6,ꢄ6ꢁ

ꢀꢀ,ꢈ6ꢅ

ꢂꢀ,ꢁꢀꢀ

ꢂ,ꢈ6ꢈ

North America

Asia

-ꢀꢂ

Other markets

Revenue according to IFRS 15

Other revenue

Total revenue

ꢄꢂꢀ

ꢄ6ꢈ

ꢇꢃ,ꢆꢆꢆ

ꢂ,ꢄꢂꢀ

ꢄꢁ,ꢇꢄꢆ

ꢄ6,ꢈꢅꢃ

ꢀꢈ,6ꢇꢇ

ꢄꢁ6,ꢂꢃꢅ

ꢄꢇ,ꢇꢄꢈ

ꢄꢀ6,ꢀꢈꢃ

-ꢄ,6ꢆꢄ

-ꢀ,ꢅꢃ6

-ꢆ,ꢆꢇꢈ

ꢄꢁꢆ,ꢈꢄꢈ

ꢄꢈ,ꢁ6ꢄ

ꢄꢀꢄ,ꢈꢈꢅ

ꢇꢅ,ꢃꢈ6

1

Others includes eliminations and the parts of Daimler’s commercial vehicle business remaining after its spin-off from the Mercedes-Benz Group, which are not presented under discon-

tinued operation. Revenue according to IFRS 15 includes €438 million (2020: €338 million) for the parts of Daimler’s commercial vehicle business remaining at the Mercedes-Benz Group.

223

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

ꢆ. Functional costs

Selling expenses

In 2021, selling expenses amounted to €9,194 million

Cost of sales

Items included in cost of sales are shown in table

(2020: €8,9ꢉꢉ million). Selling expenses consist of

direct selling costs as well as selling overhead expenses

and include personnel expenses, material costs and

other selling costs.



D.15.

D.1ꢃ

General administrative expenses

Cost of sales

General administrative expenses amounted to

€2,808 million in 2021 (2020: €2,507 million). They con-

sist of expenses which are not attributable to produc-

tion, sales or research and development functions, and

include personnel expenses, depreciation and amortisa-

tion of fixed and intangible assets, and other adminis-

trative costs.

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

Expense of goods sold

-88,9ꢁ2

-7,ꢁꢁ8

-2,009

-ꢅꢃ,ꢁꢄꢈ

-ꢅ,ꢆꢀꢂ

-ꢀ,6ꢀꢁ

Depreciation of equipment

on operating leases

Refinancing costs at

Mercedes-Benz Mobility

Research and non-capitalised development costs

Research and non-capitalised development costs were

Impairment losses on receivables

from financial services

-ꢀ88

-ꢁ,6ꢂꢀ

-ꢈ66

-ꢆ,ꢈ66

€

5,4ꢉ7 million in 2021 (2020: €4,839 million) and pri-

Other cost of sales

marily comprise personnel expenses and material costs.

-

ꢀ0ꢂ,2ꢀ8

-ꢄꢁꢄ,ꢃꢇꢀ

In all functional cost areas, there were expenses from

cost-optimisation programmes in connection with the

measures agreed with the General Works Council of the

former Daimler AG in December 2019 to reduce costs

and reduce jobs in a socially responsible manner. The

expenses were mainly attributable to the Mercedes-

Benz Cars & Vans segment €4ꢉ3 million (2020:

In the prior-year period, the cost of sales was primarily

affected by production and cost adjustments in

response to the covid-19 pandemic.

Amortisation expense of capitalised development costs

in the amount of €1,945 million (2020: €1,ꢉ9ꢉ million) is

presented in expense of goods sold.

€ꢉ05 million). Table



D.16 provides an overview of the

composition of these expenses.

The expense of goods sold includes, among other

expenses, expenses in connection with restructuring

measures. Furthermore, it also includes cost optimisa-

tion programmes to reduce fixed costs (see table

D.1ꢆ

Expenses associated with cost optimisation programmes

202ꢀ

ꢀꢁꢀꢁ



D.16).

In millions of euros

In 2020, the expense of goods sold was affected by

expenses of €871 million in connection with the adjust-

ment and realignment of capacities within the global

production network in the Mercedes-Benz Cars & Vans

segment. At the Mercedes-Benz Mobility segment, cost

of sales in the previous year was affected by increased

expenses for credit-risk provisions and the impairment

of software in the context of streamlining the IT archi-

tecture.

Cost of sales

-ꢂ25

-ꢀ2ꢀ

-ꢀꢂ9

-ꢂꢂ6

-ꢀꢂꢇ

-ꢄꢇꢆ

Selling expenses

General administrative expenses

Research and non-capitalised

development costs

-99

-ꢄꢆꢀ

-ꢇꢄꢄ

-

68ꢁ

224

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Personnel expenses and average number of

employees

Personnel expenses included in the Consolidated State- The composition of other operating income is shown in

ꢇ. Other operating income and expense

ment of Income for continuing and discontinued opera-

tions amounted to €22,888 million in 2021 (2020:



table D.18.

€

21,848 million). Personnel expenses comprise wages

and salaries in the amount of €18,528 million (2020:

17,ꢉ22 million), social-security contributions in the

D.1ꢈ

€

Other operating income

amount of €3,357 million (2020: €3,523 million) and

expenses from pension obligations in the amount of

202ꢀ

ꢀꢁꢀꢁ

In millions of euros

€1,003 million (2020: €703 million). The average num-

bers of people employed are shown in table



D.17.

Income from costs recharged

Government grants

ꢀ,ꢂꢀ0

ꢀꢁꢀ

ꢄ,ꢂꢄꢂ

ꢀꢄꢅ

Gains on sales of property,

plant and equipment

D.1ꢇ

259

ꢂꢆ

1

Average number of employees

Rental income

not relating to sales financing

76

628

ꢄꢀꢂ

-

2

02ꢀ

ꢀꢁꢀꢁ

Income from company transactions

Other miscellaneous income

ꢁ7ꢁ

6ꢇ6

ꢀ,ꢂꢅꢆ

Mercedes-Benz Cars & Vans²

ꢀ60,68ꢂ

7ꢁ,ꢀ86

ꢀ0,52ꢁ

5,ꢂ75

ꢄ6ꢃ,ꢂꢂꢅ

ꢇ6,ꢅꢇꢃ

ꢄꢄ,ꢃꢅꢄ

6,ꢆꢈ6

_D_a_i_m_l_e_r_T_r_u_c_k_s_&_B_u_s_e_s3

2,888

Mercedes-Benz Mobility

Central Functions & Services

Income from costs recharged to third parties includes

income from licenses and patents, as well as shipping

costs and other costs charged to third parties, with

related expenses primarily within functional costs.

2

50,768

ꢀꢅꢁ,ꢀꢇꢁ

1

Average number for the active workforce. Average number for quarters 1-4. The number

for the previous year has been adjusted, as amongst others trainees, temporary staff,

doctoral students and interns were also included.

Proportionally including 2,299 (2020: 2,334) employees from a proportionately consoli-

dated company.

Of the former Daimler Trucks & Buses segment; for the spun-off Daimler Truck business,

no employees are included in the fourth quarter.

2

3

In 2021 and 2020, the use of short-time-work in Ger-

many led to claims for reimbursement, which are

included in other operating income from government

grants.

Information on the total remuneration of the active

members in 2021 of the Board of Management and the

Supervisory Board of Mercedes-Benz Group AG is pro-

vided in Note 39.

In 2021, income from the fuel-cell joint venture cellcen-

tric GmbH & Co. KG (cellcentric) had a positive effect on

earnings of €ꢉ04 million at the Mercedes-Benz Cars &

Vans segment, which is presented in the income from

company transactions. See Note 4 for further informa-

tion.

In 2020, the other miscellaneous income includes

income of €154 million from the contribution of the

smart brand to the joint venture smart Automobile Co.,

Ltd., which is attributed to the Mercedes-Benz Cars &

Vans segment.

225

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

The composition of other operating expense is shown

ꢈ. Other financial income/expense, net

Table D.20 shows the components of other financial

in table



D.19.



income/expense, net.

D.1ꢉ

Other operating expense

2

02ꢀ

ꢀꢁꢀꢁ

D.ꢄꢅ

In millions of euros

Other financial income/expense, net

2

02ꢀ

ꢀꢁꢀꢁ

-ꢄꢀꢁ

Losses on sales of property,

plant and equipment

In millions of euros

-ꢀ70

-782

-ꢄꢅꢄ

-

Loss from deconsolidation

Income and expense from

compounding and effects from

changes in discount rates of

provisions for other risks

Other miscellaneous expense

-78ꢂ

-ꢆꢄꢁ

-ꢃꢇꢄ

-

ꢀ,7ꢂ5

95

Miscellaneous other financial

income/expense, net

222

ꢂꢀ7

-ꢀꢁꢂ

-ꢂꢀꢂ

The increase in other operating expense is mainly due

to the deconsolidation of assets and liabilities of the

Mercedes-Benz Mobility segment in connection with the

spin-off and hive-down of Daimler’s commercial vehicle

business. The loss from the deconsolidation of continu-

ing operations amounts to €782 million (including trans-

action costs of €32 million).

Of the increase in miscellaneous other financial income/

expense, €0.2 billion resulted primarily from the meas-

urement of equity interests at fair value.

In 2021, the miscellaneous other expense included sig-

nificantly higher expenses in connection with ongoing

governmental and legal proceedings and measures

relating to Mercedes-Benz diesel vehicles in various

regions. In addition, in the year 2021, an expense of

ꢉ. Interest income and interest expense

Table



D.21 shows the components of interest income

and interest expense.

€9ꢉ million is included which resulted from the fair-

value measurement less transaction costs of the

Mercedes-Benz Mobility disposal groups held for sale in

the year 2022 to the Daimler Truck Group. Moreover, in

the year 2021, an expense of €9ꢉ million resulted from

the effectiveness of parts of the contractual arrange-

ments to sell shares in Mercedes-Benz Grand Prix Ltd.

See Note 4 for further information.

D.ꢄ1

Interest income and interest expense

202ꢀ

ꢀꢁꢀꢁ

In millions of euros

Interest income

Net interest income on the net assets of

defined benefit pension plans

ꢁ

ꢂ

ꢀꢀꢄ

ꢀꢀꢆ

Interest and similar income

208

2

ꢀ2

Interest expense

Net interest expense on the net obligation

from defined benefit pension plans

-5ꢁ

-ꢅꢈ

-ꢀꢈꢄ

-ꢂꢃꢅ

Interest and similar expense

-ꢂ75

-

ꢁ29

22ꢉ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

1ꢅ. Income taxes



Table D.24 shows a reconciliation of expected

income-tax expense to actual income-tax expense

determined using the unchanged applicable German

combined statutory tax rate of 29.825%.

Table D.22 shows the components of income tax

expense.



D.ꢄꢄ

D.ꢄ4

Components of income tax expense

Reconciliation of expected income-tax expense

to actual income-tax expense

2

02ꢀ

ꢀꢁꢀꢁ

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

Current taxes

Deferred taxes

Total

-ꢂ,28ꢁ

-ꢀ,ꢁ77

-ꢁ,76ꢀ

-ꢀ,ꢁꢇꢄ

ꢄ6ꢃ

Expected income-tax expense

Foreign tax-rate differential

Trade tax-rate differential

Tax-law changes

-ꢁ,7ꢀ6

ꢂ5ꢂ

ꢁꢁ

-ꢄ,ꢈꢈꢈ

ꢀ6ꢄ

ꢂꢈ

-ꢄ,ꢇꢀ6

ꢀ26

ꢂꢈ

The current tax expense includes tax benefits recog-

nised for prior periods at German and foreign compa-

nies of €28ꢉ million (2020: €ꢉ9 million).

Change of unrecognised deferred tax assets

including write-down of deferred tax assets

-ꢂ07

208

-ꢀꢀꢄ

-ꢂꢁꢃ

Tax-free income and non-deductible expenses

Tax expense/income due to applicable income

tax group with discontinued operations

-79

-ꢂ90

ꢀꢀꢀ

-ꢄꢅꢁ

The composition of deferred taxes is shown in table

Other



D.23.

Actual income-tax expense

-ꢁ,76ꢀ

-ꢄ,ꢇꢀ6

D.ꢄ3

Composition of deferred taxes

The Group did not recognise the total amount of

2

02ꢀ

ꢀꢁꢀꢁ

ꢆꢄꢇ

deferred tax assets in 2021 and 2020. In addition, tax-

loss carryforwards expired in 2021 that were considered

realisable in the past. This resulted in tax expenses and

the non-recognition of deferred tax income. The respec-

tive amounts are included in the line item change of

unrecognised deferred tax assets including write-down

of deferred tax assets.

In millions of euros

Deferred taxes due to temporary differences

-ꢂ97

Deferred taxes due to tax-loss carryforwards

and tax credits

-ꢀ,080

-ꢀꢃꢆ

ꢄ6ꢃ

-

ꢀ,ꢁ77

Tax-free income and non-deductible expenses include

all reconciling items of foreign and German companies

relating to tax-free income and non-deductible

expenses, e.g., tax-free results of the equity-method

investments. In 2021, the line item also includes the

effect from the non-deductible loss on the spin-off and

hive-down of assets and liabilities of the Mercedes-

Benz Mobility segment.

For German companies, in 2021 and 2020, deferred

taxes were calculated using a federal corporate income

tax rate of 15%, a solidarity tax surcharge of 5.5% on

each year’s federal corporate income taxes, and a trade

tax rate of 14%. In total, the tax rate applied for the cal-

culation of German deferred taxes in both years

amounted to 29.825%. For non-German companies, the

deferred taxes at period-end were calculated using the

tax rates of the respective countries.

227

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

The actual income-tax expense also includes tax

In respect of each type of temporary difference and in

respect of each type of unutilised tax-loss carryfor-

wards and unutilised tax credits, the deferred tax assets

and liabilities before offset are summarised in table

expenses/income in connection with German compa-

nies that were reported as discontinued operations in

the Consolidated Statement of Income. Due to the Ger-

man tax group, the tax expense/income on these com-

panies’ profit or loss was largely allocated to continuing

operations. The effects are summarised in line item tax

expense/income due to applicable income-tax group

with discontinued operations. Effects from the non-

recognition of deferred tax assets at these companies of

minus €398 million are included in the line item change

of unrecognised deferred tax assets including write-

down of deferred tax assets.



D.26.

D.ꢄꢆ

Split of deferred tax assets and liabilities before offset

At ꢂꢄ December

202ꢀ

ꢀꢁꢀꢁ

In millions of euros

Intangible assets

58

ꢂꢇ6

ꢀꢃ6

The other items include, among other things, effects

from withholding taxes on dividends, patents and

licenses.

Property, plant and equipment

Equipment on operating leases

Inventories

ꢀ8ꢁ

2,ꢂ29

ꢀ,ꢀ2ꢂ

ꢂ6ꢀ

ꢀ,ꢁꢀꢁ

ꢇꢆꢆ

Receivables from financial services

ꢆꢈꢃ

Deferred tax assets and deferred tax liabilities are offset

if the deferred tax assets and liabilities relate to income

taxes levied by the same taxation authority and if there

is the right to set off current tax assets against current

tax liabilities. In the presentation of deferred tax assets

and liabilities in the Consolidated Statement of Finan-

cial Position, no difference is made between current

and non-current. In the Consolidated Statement of

Financial Position, deferred tax assets and liabilities are

Miscellaneous assets, mainly other

financial assets

ꢁ,ꢂ56

662

ꢃ,ꢂꢆꢀ

ꢀ,6ꢀꢇ

Tax-loss carryforwards and

unused tax credits

Provisions for pensions and similar

obligations

2ꢂ7

ꢀ,ꢀ6ꢀ

2,5ꢁꢀ

ꢂ57

ꢃꢄꢁ

ꢄ,ꢅ6ꢆ

ꢀ,ꢇꢆꢇ

ꢈꢇꢅ

Other provisions

Liabilities

Deferred income

Miscellaneous liabilities

presented as shown in table



D.25.

-

ꢀꢁ

ꢀ

ꢂ,ꢂ69

-26ꢂ

-ꢁꢀ

ꢄꢅ,ꢀꢁꢂ

-ꢄ,ꢇꢇꢅ

-ꢅꢅꢁ

Unrecognised deferred tax assets

thereof on temporary differences

D.ꢄꢃ

Deferred tax assets and liabilities

thereof on tax-loss carryforwards

and tax credits

-222

ꢀꢂ,ꢀ06

-ꢂ,776

-8ꢁ

-ꢄ,ꢄꢄꢅ

ꢄ6,ꢀꢁꢃ

-ꢂ,ꢇꢁ6

-ꢄꢀꢁ

At ꢂꢄ December

2

02ꢀ

ꢀꢁꢀꢁ

Deferred tax assets, gross

Development costs

In millions of euros

Other intangible assets

Property, plant and equipment

Equipment on operating leases

Inventories

Deferred tax assets

ꢂ,ꢁꢂꢁ

-ꢁ,ꢁ88

-ꢀ,05ꢁ

6,ꢀꢃꢇ

-ꢂ,6ꢆꢇ

ꢀ,6ꢄꢁ

-2,252

-ꢁ,092

-28

-ꢀ,666

-ꢆ,ꢃꢈꢆ

-66

Deferred tax liabilities

Deferred tax assets/Deferred tax liabilities, net

Receivables from financial services

Miscellaneous assets

-ꢀ,ꢂ27

-670

-ꢅꢄꢁ

-ꢆꢀ6

Provisions for pensions and

similar obligations

-ꢀ,ꢂ85

-2ꢀ5

-ꢆ6ꢈ

-ꢀꢄꢅ

Other provisions

Miscellaneous liabilities

Deferred tax liabilities, gross

-ꢂꢂꢀ

-ꢂꢆꢀ

-ꢀꢁ,ꢀ60

-ꢄꢂ,ꢃꢇꢃ

Deferred tax assets/Deferred tax liabilities,

net

-ꢀ,05ꢁ

ꢀ,6ꢄꢁ

228

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

The development of deferred tax assets and deferred

D.ꢄꢈ

tax liabilities, net, is shown in table



D.27.

Tax expense in equity

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

D.ꢄꢇ

Changes in deferred tax assets/deferred tax liabilities, net

Income tax expense of continuing operations in

the Consolidated Statement of Income

2

02ꢀ

ꢀꢁꢀꢁ

-ꢁ,76ꢀ

-6ꢀ8

-ꢄ,ꢇꢀ6

-ꢆꢁꢆ

In millions of euros

Income tax expense of discontinued operations

in the Consolidated Statement of Income

Income tax expense/benefit recognised in other

reserves

Deferred tax assets, net as of 1 January

2,6ꢀ0

-ꢀ,ꢁ77

-ꢀ

ꢄ,ꢅ6ꢅ

ꢄ6ꢃ

ꢆꢄ

-778

ꢆꢃꢆ

Deferred tax expense/benefit of continuing

operations in the Consolidated Statement of

Income

-

6,ꢀ57

-ꢄ,ꢅꢈ6

Deferred tax expense/benefit of discontinued

operations in the Consolidated Statement of

Income

In the Consolidated Statement of Financial Position,

unrecognised deferred tax assets decreased by

Change in deferred tax assets/liabilities on

equity instruments/debt instruments included

in other comprehensive income/loss

€

1,735 million compared to 31 December 2020, although

-ꢀ8

-ꢆꢀ

unrecognised deferred tax assets through profit and

loss increased by €307 million. This decrease mainly

results from changes in the consolidated group. Fur-

thermore, deferred tax assets unrecognised in prior

periods of €114 million were recognised in other com-

prehensive income/loss in 2021. Other changes with no

impact on profit and loss resulted from, among other

things, adjustments to tax-loss carryforwards from pre-

vious years, mainly due to expiration, and also from cur-

rency translation.

Change in deferred tax assets/liabilities on

derivative financial instruments included in

other comprehensive income/loss

ꢂ62

-ꢂꢆꢃ

Change in deferred tax assets/liabilities on

actuarial gains/losses from defined benefit pen-

sion plans included in other comprehensive

income/loss

-ꢀ,ꢀ22

ꢅꢆꢄ

Disposed of deferred tax assets/liabilities of

Daimler’s commercial vehicle business

-ꢀ,2ꢁꢂ

-ꢀ65

-

Other changes¹

ꢅꢀ

Deferred tax assets/Deferred tax liabilities, net

as of 31 December

-ꢀ,05ꢁ

ꢀ,6ꢄꢁ

At 31 December 2021, unrecognised deferred tax assets

in the Consolidated Statement of Financial Position

relate, among other things, to corporate income-tax-loss

carryforwards (€108 million). €4 million of unrecognised

deferred tax assets relates to corporate income-tax-loss

carryforwards which expire in 2022, €19 million relates

to tax-loss carryforwards which expire at various dates

from 2023 through 202ꢉ, €1 million relates to tax-loss

carryforwards which expire at various dates from 2027

through 2041, and €84 million relates to tax-loss carry-

forwards which can be carried forward indefinitely. A

large proportion of the unrecognised deferred tax

assets relates to tax loss carryforwards for state and

local taxes at the US companies as well as to temporary

differences. The Mercedes-Benz Group believes that it

is more likely than not that it will be unable to utilise

those deferred tax assets or cannot reliably document

that sufficient future taxable income will be available

against which the deductible temporary differences,

tax-loss carryforwards and tax credits can be offset.

1

The other changes primarily relate to further changes in the consolidated group and the

effects of currency translation.

Taking into account the items recognised in other com-

prehensive income/loss (including items from equi-

ty-method investments), the expense for income taxes

is comprised as shown in table



D.28.

229

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

The Group had tax losses at the German tax group in

The Group has various unresolved issues concerning

2

020 and at several subsidiaries in several countries in

021 and prior years. After offsetting the deferred tax

open income-tax years with the tax authorities in a

number of jurisdictions. The Mercedes-Benz Group

believes that it has recognised adequate liabilities for

any future income taxes that may be owed for all open

tax years. Nevertheless, it cannot be ruled out that tax

payments might exceed the liabilities recognised in the

financial statements.

assets with deferred tax liabilities, the deferred tax

assets recognised for those entities amounted to

€

more likely than not that future taxable income will be

sufficient to allow utilisation of these deferred tax

assets. The Group’s current estimate of the amount of

deferred tax assets that is considered realisable may

change in the future, necessitating higher or lower

unrecognised deferred tax assets.

23 million. The Mercedes-Benz Group believes it is

As a result of future adjudications or changes in the

opinions of the fiscal authorities, it cannot be ruled out

that the Mercedes-Benz Group might receive tax

refunds for previous years. In particular, from 2012 to

2021, Mercedes-Benz Group AG incurred currency

exchange rate-related losses from the financing of

Group companies based abroad totalling €2.1 billion,

which were compensated by corresponding hedging

instruments. For the years until 2021, the German tax

authorities consider that exchange rate-related losses

from the financing of Group companies are generally not

to be recognised, while the compensating profits from

the hedging activities remain taxable. In 2021, the Ger-

man Modernisation of Corporate Income Tax Act stipu-

lated that such exchange rate losses are generally

deductible. However, this will only apply from 2022. For

this reason, the Company has in the meantime substan-

tiated in detail the objections already lodged against

the tax assessment notices and will take decisive action

against the legal opinion of the tax authorities that has

been held so far.

From the current perspective, the retained earnings of

non-German subsidiaries are largely intended to be

reinvested in those operations. The Group did not rec-

ognise deferred tax liabilities on retained earnings

which are intended to be reinvested of non-German

subsidiaries of €24,892 million (2020: €25,122 million).

If those earnings were paid out as dividends, an amount

of 5% would be taxed under German taxation rules and,

if applicable, with non-German withholding tax. Addi-

tionally, income-tax consequences might arise if the

dividends first have to be distributed by a non-German

subsidiary to a non-German holding company. Normally,

the distribution would lead to an additional income-tax

expense. It is not practicable to estimate the amount of

taxable temporary differences for these undistributed

foreign earnings.

230

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

11. Intangible assets

Intangible assets developed as shown in table



D.29.

At 31 December 2021, goodwill of €389 million (2020:

438 million) relates to the Mercedes-Benz Mobility

€

segment and goodwill of €375 million (2020: €19ꢉ mil-

lion) relates to the Mercedes-Benz Cars & Vans segment.

Non-amortisable intangible assets primarily relate to

goodwill and development costs for projects which

have not yet been completed (carrying amount at

31 December 2021: €4,201 million; 2020: €4,84ꢉ million).

In addition, other intangible assets with a carrying

amount of €135 million (2020: €273 million) are not

amortisable. These non-amortisable intangible assets

are distribution rights in the vehicle segments with

indefinite useful lives. The Group plans to continue to

use these assets unchanged.

231

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢄꢉ

Intangible assets

Other

intangible

assets

Development

costs (internally

generated)^ꢀ

Goodwill

acquired)

(

(acquired)

Total

In millions of euros

Acquisition/manufacturing costs

Balance at 1 January ꢄꢅꢄꢅ

Additions due to business combinations

Other additions

ꢄ,ꢆꢇꢂ

ꢆꢂ

ꢀꢁ,ꢄꢃꢆ

-

ꢆ,ꢈ6ꢃ

-

ꢀ6,ꢆꢄꢀ

ꢆꢂ

ꢆ

ꢀ,ꢃꢄꢃ

-

ꢃꢀꢈ

-

ꢂ,ꢁꢆ6

-

Reclassifications

-

Disposals

-

-ꢇꢅꢇ

-ꢄꢆ

-ꢂꢀꢂ

-ꢇꢄ

ꢆ,ꢅꢈꢅ

ꢂ55

-

-ꢄ,ꢂꢄꢀ

-ꢄ6ꢄ

ꢀꢅ,ꢁꢀꢅ

2,90ꢁ

-

Other changes¹

-ꢃ6

ꢄ,ꢆꢅꢆ

ꢀ7ꢀ

-

Balance at 31 December ꢄꢅꢄꢅ

Additions

ꢀꢄ,666

2,ꢂ78

-

Reclassifications

Reclassification to assets of the Daimler commercial vehicle

business held for distribution or sale

-787

-

-2,770

-2,ꢀꢀ8

-ꢀ

-ꢀ,009

-ꢂꢁ7

-2

-ꢁ,566

-2,ꢁ65

2ꢂ

Other disposals

Other changes¹

26

Balance at 31 December ꢄꢅꢄ1

89ꢁ

ꢀ9,ꢀ55

ꢂ,875

2ꢂ,92ꢁ

Depreciation/impairment

Balance at 1 January ꢄꢅꢄꢅ

Additions

ꢀꢈ6

-

ꢈ,6ꢀꢇ

ꢄ,ꢇꢀꢃ

-

ꢀ,ꢃꢀꢇ

6ꢂꢇ

-

ꢄꢁ,ꢆꢂꢆ

ꢀ,ꢃ6ꢆ

-

Reclassifications

-

Disposals

-

-ꢇꢅꢂ

-ꢄꢀ

-ꢀꢅꢅ

-ꢈꢂ

-ꢄ,ꢀꢈꢄ

-ꢇꢅ

Other changes¹

-ꢄꢂ

ꢀ6ꢂ

-

Balance at 31 December ꢄꢅꢄꢅ

Additions

ꢅ,ꢃꢃꢇ

2,07ꢂ

-

ꢀ,ꢅꢁꢈ

ꢁ90

-

ꢄꢄ,6ꢀꢇ

2,56ꢂ

-

Reclassifications

-

Reclassification to assets of the Daimler commercial vehicle

business held for distribution or sale

-ꢀꢂ9

-

-2,066

-2,ꢀ06

-2

-682

-278

-6

-2,887

-2,ꢂ8ꢁ

-2

Other disposals

Other changes¹

6

Balance at 31 December ꢄꢅꢄ1

ꢀꢂ0

6,ꢁ58

2,ꢂꢂꢀ

8,9ꢀ9

Carrying amount at 31 December ꢄꢅꢄꢅ

Carrying amount at 31 December ꢄꢅꢄ1

ꢄ,ꢀꢀꢄ

ꢄꢂ,ꢄꢁꢈ

ꢀ,ꢁꢈꢄ

ꢄ6,ꢂꢇꢇ

76ꢁ

ꢀ2,697

ꢀ,5ꢁꢁ

ꢀ5,005

1

2

Primarily changes from currency translation.

Including capitalised borrowing costs on development costs of €45 million (2020: €43 million). Amortisation amounted to €10 million (2020: €5 million).

232

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

The goodwill reported in the line items “reclassification

1ꢄ. Property, plant and equipment

to assets held for distribution or sale of the Daimler

commercial vehicle business” comprises the goodwill of

the cash-generating units Daimler Trucks and Daimler

Buses. In addition, parts of the goodwill of the

cash-generating unit Mercedes-Benz Mobility are allo-

cated, which were determined on the basis of relative

values of the disposed of and remaining business oper-

ations. Before classification as held for sale or distribu-

tion, all assets and liabilities were measured in accord-

ance with the applicable IFRS. This also included an

impairment test of the cash-generating units Daimler

Trucks and Daimler Buses, which did not result in any

need for impairment.

Property, plant and equipment as shown in the Consoli-

dated Statement of Financial Position with a carrying

amount of €27,859 million (31 December 2020:

€35,24ꢉ million) also includes right-of-use assets, that

the group has received as lessee.

Property, plant and equipment, excluding right-of-use

assets, developed as shown in table



D.31.

In 2021, government grants of € ꢉ9 million (2020: €

17 million) were deducted from the carrying amount of

property, plant and equipment.

Table



D.30 shows the line items of the Consolidated

Statement of Income in which total amortisation

expense for intangible assets is included.

D.3ꢅ

Amortisation expense for intangible assets

1

in the Consolidated Statement of Income

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

Cost of sales

2,ꢁ02

5ꢂ

ꢀ,ꢂ6ꢅ

ꢃꢃ

Selling expenses

General administrative expenses

75

ꢄꢄꢁ

Research and non-capitalised

development costs

ꢂꢂ

ꢂꢄ

2

,56ꢂ

ꢀ,ꢃ6ꢆ

1

Includes the amortisation of intangible assets of the Daimler’s commercial vehicle busi-

ness until 30 July 2021 and 31 December 2020 respectively.

233

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.31

Property, plant and equipment (excluding right-of-use assets)

Land, leasehold

improvements and

buildings including

buildings on land

owned by others

Other

equipment,

factory and

office

Advance

payments

and

construction

in progress

Technical

equipment

and

machinery

equipment

Total

In millions of euros

Acquisition or manufacturing costs

Balance at 1 January ꢄꢅꢄꢅ

Additions due to business acquisitions

Other additions

ꢄꢅ,ꢇꢆꢁ

ꢄꢃ

ꢀꢅ,6ꢅꢂ

ꢂꢈ

ꢂꢂ,ꢁꢈꢀ

-

ꢃ,ꢁꢈꢂ

ꢃ

ꢅꢃ,ꢈ6ꢅ

ꢃꢈ

ꢃꢂ6

ꢄ,ꢁꢅꢁ

ꢄ,ꢄ6ꢁ

-ꢄ,ꢅꢈꢃ

-ꢆꢀꢂ

ꢄ,ꢇꢁꢂ

ꢅꢃꢃ

ꢀ,ꢁꢀꢀ

-ꢀ,ꢈꢈꢆ

-ꢀꢃꢀ

ꢃ,ꢃꢆꢄ

ꢀꢀ

Reclassifications

ꢈꢅꢄ

Disposals

-ꢄꢄ6

-ꢄꢅꢅ

ꢄꢇ,ꢇ6ꢅ

ꢀ6ꢁ

-ꢅ6ꢁ

-6ꢇꢈ

ꢂꢆ,ꢀꢈꢂ

ꢀ,ꢁ2ꢁ

668

-ꢂ,ꢄꢁꢂ

-ꢄ,ꢆꢈ6

ꢅ6,ꢅꢁꢇ

ꢁ,0ꢂ0

-

Other changes¹

-ꢄ6ꢅ

Balance at 31 December ꢄꢅꢄꢅ

Additions

ꢀꢅ,66ꢀ

6ꢁ0

ꢂ,ꢇꢁ6

ꢀ,802

-2,ꢁ62

Reclassifications

5ꢀ7

ꢀ,277

Reclassification to assets of the Daimler commercial

vehicle business held for distribution or sale

-ꢁ,82ꢀ

-282

-6,70ꢁ

-8ꢂ6

-6,9ꢂꢁ

-ꢀ,ꢂ9ꢁ

ꢂ57

-627

-252

-ꢀ9,086

-2,76ꢁ

-ꢀ77

Disposals

Other changes¹

-ꢀꢁꢀ

-22ꢀ

-ꢀ72

Balance at 31 December ꢄꢅꢄ1

ꢀ5,ꢁ05

22,8ꢀ8

28,ꢂ9ꢁ

2,ꢀ95

68,8ꢀ2

Depreciation/impairment

Balance at 1 January ꢄꢅꢄꢅ

Additions deprecation

Additions from impairment losses²

Reclassifications

ꢇ,ꢁꢅꢄ

ꢆꢃꢅ

ꢄꢆꢄ

-

ꢄꢅ,ꢃꢈꢁ

ꢄ,ꢅꢅꢃ

ꢄꢁꢂ

ꢀꢃ,ꢀꢁꢅ

ꢀ,ꢅꢂꢅ

-

ꢇ

ꢃꢀ,ꢅꢃꢇ

ꢃ,ꢄꢇꢁ

ꢆꢃꢅ

ꢀꢄꢆ

-

Disposals

-6ꢆ

ꢂꢄ

-ꢄ,ꢈꢅꢇ

-ꢄꢅꢄ

ꢄꢅ,ꢃꢅꢅ

ꢀ,657

ꢂ

-ꢈ6ꢀ

-ꢆ6ꢇ

ꢀ6,ꢅꢄꢃ

ꢀ,6ꢂ8

-ꢂ

-

-ꢀ,6ꢄꢃ

-6ꢄꢇ

ꢃꢃ,ꢀꢈꢂ

ꢂ,7ꢀ5

-

Other changes¹

-

Balance at 31 December ꢄꢅꢄꢅ

Additions

ꢇ,6ꢆꢈ

ꢁꢀ8

-

ꢀꢀꢂ

2

Reclassifications

-

Reclassification to assets of the Daimler commercial

vehicle business held for distribution or sale

-2,ꢁꢀ5

-ꢀ79

-ꢁ,869

-767

-5,ꢂ75

-ꢀ,22ꢂ

275

-ꢀ0

-

-ꢀ2,669

-2,ꢀ69

-ꢁ86

Disposals

Other changes¹

-29ꢀ

-255

-2ꢀ5

-

Balance at 31 December ꢄꢅꢄ1

7,ꢀ80

ꢀꢁ,ꢂ57

22,ꢀ27

ꢁꢂ,66ꢁ

Carrying amount at 31 December ꢄꢅꢄꢅ

Carrying amount at 31 December ꢄꢅꢄ1

ꢄꢁ,ꢂꢀꢄ

ꢄꢁ,ꢁꢈꢆ

ꢈ,ꢆꢃꢅ

ꢂ,6ꢅꢂ

ꢂꢄ,ꢃꢂ6

8,225

8,ꢁ6ꢀ

6,267

2,ꢀ95

25,ꢀꢁ8

1

Primarily changes from currency translation. In 2021, there were opposing effects from the deconsolidation of property, plant and equipment at the segment Mercedes-Benz Cars & Vans,

which was impaired in 2020. They amounted to approximately €1.0 billion before depreciation and impairment.

2

Comprises impairments in the amount of €0.5 billion connected with the adjustment and realignment of capacities within the global production network at the Mercedes-Benz Cars &

Vans segment.

234

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Table



D.32 shows the composition of the right-of-use

D.34

assets.

Expenses related to lessee accounting

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

D.3ꢄ

Right-of-use assets

Interest expense from

lease transactions

ꢂꢄ December

5ꢀ

ꢂꢀ

ꢀꢁ

6ꢄ

ꢂꢀ

ꢄꢀ

ꢆꢄ

2

02ꢀ

ꢀꢁꢀꢁ

Expenses from

short-term leases

In millions of euros

Expenses from leases of

low-value assets

Land, leasehold improvements and

buildings

Expenses from variable

lease payments

2,ꢂ20

ꢂ56

ꢂ,ꢆꢆꢇ

ꢄꢇꢂ

ꢀ5

Technical equipment and machinery

Other equipment, factory and

office equipment

ꢂ5

6ꢅ

2

,7ꢀꢀ

ꢂ,ꢈꢄꢁ

D.3ꢃ

Cash outflows related to

lessee accounting

2

02ꢀ

ꢀꢁꢀꢁ

The tables

disclosures related to lessee accounting.

  

D.33, D.34 and D.35 show additional

In millions of euros

Total cash outflow

for lease contracts

1

868

608

ꢇꢆꢃ

ꢃ6ꢀ

D.33

Future cash outflows that are not

reflected in the lease liabilities

Additions and depreciations for right-of-use assets

2

02ꢀ

ꢀꢁꢀꢁ¹

6ꢃꢅ

1

The spin-off of Daimler’s commercial vehicle business is included in calculation of the

amounts in 2020.

In millions of euros

Additions to right-of-use assets

9ꢀ8

Further information on lessee accounting is provided in

Notes 1, 25 and 34.

Depreciation for

Land, leasehold improvements and buildings

Technical equipment and machinery

57ꢂ

ꢀꢀ2

66ꢇ

ꢂꢅ

Other equipment, factory and office equip-

ment

ꢂ0

ꢆꢂ

7

ꢀ5

ꢈꢃꢁ

1

The spin-off of Daimler’s commercial vehicle business is included in calculation of the

amounts.

235

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

13. Equipment on operating leases

At 31 December 2021, equipment on operating leases

with a carrying amount of €12,915 million was pledged

as security for liabilities from ABS transactions related

to a securitisation transaction of future lease payments

on leased vehicles (31 December 2020: €10,737 million)

The development of equipment on operating leases is

shown in table



D.36.

(see also Note 25).

D.3ꢆ

Equipment on operating leases

Leasing payments

In millions of euros

Non-cancellable future lease payments to the

Mercedes-Benz Group for equipment on operating

leases are due as presented in table



D.37.

Acquisition/manufacturing costs

Balance at 1 January ꢄꢅꢄꢅ

Additions due to business acquisitions

Additions

66,ꢂꢈꢀ

-

D.3ꢇ

ꢀꢄ,ꢇꢇꢅ

-

Maturity of undiscounted lease payments for

equipment on operating leases

Reclassifications

Disposals

-ꢀꢂ,ꢁꢀꢆ

-ꢀ,ꢈꢆꢀ

6ꢀ,6ꢁꢆ

-

At ꢂꢄ December

Other changes¹

2

02ꢀ

ꢀꢁꢀꢁ¹

Balance at 31 December ꢄꢅꢄꢅ

Additions due to business acquisitions

Additions

In millions of euros

20,265

-

Maturing

Reclassifications

Within one year

8,092

5,ꢂꢁꢂ

2,962

ꢀ,ꢀ67

2ꢁ6

ꢅ,ꢄꢂꢆ

ꢃ,6ꢃꢆ

ꢂ,ꢄ6ꢂ

ꢄ,ꢀꢁꢈ

ꢀꢇꢄ

Reclassification to assets of the Daimler commercial vehicle

business held for distribution or sale

Between one and two years

Between two and three years

Between three and four years

Between four and five years

Later than five years

-6,7ꢁ8

-2ꢀ,86ꢁ

ꢂ,ꢂ50

Disposals

Other changes³

Balance at 31 December ꢄꢅꢄ1

57,607

89

6ꢇ

Total minimum lease payments

ꢀ7,899

ꢄꢅ,ꢃꢄꢅ

Depreciation/impairment

Balance at 1 January ꢄꢅꢄꢅ

Additions²

1

The spin-off of Daimler’s commercial vehicle business is included in calculation of the

amounts.

ꢄꢆ,ꢅꢇꢁ

ꢇ,ꢄꢅꢄ

-

Reclassifications

Disposals

-ꢅ,ꢂꢀꢂ

-6ꢇ6

ꢄꢃ,ꢁꢃꢀ

8,07ꢂ

-

Other changes¹

Balance at 31 December ꢄꢅꢄꢅ

Additions

Reclassifications

Reclassification to assets of the Daimler commercial vehicle

business held for distribution or sale

-2,ꢁ79

-8,0ꢁ0

5ꢂ0

Disposals

Other changes¹

Balance at 31 December ꢄꢅꢄ1

ꢀꢂ,ꢀꢂ6

Carrying amount at 31 December ꢄꢅꢄꢅ

Carrying amount at 31 December ꢄꢅꢄ1

ꢆꢈ,ꢃꢃꢀ

ꢁꢁ,ꢁ7ꢀ

1

Primarily changes from currency translation.

2

Includes impairments of €0.3 billion arising primarily in connection with the covid-19

crises.

3

Primarily comprises changes from currency translation of €2.5 billion and leased right-

of-use assets from recognised head leases with the Daimler Truck Group of €1.1 billion.

23ꢉ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

14. Equity-method investments



Table D.39 presents key figures on interests in associ-

ated companies accounted for using the equity method

in the Group’s Consolidated Financial Statements.

Table D.38 shows the carrying amounts and profits/



losses from equity-method investments.

Table



D.40 presents key figures on interests in joint

ventures accounted for using the equity method in the

Group’s Consolidated Financial Statements.

D.3ꢈ

Summarised carrying amounts and profits/losses from equity-method investments

Associated

companies

Joint

ventures

Joint

operations

Total

In millions of euros

At 31 December ꢄꢅꢄ1

Equity investment¹

Equity profit/loss¹

At 31 December ꢄꢅꢄꢅ

Equity investment¹

Equity profit/loss¹

ꢀ2,652

ꢀ,5ꢂ9

9ꢂ6

-

ꢀꢂ,588

ꢀ,ꢂ52

-ꢀ87

ꢂ,ꢈꢃꢈ

ꢄ,ꢁꢈꢈ

ꢄ,ꢆꢄꢇ

-ꢂꢂꢁ

ꢄꢂ

ꢃ,ꢄꢅꢇ

ꢈꢆꢈ

-

1

Including investor-level adjustments.

D.3ꢉ

Key figures on interests in associated companies accounted for using the equity method

THBV

(HERE)

Daimler Truck³

BBAC

BAIC Motor^ꢁ

Others

Total

In millions of euros

At 31 December ꢄꢅꢄ1

Equity interest (in %)

Stock-market price¹

ꢂ5.0

9,ꢂ0ꢀ

8,762

-ꢀ

ꢁ9.0

-

9.6

290

ꢂ00

-92

8

29.7

-

Equity investment²

2,75ꢂ

ꢀ,55ꢂ

ꢀ,5ꢂꢂ

ꢂ2ꢁ

-ꢂ2

-

5ꢀꢂ

ꢀꢀꢀ

ꢀ2,652

ꢀ,5ꢂ9

Equity profit/loss²

Dividend to Mercedes-Benz Group

At 31 December ꢄꢅꢄꢅ

Equity interest (in %)

Stock-market price¹

-

ꢆꢇ.ꢁ

-

ꢇ.6

ꢀꢂꢄ

ꢂꢂꢄ

-ꢂꢁꢂ

ꢄ6

ꢀꢇ.ꢈ

-

Equity investment²

ꢀ,ꢆꢂꢄ

ꢄ,ꢂꢂꢃ

ꢄ,ꢈꢄꢅ

ꢂ6ꢄ

6ꢄ

-

6ꢂꢆ

-ꢄ6

ꢂ,ꢈꢃꢈ

ꢄ,ꢁꢈꢈ

Equity profit/loss²

Dividend to Mercedes-Benz Group

1

2

3

Proportionate stock-market prices.

Including investor-level adjustments.

Figures for the equity method profit/loss of Daimler Truck are best possible estimates for the period of 10 December to 31 December 2021 and are based on the reported Q1–3 figures for

Daimler Truck including provisional investor-level adjustments.

4

Proportionate earnings of BAIC Motor Corporation Ltd. (BAIC Motor) are included in the Mercedes-Benz Group’s Consolidated Financial Statements with a three-month time lag.

237

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.4ꢅ

Key figures on interests in joint ventures accounted for using the equity method

YOUR NOW²

Others

Total

In millions of euros

At 31 December ꢄꢅꢄ1

Equity interest (in %)

Stock-market price

50.0

-

Equity investment¹

ꢂ8ꢂ

-ꢀ66

-

55ꢂ

-2ꢀ

9ꢂ6

Equity profit/loss¹

-ꢀ87

Dividend to Mercedes-Benz Group

At 31 December ꢄꢅꢄꢅ

Equity interest (in %)

Stock-market price

ꢃꢁ.ꢁ

-

Equity investment¹

ꢃꢆꢆ

-ꢂꢄꢈ

-

ꢅꢈꢃ

-ꢄꢂ

ꢄ,ꢆꢄꢇ

-ꢂꢂꢁ

Equity profit/loss¹

Dividend to Mercedes-Benz Group

1

2

Including investor-level adjustments.

Proportionate earnings of YOUR NOW Holding GmbH (YOUR NOW) are included in the Mercedes-Benz Group’s Consolidated Financial Statements with a one-month time lag.

Daimler Truck

BBAC

With completion of the spin-off and hive-down of the

Daimler Truck business, Mercedes-Benz Group holds a

minority interest of 35% in Daimler Truck Holding AG as

of 31 December 2021. The shares are included in the

Consolidated Financial Statements after the spin-off as

an associated company using the equity method and

are presented as an equity investment allocated to the

reconciliation of the reportable segments to the Group.

Further information is provided in Note 3, 38 and 41.

Beijing Benz Automotive Co., Ltd. (BBAC) produces and

distributes Mercedes-Benz cars and spare parts in

China. The investment and the proportionate share in

the results of BBAC are allocated to the Mercedes-Benz

Cars & Vans segment.

In the third quarter of 2021, the shareholders of BBAC

approved the payout of a dividend of €732 million for

the second half of the 2020 financial year. The distribu-

tion of a further dividend for the current financial year

2021 of €801 million was approved in the fourth quarter.

The Daimler Truck Group is one of the world’s largest

commercial vehicle manufacturers. Its product portfolio

comprises light-, medium- and heavy-duty trucks, city

buses and intercity buses, coaches and bus chassis. In

addition, financial services aligned to the product port-

folio are offered.

The distributions reduced the carrying amount of the

investment accordingly. The payout of the dividends led

to a cash inflow in 2021 of €1,523 million.

The Mercedes-Benz Group plans to contribute addi-

tional equity of in total €0.1 billion in accordance with

its shareholding ratio in the years 2022 and 2023.

238

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

BAIC Motor

In December 2019, THBV and HERE and other compa-

nies signed an agreement on the basis of which 30% of

the shares in HERE are to be sold to a joint venture

between Mitsubishi Corporation and Nippon Telegraph

and Telephone Corporation. The transaction was com-

pleted on 29 May 2020 after receiving the approval of

the relevant authorities and led to a gain at THBV. The

amount of €105 million attributable to Mercedes-Benz

Group is included in the line item profit on equi-

ty-method investments, net.

BAIC Motor Corporation Ltd. (BAIC Motor) is the pas-

senger car division of BAIC Group, one of the leading

automotive companies in China. Directly or via subsidi-

aries, BAIC Motor is engaged in the business of

researching, developing, manufacturing, selling, market-

ing and servicing automotive vehicles and related parts

and components and all related services. Due to

Mercedes-Benz Group’s representation on the board of

directors of BAIC Motor and other contractual arrange-

ments, Mercedes-Benz Group classifies this investment

as an investment in an associate, to be accounted for

using the equity method; in the segment reporting, the

investment’s carrying amount and its proportionate

Tables

 

D.41 and D.42 show summarised IFRS finan-

cial information after purchase price allocation for the

significant associated companies, which was the basis

share of profit or loss are presented in the reconciliation for equity-method accounting in the Group’s Consoli-

of total segment’s assets to Group assets and total seg-

ments’ EBIT to Group EBIT, respectively.

dated Financial Statements.

YOUR NOW

Due to the business development, the Group recog-

nised an impairment of €120 million on the carrying

amount of its investment in BAIC Motor in the fourth

quarter of 2021. Already in 2020, in particular in light of

the covid-19 pandemic and its effects, a total impair-

ment of €330 million was recognised. The losses are

YOUR NOW Holding GmbH is a company based in

Munich, Germany and is part of the Mercedes-Benz

Mobility segment. The object of YOUR NOW Hold-

ing GmbH is to hold interests in mobility service provid-

ers in order to offer customers a comprehensive mobil-

ity ecosystem that is intelligent, seamlessly connected

included in the line item profit on equity-method invest- and available at the touch of a fingertip.

ments, net.

In terms of business operations, mobility services were

THBV (HERE)

offered in the areas of FREE NOW (ride hailing), SHARE

NOW (car sharing), CHARGE NOW (charging), PARK NOW

(parking) and REACH NOW (on-demand mobility and

multimodality). In 2021, YOUR NOW Holding GmbH sold

the interest in PARK NOW in the second quarter of 2021.

There Holding B.V. (THBV) holds an interest in HERE

International B.V. (HERE). HERE is one of the biggest

manufacturers of digital roadmaps for navigation sys-

tems worldwide. Future expected high-resolution maps

will be one of the fundamentals for future autonomous

driving. THBV is accounted for in the Consolidated

Financial Statements of Mercedes-Benz Group AG as an

associated company using the equity method, and is

allocated to the Mercedes-Benz Cars & Vans segment.

In 2020, the profit/loss from investments accounted for

using the equity-method included impairment losses of

€92 million, primarily resulting from changes in earnings

forecasts.

Table



D.43 shows summarised IFRS financial informa-

tion after purchase price allocation for the significant

joint ventures which were the basis for equity-method

accounting in the Group’s Consolidated Financial State-

ments.

239

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Other joint ventures accounted for using the

equity method

Mercedes-Benz Group plans to contribute additional

equity of €0.1 billion to Shenzhen DENZA New Energy

Automotive Co. Ltd. (DENZA) in accordance with its

shareholding of currently 50% in the first half of 2022.

In the fourth quarter of 2021, the shareholders Daimler

Greater China Ltd. and BYD Automotive Industry Co.,

Ltd. (BYD) signed a contract on the structural realign-

ment of the joint venture. It is intended that the Group

will transfer shares of DENZA to BYD in mid-2022. After

the equity transfer, Mercedes-Benz Group will hold an

equity interest of 10% while BYD will hold 90%. The

equity transfer is subject to regulatory approvals. The

company is allocated to the Mercedes-Benz Cars & Vans

segment.

In March 2021, Daimler Financial Services Investment

Company LLC sold all its shares in Via Transportation

Inc., USA to external shareholders. The sale resulted in

income before taxes of €89 million, which is reported in

the line item profit/loss on equity-method investments,

net. The company had been allocated to the Mercedes-

Benz Mobility segment.

Table



D.44 shows summarised aggregated financial

information for the other minor equity-method invest-

ments after purchase-price allocation and on a pro-rata

basis.

Further information on equity-method investments is

provided in Note 38.

240

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.41

Summarised IFRS financial information on significant associated companies accounted for using the equity method (1)

Daimler Truck¹

BBAC^ꢀ

ꢀꢁꢀꢁ

2

02ꢀ

ꢀꢁꢀꢁ

202ꢀ

In millions of euros

Information on the statement of income

Revenue

28,ꢁꢀ8

2,265

ꢀ,ꢀ96

ꢂ,ꢁ6ꢀ

-

2ꢀ,288

ꢂ,205

-ꢂꢁ

ꢀꢄ,ꢈꢈꢆ

ꢀ,ꢇꢁꢁ

ꢂ

Profit/loss from continuing operations after taxes

Other comprehensive income/loss

Total comprehensive income/loss

ꢂ,ꢀ7ꢀ

ꢀ,ꢇꢁꢂ

Information on the statement of financial position and reconciliation

to equity-method carrying amounts

Non-current assets

ꢂꢂ,56ꢀ

28,ꢂ70

ꢀ7,962

ꢀ8,8ꢀ6

25,ꢀ5ꢂ

-

7,ꢀ79

8,ꢀ97

ꢀ,ꢀꢀ2

8,ꢀꢀ6

6,ꢀꢁ8

6,ꢆꢂꢆ

ꢅ,ꢃ6ꢀ

ꢄ,ꢁꢄꢁ

ꢅ,ꢃꢅꢃ

ꢃ,ꢆꢁꢄ

Current assets

Non-current liabilities

Current liabilities

Equity (including non-controlling interests)

Equity (excluding non-controlling interests)

attributable to the Group

8,579

-

ꢂ,0ꢀꢂ

-258

-2

ꢀ,6ꢆꢈ

-ꢀꢄꢃ

-ꢄ

Unrealised profit (-)/loss (+) on sales to/purchases from

Other reconciling items including equity-method goodwill and impairments on the investment

Carrying amount of equity-method investment

ꢀ8ꢂ

8,762

2,75ꢂ

ꢀ,ꢆꢂꢄ

1

Daimler Truck:

Figures for the statement of income relate to the period of 1 January to 30 September 2021 not including investor level adjustments.

Figures for the statement of financial position relate to the initial recognition as of 10 December including provisional investor level adjustments without the goodwill included in other

reconciling items.

Figures for the reconciliation to equity-method carrying amounts relate to the balance sheet date of 31 December 2021.

BBAC:

2

Figures for the statement of income relate to the period of 1 January to 31 December.

Figures for the statement of financial position and the reconciliation to equity-method carrying amounts relate to the balance sheet date of 31 December.

241

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.4ꢄ

Summarised IFRS financial information on significant associated companies accounted for using the equity method (ꢄ)

BAIC Motor^ꢂ

THBV (HERE)

ꢀ

2

02ꢀ

ꢀꢁꢀꢁ

202ꢀ

ꢀꢁꢀꢁ

In millions of euros

Information on the statement of income

Revenue

22,809

ꢀ,868

298

ꢀꢀ,6ꢅꢄ

ꢄ,6ꢅꢃ

-ꢂꢀ

-

-ꢀ08

-ꢀ7

-

ꢀꢁ6

ꢄꢁ

Profit/loss from continuing operations after taxes

Other comprehensive income/loss

Total comprehensive income/loss

2,ꢀ66

ꢄ,6ꢃꢂ

-ꢀ25

ꢀꢄ6

Information on the statement of financial position and reconciliation

to equity-method carrying amounts

Non-current assets

ꢀ6,ꢁ92

ꢀ0,ꢁ92

2,78ꢁ

ꢄꢆ,ꢃꢃꢁ

ꢄꢄ,ꢈ6ꢀ

ꢀ,ꢃ66

ꢀ,ꢀ75

2

ꢄ,ꢄꢇꢁ

ꢀꢆ

Current assets

Non-current liabilities

Current liabilities

87

-

ꢀꢀ,ꢂ67

ꢀ2,8ꢂꢂ

ꢄꢂ,ꢁꢆꢈ

ꢄꢁ,6ꢇꢇ

-

Equity (including non-controlling interests)

ꢀ,090

ꢄ,ꢀꢄꢆ

Equity (excluding non-controlling interests)

attributable to the Group

892

ꢈꢆꢃ

ꢂ2ꢁ

ꢂ6ꢄ

Unrealised profit (-)/

loss (+) on sales to/

purchases from

-29

-56ꢂ

ꢂ00

-ꢄꢈ

-ꢂꢇꢈ

ꢂꢂꢄ

-

Other reconciling items including equity-method goodwill and impairments on the investment

Carrying amount of equity-method investment

ꢂ2ꢁ

ꢂ6ꢄ

1

BAIC Motor:

The Mercedes-Benz Group recognises its proportionate share of profits or losses of BAIC Motor Corporation Ltd. (BAIC Motor) with a three-month time lag.

Figures for the statement of income relate to the period of 1 October to 30 September.

Figures for the statement of financial position and the reconciliation to equity-method carrying amounts relate to the balance sheet date of 30 September.

THBV:

2

Figures for the statement of income relate to the period of 1 January to 31 December.

Figures for the statement of financial position and the reconciliation to equity-method carrying amounts relate to the balance sheet date of 31 December.

242

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.43

Summarised IFRS financial information on significant joint ventures accounted for using the equity method

YOUR NOW¹

ꢀꢁꢀꢁ

2

02ꢀ

In millions of euros

Information on the statement of income

Revenue

260

-26

-

ꢂꢂꢂ

-ꢄꢄꢆ

-

Depreciation and amortisation

Interest income

Interest expense

-26

-ꢂ

-6

Income taxes

-ꢄ

Profit/loss from continuing operations after taxes

Profit/loss from discontinued operations after taxes

Other comprehensive income/loss

Total comprehensive income/loss

-ꢂꢂꢂ

-

-ꢃꢆ6

-ꢇꢄ

-

ꢁ

-ꢂ29

-6ꢂꢈ

Information on the statement of financial position and

reconciliation to equity-method carrying amounts

Non-current assets

ꢂ25

80ꢀ

55ꢂ

ꢀꢀ0

-

6ꢃꢄ

ꢄ,ꢁꢁꢆ

ꢂꢈꢂ

ꢄꢆꢇ

ꢀ

Current assets

thereof cash and cash equivalents

Non-current liabilities

thereof non-current financial liabilities

Current liabilities

ꢂ09

22

ꢂꢇꢃ

ꢄꢀ

thereof current financial liabilities

Equity (including non-controlling interests)

707

ꢄ,ꢄꢄꢄ

Equity (excluding non-controlling interests)

attributable to the Group

ꢂ5ꢂ

-

ꢃꢃ6

-

Unrealised profit (-)/loss (+) on sales to/purchases from

Other reconciling items including equity-method goodwill and impairments on the investment

Carrying amount of equity-method investment

ꢂ0

-ꢄꢀ

ꢃꢆꢆ

ꢂ8ꢂ

1

The Mercedes-Benz Group recognises its proportionate share of profits or losses of the YOUR NOW joint ventures with a one-month time lag.

Figures for the statement of income relate to the period of 1 December to 30 November.

Figures for the statement of financial position and the reconciliation to equity-method carrying amounts relate to the balance sheet date of 30 November.

D.44

Summarised aggregated financial information on minor equity-method investments

Associated companies

Joint ventures

2

02ꢀ

ꢀꢁꢀꢁ

202ꢀ

ꢀꢁꢀꢁ

In millions of euros

Summarised aggregated financial information (pro rata)

Profit/loss from continuing operations after taxes

Profit/loss from discontinued operations after taxes

Other comprehensive income/loss

26

-

-ꢄꢄ

-

ꢂꢂ

-

ꢂꢃ

-

ꢀꢁ

ꢁ0

ꢅ

-

Total comprehensive income/loss

-ꢂ

ꢂꢂ

ꢂꢃ

243

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

1ꢃ. Receivables from financial services

Loss allowances

The development of loss allowances for receivables

from financial services due to expected credit losses is

shown in table D.47.

Table D.45 shows the components of receivables

from financial services.



Types of receivables

At 31 December 2020, €0.4 billion of the loss allow-

ances related to the increase in the allowance for credit

losses recognised at the Mercedes-Benz Mobility seg-

ment through profit and loss as a result of the economic

development in connection with the covid-19 pandemic.

In addition, the decrease of the loss allowances com-

pared to 2020 is attributable to the spin-off and hive-

down of Daimler’s commercial vehicle business.

Receivables from sales financing with customers

include receivables from credit financing for customers

who purchased their vehicle either from a dealer or

directly from the Mercedes-Benz Group.

Receivables from sales financing with dealers represent

loans for floor financing programmes for vehicles sold

by the Group’s automotive businesses to dealers or

loans for assets purchased by dealers from third parties, The carrying amounts of receivables from financial ser-

primarily, used vehicles traded in by dealers’ customers

or dealers’ real estate financing.

vices based on modified contracts that are shown in

stages 2 and 3, amounted to €392 million at

31 December 2021 (31 December 2020: €2,440 million).

Receivables from finance-lease contracts consist of

receivables from leasing contracts for which all sub-

stantial risks and rewards incidental to the leasing

objects are transferred to the lessee.

In addition, carrying amounts of €210 million

(31 December 2020: €473 million) in connection with

contractual modifications were reclassified from stages

2 and 3 into stage 1.

All cash-flow effects attributable to receivables from

Credit risks

financial services are presented within cash provided by Information on credit risks included in receivables from

for operating activities in the Consolidated Statement of financial services is shown in table

Cash Flows.



D.48.

Longer overdue periods regularly lead to higher allow-

ances.

Table



D.46 shows the maturities of the future con-

tractual lease payments and the development of lease

payments to the carrying amounts of receivables from

finance-lease contracts.

At the beginning of the contracts, collaterals of usually

at least 100% of the carrying amounts were agreed,

which are backed by the vehicles based on the underly-

ing contracts. Over the contract terms, the amounts of

the collaterals are included in the calculation of the risk

provisioning, so the carrying amounts of the credit-im-

paired contracts are primarily backed by the underlying

vehicles.

In 2021, the Mercedes-Benz Group recognised a gain of

€203 million (2020: €33ꢉ million) as the difference

between the additions to receivables from finance-

lease contracts and the carrying amounts of the under-

lying assets (especially in connection with the delivery

of vehicles to consolidated companies, which result in a

finance-lease).

Further information on financial risks and the nature of

risks is provided in Note 34.

At 31 December 2021, receivables from financial ser-

vices with a carrying amount of €10,378 million

(

31 December 2020: €11,4ꢉ3 million) were pledged

mostly as collateral for liabilities from ABS transactions

Other post-employment benefits

Risks from defined benefit pension plans and

pension plan assets

Certain foreign subsidiaries of the Mercedes-Benz

Group, mainly in the United States, provide their

employees with post-employment health care benefits

with defined entitlements, which have to be accounted

The general requirements with regard to retirement ben-

efit models are included in guidelines with Group-wide

validity. Accordingly, the committed benefits are

intended to contribute to additional financial security

during retirement, and in the case of death or invalidity

to be capable of being planned and fulfilled by the

respective company of the Group and to have a low-risk

structure. In addition, a committee exists that approves

for as defined benefit plans. Table



D.57 shows key

data for other post-employment benefits. The decrease

in the present value of defined benefit obligations

results from the disposal of the obligations in the con-

text of the deconsolidation of the Daimler commercial

vehicle business. The effect from the adjustment of the

new pension plans and amendments to existing pension future contributions to other post-employment benefits

plans as well as guidelines relating to company retire-

ment benefits.

of one plan in the United States is included in the net

periodic cost for other post-employment benefits in

2020.

The obligations from defined benefit pension plans and

the pension plan assets can be subject to fluctuations

over time. This can cause the funded status to be nega-

tively or positively impacted. Fluctuations in the defined

benefit pension obligations result at the Mercedes-Benz

Group in particular from changes in financial assump-

tions such as discount rates and increases in the cost of

living, but also from changes in demographic assump-

tions such as adjusted life expectancies. With most of

the German plans, expected long-term wage and salary

increases do not have an impact on the amount of the

obligation.

D.ꢃꢇ

Key data for other post-employment benefits

202ꢀ

ꢁꢁ5

ꢀꢁꢀꢁ¹

ꢄ,ꢁꢀꢂ

In millions of euros

Present value of defined benefit

obligations

Fair value of

reimbursement rights

-

Funded status

-ꢁꢁ5

-ꢄ,ꢁꢀꢂ

Net periodic cost for other

post-employment benefits

-25

ꢄꢄꢈ

The fair value of plan assets is predominantly deter-

mined by the situation on the capital markets. Unfa-

vourable developments, especially of equity prices and

fixed-interest securities, could reduce that fair value.

The diversification of investment funds, the engagement

of asset managers using quantitative and qualitative

analyses, and the continual monitoring of performance

and risk help to reduce the associated investment risk.

The Group regularly makes additional contributions to

the plan assets in order to cover future obligations from

defined benefit pension plans.

1

The spin-off of Daimler’s commercial vehicle business is included in the amounts as of

1 December 2020.

3

258

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Reconciliation of the net obligation from defined

Composition of plan assets

benefit pension plans

The development of the present value of the defined

Plan assets are used solely to provide pension benefits

and to cover the administration costs of the plan assets.

benefit obligations and of the fair value of plan assets is The composition of the Group’s pension plan assets is

shown in table D.58. This includes effects of the shown in table D.59.

Daimler commercial vehicle business until the date of

deconsolidation. The table thus presents continuing and Market prices are usually available for equities and



discontinued operations.

bonds due to their listing in active markets. Most of the

bonds have investment grade ratings. They include gov-

ernment bonds of very good creditworthiness.

The investment strategy is reviewed regularly and

adjusted if deemed necessary. The investment strategy

is determined by Investment-Committees, which are

generally composed of representatives of the Finance

and Human Resources departments. The investment

strategy for the pension plan assets is generally ori-

ented towards the structure of the pension obligations.

259

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢃꢈ

Present value of defined benefit pension obligations and fair value of plan assets

2

02ꢀ

ꢀꢁꢀꢁ

German Non-German

Total

Plans

Total

Plans

In millions of euros

Present value of the defined benefit obligation

at 1 January

ꢂ9,8ꢁ6

82ꢂ

ꢂ5,ꢁ8ꢁ

7ꢁꢁ

ꢁ,ꢂ62

79

ꢂ6,ꢄꢇꢃ

ꢈꢇꢃ

ꢆꢆꢆ

ꢂꢁ

ꢂꢄ,ꢈꢈꢁ

6ꢅ6

ꢂꢁꢇ

ꢀꢃ

ꢆ,ꢆꢀꢃ

ꢄꢁꢇ

ꢄꢂꢃ

ꢃ

Current service cost

Interest cost

258

ꢀꢁ5

ꢀꢀꢂ

5

Contributions by plan participants

ꢂꢀ

26

Actuarial gains (-)/losses from changes in demographic assumptions

Actuarial gains (-)/losses from changes in financial assumptions

Actuarial gains (-)/losses from experience adjustments

Actuarial gains (-)/losses

-ꢀꢁ

-2

-ꢀ2

-85

-27

-ꢀ2ꢁ

-ꢃꢁ

ꢄꢁ

-6ꢁ

ꢂꢂ6

ꢃ

-ꢂ,57ꢂ

-ꢂꢀ

-ꢂ,ꢁ88

-ꢁ

ꢂ,ꢅꢂꢁ

ꢆ

ꢂ,ꢆꢇꢆ

-ꢄ

-ꢂ,6ꢀ8

-ꢂ,ꢁ9ꢁ

ꢂ,ꢈꢅꢆ

ꢂ,ꢃꢁꢂ

ꢀꢅꢄ

Past service cost, curtailments

and settlements

7

-

7

-ꢄꢁꢆ

-

-ꢄꢁꢆ

-ꢀꢁꢀ

Pension benefits paid

-ꢀ,077

-86ꢂ

-2ꢀꢁ

-ꢄ,ꢁꢀꢂ

-ꢅꢀꢄ

Reduction of the present value of the defined benefit obligations resulting

from the spin-off of Daimler’s commercial vehicle business

-8,09ꢁ

ꢂ28

-5,5ꢁ2

80

-2,552

2ꢁ8

-

-ꢀꢈꢃ

-

ꢄꢀ

-

-ꢀꢅꢈ

Currency exchange-rate changes and

other changes

Present value of the defined benefit obligation

at 31 December

28,50ꢁ

26,580

ꢀ,92ꢁ

ꢂꢇ,ꢅꢆ6

ꢂꢃ,ꢆꢅꢆ

ꢆ,ꢂ6ꢀ

Fair value of plan assets

at 1 January

28,870

ꢀ88

25,ꢁ00

ꢀ0ꢀ

886

987

ꢂ,ꢁ70

87

ꢀꢈ,ꢈ6ꢁ

ꢂꢀꢅ

ꢀꢆ,ꢆꢃꢆ

ꢀꢂꢂ

ꢂ,ꢂꢁ6

ꢇꢃ

Interest income from plan assets

Actuarial gains/losses (-)

ꢀ,055

ꢀ,2ꢁꢂ

852

ꢀ69

256

ꢀꢀ0

ꢁ

ꢄ,ꢄꢆꢅ

ꢄ,ꢆꢈ6

ꢈꢅꢅ

ꢅꢁꢁ

ꢂꢆꢅ

ꢆꢆꢂ

ꢄꢀꢃ

ꢃ

Actual result on plan assets

Contributions by the employer

Contributions by plan participants

Pension benefits paid

ꢄ,ꢁꢂꢂ

66ꢂ

7ꢁ2

ꢂ0

26

ꢂꢁ

ꢀꢃ

-ꢀ,0ꢀꢁ

-8ꢂ0

-ꢀ8ꢁ

-ꢇ6ꢆ

-ꢈꢅ6

-ꢄꢈꢅ

Reduction of the fair value of plan assets resulting from the spin-off of

Daimler’s commercial vehicle business

-6,ꢁꢇꢈ

ꢂ28

-ꢆ,ꢁꢀꢄ

88

-ꢀ,ꢁꢈ6

2ꢁ0

-

-ꢀꢀꢁ

-

ꢄꢄ

-

-ꢀꢂꢄ

Currency exchange-rate changes and

other changes

Fair value of plan assets

at 31 December

2ꢁ,2ꢀ2

22,ꢂ92

ꢀ,820

ꢀꢅ,ꢅꢈꢁ

ꢀꢃ,ꢆꢁꢁ

ꢂ,ꢆꢈꢁ

Funded status

at 31 December

-ꢁ,292

-ꢀꢁ

-ꢁ,ꢀ88

-ꢀ0ꢁ

-ꢀꢁ

-ꢄꢁ,ꢇꢈ6

-ꢂ

-ꢄꢁ,ꢁꢅꢆ

-ꢅꢇꢀ

-ꢂ

actuarial loss due to asset ceiling

-

Net defined benefit liability

at 31 December

-ꢁ,ꢂ06

608

-ꢁ,ꢀ88

ꢁ69

-ꢀꢀ8

ꢀꢂ9

-ꢄꢁ,ꢇꢈꢇ

6ꢅ

-ꢄꢁ,ꢁꢅꢆ

-

-ꢅꢇꢃ

6ꢅ

thereof recognised in other assets

thereof recognised in provisions for pensions and similar obligations

-ꢁ,9ꢀꢁ

-ꢁ,657

-257

-ꢄꢄ,ꢁꢆꢈ

-ꢄꢁ,ꢁꢅꢆ

-ꢇ6ꢂ

2ꢉ0

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢃꢉ

Composition of plan assets

ꢂꢀ December 202ꢀ

German Non-German

ꢂꢄ December ꢀꢁꢀꢁ¹

German Non-German

Total

Plans

Total

Plans

In millions of euros

Equities²

7,ꢀ2ꢁ

ꢁ,2ꢀ9

ꢀ0,22ꢀ

ꢀ8ꢂ

6,79ꢀ

ꢂ,58ꢂ

9,696

77

ꢂꢂꢂ

6ꢂ6

ꢅ,ꢄꢈꢁ

ꢆ,ꢈꢂꢅ

ꢄꢄ,ꢇꢆꢁ

ꢈꢁ

ꢈ,ꢁꢇꢀ

ꢂ,ꢇꢇꢄ

ꢄꢁ,ꢈꢃꢇ

6ꢄ

ꢄ,ꢁꢈꢅ

ꢈꢆꢈ

ꢄ,ꢄꢅꢄ

ꢇ

Government bonds

Corporate bonds

525

Securitised bonds

Bonds

ꢀ06

ꢀꢁ,62ꢂ

22

ꢀꢂ,ꢂ56

ꢀ6

ꢀ,267

6

ꢄ6,ꢈꢆꢅ

ꢄꢁ

ꢄꢆ,ꢅꢄꢄ

ꢂ

ꢄ,ꢇꢂꢈ

ꢈ

Other exchange-traded instruments

Exchange-traded instruments

2ꢀ,769

20,ꢀ6ꢂ

ꢀ,606

ꢀꢆ,ꢇꢀꢅ

ꢀꢄ,ꢇꢁ6

ꢂ,ꢁꢀꢀ

Alternative investments and other non-exchange-traded instru-

ments

592

570

50ꢂ

506

89

6ꢁ

ꢄ,ꢀꢄꢂ

ꢆꢅꢀ

ꢇꢅꢁ

ꢂꢅꢄ

ꢀꢂꢂ

ꢄꢁꢄ

Real estate

Cash and cash equivalents

Non-exchange-traded instruments

Fair value of plan assets

ꢀ,28ꢀ

2,ꢁꢁꢂ

2ꢁ,2ꢀ2

ꢀ,220

2,229

22,ꢂ92

6ꢀ

ꢀ,ꢀꢆꢈ

ꢂ,ꢇꢆꢀ

ꢀꢅ,ꢅꢈꢁ

ꢀ,ꢄꢂꢂ

ꢂ,ꢆꢇꢆ

ꢀꢃ,ꢆꢁꢁ

ꢄꢄꢆ

2ꢀꢁ

ꢆꢆꢅ

ꢀ,820

ꢂ,ꢆꢈꢁ

1

2

The plan assets of Daimler’s spun-off of commercial vehicle business are included in the plan assets as of 31 December 2020.

Including the shares in Nissan in the amount of €497 million; including the shares in Renault and Nissan of €983 million in total as of 31 December 2020.

Pension cost

The components of pension cost for continuing opera-

tions included in the Consolidated Statement of Income

are shown in table



D.60. The gain shown in 2020 as

past service cost results from the freeze of a defined

benefit pension plan in the United States.

D.ꢆꢅ

Pension cost

2

02ꢀ

ꢀꢁꢀꢁ

German Non-German

Total

Plans

Total

-ꢃꢅꢆ

Plans

In millions of euros

Current service cost

-60ꢁ

-58ꢀ

-2ꢂ

-ꢃꢂꢂ

-ꢃꢄ

Past service cost,

curtailments and settlements

-9

-ꢁꢀ

ꢁ

-

-ꢂꢂ

-

-9

-8

ꢄꢁꢃ

-ꢈꢁ

ꢂ

-

-ꢃꢈ

-

ꢄꢁꢃ

-ꢄꢂ

ꢂ

Net interest expense

Net interest income

ꢁ

-

650

-6ꢀꢁ

-ꢂ6

-ꢃꢆ6

-ꢃꢇꢁ

ꢆꢆ

2ꢉ1

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Measurement assumptions

Effect on future cash flows

The measurement date for the Group’s defined benefit

pension obligations and plan assets is generally

In January 2022, around 5% of the shares in Daimler

Truck Holding AG were contributed into German pension

31 December. The measurement date for the Group’s net plan assets, which are held on trust by Daimler Pension

periodic pension cost is generally 1 January. The

assumptions used to calculate the defined benefit obli-

gations vary according to the economic conditions of

the countries in which the pension plans are situated.

Trust e.V.. The contribution is a non-cash transaction

and amounted to €1.3 billion. For the year 2022, the

Mercedes-Benz Group will decide in the fourth quarter

of the year whether or not and in which amount to make

further contributions in addition to contributing the

shares in Daimler Truck Holding AG. The pensions bene-

fits paid are expected to amount to €0.9 billion in 2022.

Calculation of the defined benefit obligations uses life

expectancy for the German plans based on the 2018 G

Heubeck-mortality tables. Comparable country-specific

calculation methods are used for non-German plans.

The weighted average duration of the defined benefit

obligations is shown in table



D.63.

Table



D.61 shows the significant weighted average

measurement factors used to calculate pension benefit

obligations.

Defined contribution pension plans

Under defined contribution pension plans, the

Mercedes-Benz Group makes defined contributions to

external insurance policies or investment funds. There

are fundamentally no further contractual obligations or

risks for the Mercedes-Benz Group in excess of the

defined contributions. The Group also pays contribu-

tions to governmental pension schemes. In 2021, the

total cost from defined contribution plans amounted to

€1.5 billion (2020: €1.ꢉ billion). Of those payments,

€1.3 billion (2020: €1.5 billion) was related to govern-

mental pension plans.

Sensitivity analysis

An increase or decrease in the main actuarial assump-

tions would affect the present value of the defined

benefit pension obligations as shown in table



D.62.

The calculations carried out by actuaries were done in

isolation for the evaluation parameters regarded as

important. This means that if there is a simultaneous

change in several parameters, the individual results

cannot be summed due to correlation effects. With a

change in the parameters, the sensitivities shown can-

not be used to derive a linear development of the

defined benefit obligation.

For the calculation of the sensitivity of life expectancy,

by means of fixed (non-age-dependent) factors for a

reference person, a life expectancy one year higher or

one year lower is arrived at.

2ꢉ2

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢆ1

Significant factors for the calculation of pension benefit obligations

ꢂꢄ December

ꢀꢁꢀꢁ¹

ꢂꢄ December

202ꢀ ꢀꢁꢀꢁ¹

2

02ꢀ

German

Plans

German Non-German Non-German

Plans

In percent

Discount rates

ꢀ.ꢀ

ꢀ.8

ꢁ.ꢆ

ꢄ.ꢅ

2.7

ꢀ.ꢃ

Expected increase in cost of living²

-

1

The spin-off of Daimler’s commercial vehicle business is included in the amounts as of 31 December 2020.

2

For German plans, expected increases in cost of living may affect – depending on the design of the pension plan – the obligation to the Group’s active employees as well as to retirees

and their survivors. For most non-German plans, expected increases in cost of living do not have a material impact on the amount of the obligation.

D.ꢆꢄ

Sensitivity analysis for the present value of defined benefit pension obligations¹

ꢂꢀ December 202ꢀ

ꢂꢄ December ꢀꢁꢀꢁ¹

German Non-German

Total

Plans

Total

Plans

In millions of euros

Sensitivity for discount rates

+ ꢁ.ꢀꢃ%

- ꢁ.ꢀꢃ%

-ꢀ,0ꢁ6

ꢀ,ꢀꢀ2

-97ꢀ

-75

79

-ꢄ,6ꢄꢄ

ꢄ,ꢈꢄꢇ

-ꢄ,ꢆꢆꢅ

ꢄ,ꢃꢆꢇ

-ꢄ6ꢂ

ꢄꢈꢁ

ꢀ,0ꢂꢂ

Sensitivity for expected increases

in cost of living

+ ꢁ.ꢄꢁ%

88

7ꢂ

ꢀ5

ꢄꢄꢅ

ꢄꢁꢀ

ꢄ6

Sensitivity for expected increases

in cost of living

- ꢁ.ꢄꢁ%

+ ꢄ year

- ꢄ year

-88

ꢁ67

-72

ꢁꢂ2

-ꢀ6

ꢂ5

-ꢄꢀꢄ

6ꢀꢈ

-ꢄꢁꢀ

ꢃꢀꢀ

-ꢄꢇ

ꢄꢁꢃ

Sensitivity for life expectancy

-ꢁꢀꢀ

-ꢂ77

-ꢂꢁ

-ꢃ6ꢂ

-ꢆꢃꢆ

-ꢄꢁꢇ

1

The spin-off of Daimler’s commercial vehicle business is included in the amounts as of 31 December 2020.

D.ꢆ3

Weighted average duration of

the defined benefit obligations

2

02ꢀ

ꢀꢁꢀꢁ¹

In years

German plans

ꢀ6

ꢄꢈ

ꢄ6

Non-German plans

1

The spin-off of Daimler’s commercial vehicle business is included in the amounts as of

1 December 2020.

3

2ꢉ3

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

ꢄ4. Provisions for other risks

Liability and litigation risks and regulatory

proceedings

The development of provisions for other risks is summa-

Provisions for liability and litigation risks and regulatory

proceedings comprise costs for various legal proceed-

ings, claims and governmental investigations, which can

lead in particular to payments of compensation, puni-

tive damages or other costly actions. They primarily

include risks from litigation and regulatory proceedings

in relation to Mercedes-Benz diesel vehicles. The cash

outflows in relation to non-current provisions are pri-

marily expected within a period until 2023.

rised in table



D.64.

Product warranties

The Mercedes-Benz Group issues various types of prod-

uct warranties, under which it generally guarantees the

performance of products delivered and services ren-

dered for a certain period. The provision for these prod-

uct warranties covers expected costs for legal and con-

tractual warranty claims as well as expected costs for

goodwill concessions and recall campaigns. This also

includes measures relating to Mercedes-Benz diesel

vehicles in various regions as well as recalls, in particu-

lar for an extended recall of Takata airbags. The utilisa-

tion date of product warranties depends on the inci-

dence of the warranty claims and can span the entire

term of the product warranties. The cash outflow for

non-current product warranties are primarily expected

within a period until 2024.

Further information on liability and litigation risks and

regulatory proceedings is provided in Note 31.

Other

Provisions for other risks primarily comprise expected

costs for provisions for environmental protection, other

taxes and charges related to income taxes. They also

include provisions for anticipated losses on contracts

and various other risks which cannot be allocated to any

other class of provision.

Personnel and social costs

Provisions for personnel and social costs primarily com-

prise expected expenses of the Group for employee

anniversary bonuses, profit sharing arrangements and

management bonuses as well as early-retirement and

partial-retirement plans. The additions recorded to the

provisions for profit sharing and management bonuses

in the reporting year usually result in cash outflows in

the following year. The cash outflows for non-current

provisions for personnel and social costs are primarily

expected within a period until 2032.

2ꢉ4

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢆ4

Provisions for other risks

Litigation

risks and

Personnel

Product

warranties

and social

costs

regulatory

proceedings

Other

Total

In millions of euros

Balance at 31 December ꢄꢅꢄꢅ

thereof current

ꢅ,ꢆꢈ6

ꢂ,ꢇꢇꢃ

ꢆ,ꢆꢅꢄ

ꢁ,ꢀꢁ7

-ꢂ,8ꢂ7

-ꢁꢂ5

ꢆ,6ꢂꢅ

ꢄ,6ꢀꢆ

ꢂ,ꢁꢄꢆ

ꢂ,ꢀ96

-ꢀ,ꢁꢁ8

-ꢀꢁꢁ

ꢆ,6ꢀꢃ

ꢄ,ꢃꢈꢅ

ꢂ,ꢁꢆꢈ

ꢂ58

ꢀ,ꢈꢄꢄ

ꢀ,ꢄꢂꢈ

ꢃꢈꢆ

ꢀꢁ,ꢆꢃꢁ

ꢇ,ꢂꢂꢆ

thereof non-current

ꢄꢄ,ꢄꢄ6

9,0ꢂ2

-7,5ꢂ9

-ꢀ,ꢂꢁꢁ

-ꢀ20

Additions

ꢀ,ꢂꢂꢀ

-ꢀ,05ꢁ

-669

-2

Utilisations

-ꢀ,200

-96

Reversals

Compounding and effects from changes in discount rates

Currency translation and other changes¹

Balance at 31 December ꢄꢅꢄ1

thereof current

ꢀ

-ꢀ2ꢁ

5

-ꢀ,566

6,786

ꢂ,ꢁꢂ8

ꢂ,ꢂꢁ8

-ꢀ,ꢁ97

ꢁ,62ꢀ

ꢀ,996

2,625

-ꢀ,05ꢁ

2,6ꢂ8

ꢀ,ꢀꢂ9

ꢀ,ꢁ99

-ꢁ00

ꢀ,9ꢀ7

ꢀ,ꢁ80

ꢁꢂ7

-ꢁ,5ꢀ7

ꢀ5,962

8,05ꢂ

7,909

thereof non-current

1

Including the provisions disposed of as part of the deconsolidation of the Daimler commercial vehicle business.

2ꢉ5

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

ꢄꢃ. Financing liabilities

The composition of financing liabilities is shown in table

D.65.



Information on the maturities of lease liabilities as of

1 December 2021 is provided in Note 34.

3

D.ꢆꢃ

Financing liabilities

At ꢂꢀ December 202ꢀ

At ꢂꢄ December ꢀꢁꢀꢁ

Current

Non-current

Total

Current

Non-current

Total

In millions of euros

Notes/bonds

ꢀ5,ꢀꢁꢀ

57

5ꢀ,225

-

66,ꢂ66

57

ꢄꢈ,ꢅꢁ6

66ꢆ

ꢃꢅ,ꢅꢃꢈ

-

ꢈ6,66ꢂ

66ꢆ

Commercial paper

Liabilities to financial institutions

Deposits in the direct banking business

Liabilities from ABS transactions

Lease liabilities

ꢀꢁ,897

ꢀꢀ,559

9,572

ꢁ96

9,ꢀ00

2,0ꢂ2

8,8ꢂꢀ

2,066

289

2ꢂ,997

ꢀꢂ,59ꢀ

ꢀ8,ꢁ0ꢂ

2,562

867

ꢄꢇ,ꢈꢁꢂ

ꢄꢁ,ꢅ6ꢅ

ꢅ,ꢅꢄꢇ

6ꢈꢅ

ꢄꢀ,6ꢅꢅ

ꢂ,6ꢆꢅ

ꢈ,ꢈꢆꢅ

ꢂ,ꢁ6ꢇ

ꢃꢀꢇ

ꢂꢀ,ꢂꢇꢄ

ꢄꢆ,ꢃꢄ6

ꢄ6,ꢃ6ꢈ

ꢂ,ꢈꢆꢈ

Loans, other financing liabilities

578

ꢈ6ꢃ

ꢄ,ꢀꢇꢆ

5

2,ꢂ00

7ꢂ,5ꢁꢂ

ꢀ25,8ꢁꢂ

ꢃꢇ,ꢂꢁꢂ

ꢅ6,ꢃꢂꢇ

ꢄꢆꢃ,ꢅꢆꢀ

ꢄꢆ. Other financial liabilities

The composition of other financial liabilities is shown in

table D.66.



Financial liabilities measured at fair value through profit

or loss relate exclusively to derivative financial instru-

ments which are not used in hedge accounting.

Further information on other financial liabilities is pro-

vided in Note 33.

2ꢉꢉ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢆꢆ

Other financial liabilities

At ꢂꢀ December 202ꢀ

At ꢂꢄ December ꢀꢁꢀꢁ

Current

Non-current

Total

Current

ꢄꢄꢃ

Non-current

Total

In millions of euros

Derivative financial instruments

used in hedge accounting

ꢂꢂꢂ

ꢀ,087

ꢀ,ꢁ20

ꢀꢃꢀ

ꢂ6ꢈ

Financial liabilities recognised at fair

value through profit or loss

ꢀ0ꢁ

65ꢂ

26

2ꢀ2

ꢀ0

ꢀꢂ0

865

ꢀ6

ꢇꢀꢇ

ꢄꢆ

ꢅꢀꢁ

ꢆꢀ

ꢆꢁ

ꢄ,ꢈꢆꢇ

ꢄ,6ꢁꢈ

ꢅꢅꢃ

Liabilities from residual value guarantees

Liabilities from wages and salaries

Accrued interest expenses

Deposits received

ꢀ,0ꢁ5

7ꢁꢀ

ꢀ,055

7ꢁꢀ

ꢄ,ꢃ6ꢃ

ꢅꢅꢃ

-

26ꢁ

ꢁ08

65

672

ꢃꢁꢄ

ꢃꢄꢄ

ꢂꢂꢀ

ꢄ,ꢈꢁꢃ

ꢄ,ꢇꢈꢄ

ꢄ,ꢁꢄꢀ

ꢀ,ꢇꢂꢅ

ꢅ,ꢄꢇꢄ

ꢅ,ꢃꢇꢅ

Other

2,857

5,560

2,922

6,255

7,805

ꢀ,6ꢁ6

6,ꢆꢅ6

6,6ꢀꢈ

Miscellaneous other financial liabilities

695

ꢀ,808

5

,997

ꢄꢇ. Deferred income

The composition of deferred income is shown in

table



D.67.

D.ꢆꢇ

Deferred income

At ꢂꢀ December 202ꢀ

At ꢂꢄ December ꢀꢁꢀꢁ

Current

Non-current

Total

Current

ꢀꢅꢅ

Non-current

Total

In millions of euros

Deferral of sales revenue received from sales

with residual-value guarantees

86

90

ꢀ76

ꢃ6ꢁ

ꢅꢆꢅ

Deferral of advance rental payments received

from operating lease arrangements

ꢀ,ꢀꢂ2

268

957

ꢀ28

2,089

ꢂ96

ꢇꢈꢃ

ꢂꢂꢄ

ꢅꢇꢁ

ꢄꢄꢈ

ꢄ,ꢅ6ꢃ

ꢆꢆꢅ

Other deferred income

ꢀ,ꢁ86

ꢀ,ꢀ75

2,66ꢀ

ꢄ,ꢃꢇꢆ

ꢄ,ꢃ6ꢈ

ꢂ,ꢄ6ꢄ

2ꢉ7

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

ꢄꢈ. Contract and refund liabilities

Table D.68 shows the composition of contract and



refund liabilities.

D.ꢆꢈ

Contract and refund liabilities

At ꢂꢄ December

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

Service and maintenance contracts and

extended warranties

ꢁ,ꢀ7ꢀ

ꢀ,6ꢂ8

5,809

6,ꢄ66

ꢄ,6ꢈꢅ

ꢈ,ꢅꢆꢆ

Other contract liabilities

Contract liabilities

Obligations from sales transactions

Other refund liabilities

ꢂ,857

2ꢁꢂ

ꢆ,6ꢀꢈ

ꢆꢅꢃ

Refund liabilities

ꢁ,ꢀ00

ꢃ,ꢄꢄꢀ

Contract and refund

liabilities

9,909

ꢂ,980

5,929

ꢄꢀ,ꢇꢃ6

ꢃ,ꢈꢅꢈ

ꢈ,ꢄ6ꢇ

thereof non-current

thereof current

The decrease in contract liabilities includes €2,840

million from the spin-off and hive-down of Daimler’s

commercial vehicle business.

2ꢉ8

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

ꢄꢉ. Other liabilities

Table



D.69 shows the composition of other liabilities.

D.ꢆꢉ

Other liabilities

At ꢂꢀ December 202ꢀ

At ꢂꢄ December ꢀꢁꢀꢁ

Current

Non-current

Total

Current

Non-current

Total

In millions of euros

Income tax liabilities

ꢀ,ꢁ57

ꢀ,ꢁ7ꢂ

ꢀ56

722

ꢀ

2,ꢀ79

ꢀ,ꢁ7ꢁ

ꢀ60

ꢄ,ꢁꢁꢄ

ꢀ,ꢀꢄꢆ

ꢄꢅꢇ

ꢇꢃꢂ

ꢄ

ꢄ,ꢇꢃꢆ

ꢀ,ꢀꢄꢃ

ꢀꢄ6

Other tax liabilities

Miscellaneous other liabilities

ꢁ

ꢀꢈ

ꢂ,086

727

ꢂ,8ꢀꢂ

ꢂ,ꢆꢁꢆ

ꢇꢅꢄ

ꢆ,ꢂꢅꢃ

3

ꢅ. Consolidated Statement of Cash Flows

The line item other non-cash expense and income

within the reconciliation of profit before income taxes to

cash provided by operating activities in the reporting

year primarily comprised of the deconsolidation of the

spin-off and hive-down of the Daimler commercial vehi-

cle business, the result from the Group’s share in the

profit/loss of companies accounted for using the equity

method and the remeasurement of the interest in

Daimler Truck Fuel Cell GmbH & Co. KG, that is still held

by the Mercedes-Benz Group. In the prior year, the line

item primarily comprised the Group’s share in the profit/

loss of companies accounted for using the equity

method as well as an impairment loss with respect to

its investment in BAIC Motor due to a reassessment of

the business development in light of the covid-19 pan-

demic.

Calculation of funds

At December 31, 2021, cash and cash equivalents

included restricted funds of €3ꢉ (2020: € 133 million).

The restricted funds primarily relate to subsidiaries

where exchange controls apply so that the Group has

restricted access to the funds.

Cash provided by operating activities

Changes in other operating assets and liabilities are

shown in table



D.70.

The decrease of the miscellaneous other assets and lia-

bilities in comparison to the prior year period was

related to financial and non-financial assets and liabili-

ties. Major negative effects resulted from tax rebates

and liabilities in connection with VAT due to the

Cash used for financing activities

improved overall business performance in the year 2021, Cash used for financing activities includes cash flows

whereas in the prior year the business performance was

highly negative affected by the worldwide conse-

quences of the covid-19 pandemic. Further major nega-

tive effects were primarily related to financial assets.

from hedging the currency risks of financial liabilities.

Cash used for financing activities included payments for

the reduction of outstanding leasing liabilities of

€743 million (2020: €729 million).



Table D.71 shows cash flows included in cash pro-

vided by operating activities.

2ꢉ9

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Table



D.72 includes changes in liabilities arising from

31. Legal proceedings

financing activities, divided into cash and non-cash

components.

Mercedes-Benz Group AG and its subsidiaries are con-

fronted with various legal proceedings, claims as well as

governmental investigations and orders (legal proceed-

ings) on a large number of topics, including vehicle

safety, emissions, fuel economy, financial services,

dealer, supplier and other contractual relationships,

intellectual property rights (including but not limited to

patent infringement actions), warranty claims, environ-

mental matters, antitrust matters (including actions for

damages) as well as investor litigation. Product-related

litigation involves claims alleging faults in vehicles.

Some of these claims are asserted by way of class

actions. If the outcome of such legal proceedings is det-

rimental to Mercedes-Benz or such legal proceedings

are settled, the Group may be required to pay substan-

tial compensatory and punitive damages or to under-

take service actions, recall campaigns, monetary penal-

ties or other costly actions, which would adversely

affect the earnings of Mercedes-Benz Group AG. Legal

proceedings and related settlements may also have an

impact on the Company’s reputation.

D.ꢇꢅ

Changes in other operating assets and liabilities

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

Provisions

-ꢀ00

-29

-ꢂꢀꢂ

-ꢂꢄ

Financial instruments

Miscellaneous other assets and liabilities

-ꢀ,ꢀꢂ2

ꢄ,ꢁꢁꢈ

6ꢃꢂ

-

ꢀ,26ꢀ

D.ꢇ1

Cash flows included in cash provided by operating

activities

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

Interest paid

-ꢂ67

ꢀ5ꢁ

-ꢄꢃꢅ

ꢄꢈꢇ

Interest received

Up until the effective date of the spin-off of a majority

interest in Daimler Truck AG to Daimler Truck Holding AG

on 9 December 2021, Daimler Truck AG and its consoli-

dated subsidiaries were group companies of Daimler AG

Dividends received from

equity-method investments

ꢀ,625

28

ꢄ,ꢈꢅꢂ

ꢀꢃ

Dividends received from other

shareholdings

(now Mercedes-Benz Group AG). Insofar as risks result-

ing from the legal proceedings mentioned above materi-

alise, and to the extent that the facts underlying such

risks relate to the aforementioned Truck & Bus compa-

nies, Mercedes-Benz Group AG is entitled to indemnifi-

cation claims. Such claims arise vis-à-vis Daimler

Truck AG based on the hive-down of assets and liabili-

ties of the former Daimler Trucks and Daimler Buses

divisions to Daimler Truck AG in 2019. Vis-à-vis Daimler

Truck Holding AG, such claims arise from the spin-off of

the majority interest in Daimler Truck AG to Daimler

Truck Holding AG in 2021.

D.ꢇꢄ

Changes in liabilities arising from

financing activities

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

Cash flows

-ꢀ7,200

-ꢇ,ꢃꢁꢂ

Deconsolidation of Daimler’s commercial vehi-

cles business

-7,80ꢀ

ꢁ,6ꢂꢁ

255

-

-ꢈ,ꢁꢀꢂ

-ꢃꢅꢆ

Changes in foreign exchange rates

Fair value changes

Other changes

ꢂ0ꢁ

ꢇꢇꢈ

270

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Diesel emission behaviour: governmental

proceedings

exhaust emissions based on the suspicion of potential

violations of, amongst others, the Canadian Environ-

mental Protection Act, as well as undisclosed AECDs

and defeat devices. Mercedes-Benz continues to coop-

erate with the investigating authorities.

As already reported, several authorities and institutions

worldwide were, and still are, active in the form of

inquiries, investigations, procedures and/or orders.

These activities particularly relate to test results, the

emission control systems used in Mercedes-Benz diesel

vehicles and/or the interactions of Mercedes-Benz with

the relevant authorities as well as related legal issues

and implications, including, but not limited to, under

applicable environmental, criminal, consumer protec-

tion and antitrust laws.

In Germany, the Stuttgart public prosecutor’s office

issued a fine notice against Mercedes-Benz in Septem-

ber 2019 based on a negligent violation of supervisory

duties, which became legally binding, thereby conclud-

ing the related administrative offense proceedings

against Mercedes-Benz. The Stuttgart public prosecu-

tor’s office is still conducting criminal investigation pro-

ceedings against Mercedes-Benz employees on the sus-

picion of, amongst others, fraud. In July 2021, the local

court of Böblingen issued penal orders against three

Mercedes-Benz employees with the local court of

Böblingen based on, amongst others, fraud, which have

become final.

In the United States, Mercedes-Benz Group AG and

Mercedes-Benz USA, LLC (MBUSA) reached agreements

in the third quarter of 2020 with various authorities to

settle civil environmental claims regarding the emission

control systems of certain diesel vehicles, which have

become final and effective. The authorities take the

position that Mercedes-Benz failed to disclose Auxiliary

Emission Control Devices (AECDs) in certain of its US

diesel vehicles and that several of these AECDs are ille-

gal defeat devices.

Between 2018 and 2020, the German Federal Motor

Transport Authority (“KBA”) issued subsequent auxiliary

provisions for the EC type approvals of certain

Mercedes-Benz diesel vehicles, and ordered mandatory

recalls as well as, in some cases, stops of the first regis-

tration. In each of those cases, it held that certain cali-

brations of specified functionalities are to be qualified

as impermissible defeat devices. Mercedes-Benz has a

contrary legal opinion on this question. Since 2018,

however, it has (in view of the KBA’s interpretation of

the law as a precautionary measure) implemented a

temporary delivery and registration stop with respect to

certain models, also covering the used car, leasing and

financing businesses, and is constantly reviewing

whether it can lift this delivery and registration stop in

whole or in part. Mercedes-Benz has filed timely objec-

tions against the KBA’s administrative orders mentioned

above. In early 2021, the KBA issued objection orders

(“Widerspruchsbescheide”) in these proceedings,

thereby not following the arguments brought forward by

Mercedes-Benz. Since Mercedes-Benz continues to

As part of these settlements, Mercedes-Benz denies the

allegations by the authorities and does not admit liabil-

ity, but has agreed to, among other things, pay civil pen-

alties, conduct an emission modification programme for

affected vehicles and take certain other measures. The

failure to meet certain of those obligations may trigger

additional stipulated penalties. In the first quarter of

2021, Mercedes-Benz paid the civil penalties, provisions

have been recognised for the emission modification

programme and other measures.

As already reported, in April 201ꢉ, the U.S. Department

of Justice (“DOJ”) requested that Mercedes-Benz con-

duct an internal investigation. Mercedes-Benz con-

ducted such internal investigation in cooperation with

DOJ’s investigation; DOJ’s investigation remains open. In

addition, further US state authorities have opened

investigations pursuant to both state environmental and have a different understanding of the relevant legal pro-

consumer protection laws and have requested docu-

ments and information.

visions, it has filed lawsuits with the competent admin-

istrative court to have the controversial questions at

issue clarified in a court of law. Irrespective of such

objections and the lawsuits that are now pending,

Mercedes-Benz continues to cooperate fully with the

KBA. The new calibrations requested by KBA have been

In Canada, the Canadian environmental regulator Envi-

ronment and Climate Change Canada (“ECCC”) is con-

ducting an investigation in connection with Diesel

271

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

developed by Mercedes-Benz and assessed and

In addition to the abovementioned authorities, national

cartel authorities and other authorities of various for-

eign States, including the South Korean Ministry of Envi-

ronment, the South Korean competition authority (Korea

Fair Trade Commission) and the Seoul public prosecu-

tor’s office (South Korea) are conducting various investi-

gations and/or procedures in connection with Diesel

exhaust emissions.

approved by the KBA; the related recalls have been ini-

tiated. It cannot be ruled out that under certain circum-

stances, software updates may have to be reworked, or

further delivery and registration stops may be ordered

or resolved by the Company as a precautionary meas-

ure, also with regard to the used car, leasing and financ-

ing businesses. In the course of its regular market

supervision, the KBA is routinely conducting further

reviews of Mercedes-Benz vehicles and is asking ques-

tions about technical elements of the vehicles. In addi-

tion, Mercedes-Benz continues to be in a dialogue with

the German Ministry for Digital and Transport (BMDV) to

conclude the analysis of the diesel-related emissions

matter and to further the update of affected customer

vehicles. In light of the aforementioned administrative

orders issued by the KBA, and continued discussions

Mercedes-Benz continues to fully cooperate with the

authorities and institutions.

Diesel emission behaviour: consumer actions

and other lawsuits in the United States, Canada,

Germany and other states

As previously reported, a consolidated class action

against Mercedes-Benz Group AG and MBUSA was

with the KBA and the BMDV, it cannot be ruled out com- pending before the US District Court for New Jersey. The

pletely that additional administrative orders may be

issued in the course of the ongoing and/or further

investigations. Since 1 September 2020, this also

applies to other responsible authorities of other mem-

ber states and the European Commission, which con-

duct market surveillance under the new European Type

Approval Regulation and can take measures upon

assumed non-compliance, irrespective of the place of

the original type approval, and also to the British market

surveillance authority DVSA (Driver and Vehicle Stand-

ards Agency).

plaintiffs alleged that Mercedes-Benz Group AG and

MBUSA used devices that impermissibly impair the

effectiveness of emission control systems in reducing

nitrogen-oxide (NO ) emissions and which cause exces-

X

sive emissions from vehicles with diesel engines. In

addition, plaintiffs alleged that consumers were deliber-

ately deceived in connection with the advertising of

Mercedes-Benz diesel vehicles.

In the third quarter of 2020, Mercedes-Benz Group AG

and MBUSA reached a settlement with plaintiffs’ coun-

sel of this consumer class action. As part of the settle-

ment, Mercedes-Benz Group AG and MBUSA deny the

material factual allegations and legal claims asserted by

the class action plaintiffs, but have agreed to provide

payments to certain current and former diesel vehicle

owners and lessees. The relevant court has granted

final approval of the settlement and issued a final judg-

ment in the case. The estimated costs of the settlement

amount to approximately USD 700 million. In addition,

Mercedes-Benz estimates further expenses of a mid-

three-digit-million euro amount to fulfil the require-

ments of this settlement and the aforementioned set-

tlements with the US authorities. Provisions have been

recognised accordingly.

In the course of its formal investigation into possible

collusion on clean emission technology, the European

Commission sent a statement of objections to

Mercedes-Benz and other automobile manufacturers in

April 2019. In this context, Mercedes-Benz had filed an

application for immunity from fines (leniency applica-

tion) with the European Commission some time ago. On

8

July 2021, the proceedings were closed by way of a

settlement with the European Commission. During the

entire proceedings, Mercedes-Benz Group AG cooper-

ated closely with the European Commission, and the

European Commission granted the company complete

immunity from fines.

272

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

A consumer class action making similar allegations and

a ruling that certain preconditions of alleged consumer

claims are met. Mercedes-Benz Group AG will defend

itself against the federation’s allegations.

seeking similar remedies as to vehicles sold or leased in

Canada was filed against Mercedes-Benz Group AG and

other Group companies in Ontario in April 201ꢉ. In the

fourth quarter of 2021, Mercedes-Benz Group AG and

the other Group companies reached a settlement with

plaintiffs’ counsel of the consumer class action. As part

of the settlement, Mercedes-Benz Group AG and the

other Group companies deny the material factual alle-

gations and legal claims asserted by the class action

plaintiffs, but have agreed to make payments to certain

current and former diesel vehicle owners and lessees.

The estimated costs for this settlement amount to

approximately CAD 250 million (equivalent to approxi-

mately €175 million).

Furthermore, a class action against Mercedes-Benz

Group AG and other Group companies was filed in the

Netherlands on 23 June 2020. The class action makes

allegations comparable to the aforementioned US and

Canadian class actions relating to all Euro 5 and ꢉ diesel

vehicles sold in the EU between 2009 and 2019. The

plaintiff, a foundation under the laws of the Netherlands,

is representing Dutch claimants and seeks certification

of an opt-out Netherlands class (Dutch claimants are

participating in the class action by law). In the course of

the proceedings, other claimants who bought such vehi-

cles in the EU market have the option to declare partici-

pation in the class action (opt-in). Furthermore, the

plaintiff is seeking declarations of law concerning the

customers’ entitlement to nullify or rescind their vehicle

purchase contracts, to demand replacement of their

vehicle and/or to demand damages. After the extension

of the deadline granted by court, two further founda-

tions filed statements of claim in court on 30 December

2020. The court has still to determine the lead plaintiff.

In a separate lawsuit filed by the State of Arizona in Jan-

uary 2019, the plaintiff claims that, amongst others,

Mercedes-Benz Group AG and MBUSA deliberately

deceived consumers in connection with advertising

Mercedes-Benz diesel vehicles. Consumer class actions

containing similar allegations were filed against

Mercedes-Benz Group AG and further Group companies

in the United Kingdom since May 2020 as well as

against Mercedes-Benz Group AG in Israel in February

2

019. In a separate lawsuit filed by the Environmental

Mercedes-Benz Group AG and the respective other

affected companies of the Group regard the lawsuits set

out before as being without merit and will defend itself

against the claims, unless a settlement has already

been reached as described above.

Protection Commission of Hillsborough County, Florida

in September 2020, the plaintiff claims that, amongst

others, Mercedes-Benz Group AG and MBUSA violated

municipal regulations prohibiting vehicle tampering and

other conduct by using alleged devices claimed to

impair the effectiveness of emissions control systems.

In addition, investors from Germany and abroad have

filed lawsuits for damages with the Stuttgart Regional

Court alleging the violation of disclosure requirements

(main proceedings) and also raised out-of-court claims

for damages. The investors allege that Mercedes-Benz

In Germany, a large number of customers of diesel vehi-

cles have filed lawsuits for damages or rescission of

sales contracts. They assert that the vehicles contained

illegal defeat devices and/or showed impermissibly high Group AG did not immediately disclose inside informa-

emission or consumption values. They refer to, in par-

ticular, the German Federal Motor Transport Authority’s

recall orders (see above). Given the current develop-

ment of case numbers, we expect a continued high

number of lawsuits to be filed in this respect. In this

context, the Federation of German Consumer Organisa-

tions (Verbraucherzentrale Bundesverband e.V.) filed a

model declaratory action (Musterfeststellungsklage)

against Mercedes-Benz Group AG with the Stuttgart

Higher Regional Court on 7 July 2021. Such action seeks

tion in connection with the emission behaviour of its

diesel vehicles and that it had made false and mislead-

ing public statements. They further claim that the pur-

chase price of the financial instruments acquired by

them (in particular Mercedes-Benz shares, formerly

Daimler AG shares) would have been lower if Mercedes-

Benz Group AG had complied with its disclosure obliga-

tions. Mercedes-Benz Group AG regards these allega-

tions and claims as being without merit and will defend

itself against them. In January 2021, the Stuttgart

Regional Court issued in the context of the main

273

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

proceedings an order for reference to commence model

Antitrust law proceedings (including actions for

case proceedings in accordance with the Act on Model

Proceedings in Capital Markets Disputes (KapMuG)

before the Stuttgart Higher Regional Court (model case

proceedings). The purpose of the model case proceed-

ings is to reach a decision that is binding for the main

proceedings regarding common factual and legal ques-

tions. The main proceedings before the Stuttgart

Regional Court will be suspended until a decision is

reached on the questions submitted, insofar as they

cannot be dismissed independently of the questions to

damages)

Starting in July 2017, a number of class actions were

filed in the United States and Canada against Mercedes-

Benz Group AG and other manufacturers of automobiles

as well as various of their North American subsidiaries.

Plaintiffs allege to have suffered damages because

defendants engaged in anticompetitive behaviour relat-

ing to vehicle technology, costs, suppliers, markets, and

other competitive attributes, including diesel emissions

control technology, since the 1990s. All pending US

be decided in the model case proceedings. The decision class actions were centralised in one proceeding by the

in the model case proceedings is binding for the sus- Judicial Panel on multidistrict litigation and transferred

pended main proceedings. In December 2021, the Stutt- to the U.S. District Court for the Northern District of Cal-

gart Higher Regional Court determined a model case

plaintiff and announced the model case proceedings in

the German register for model case proceedings. There-

after, multiple investors used the possibility to register

claims in a considerable amount with the model case

ifornia. In 2018, plaintiffs in the US antitrust class action

amended and consolidated their complaints into two

pleadings, one on behalf of consumers and the other on

behalf of dealers. On 23 October 2020, the court

granted motions to dismiss the complaints in their

proceedings in order to suspend the period of limitation. entirety, with prejudice, ending the litigation in the US

Mercedes-Benz Group AG remains of the view to have

duly fulfilled its disclosure obligations under capital

markets law and will defend itself against the investors’

allegations also in these model case proceedings.

district court. On 30 August 2021, the consumer plain-

tiffs withdrew the appeal they had filed, ending their

case. On 2ꢉ October 2021, the US Court of Appeals for

the Ninth Circuit affirmed the dismissal of the dealer

plaintiffs’ claims. Mercedes-Benz Group AG and MBUSA

regard the US and Canadian lawsuits as being without

merit, and will continue to defend themselves against

the claims. This contingent liability cannot currently be

measured.

Accounting assessment of the legal proceedings in

connection with diesel emission behaviour

With respect to the legal proceedings described in the

two preceding chapters, in accordance with IAS 37.92

no further information is disclosed with respect to

whether, or to what extent, provisions have been recog-

nised and/or contingent liabilities have been disclosed,

so as not to prejudice Mercedes-Benz’s position. For

recognised provisions, this does not apply to the extent

a settlement has been reached or a proceeding has

been concluded. A contingent liability from the class

actions in the Netherlands cannot currently be meas-

ured.

In the course of its formal investigation into possible

collusion on clean emission technology, the European

Commission sent a statement of objections to

Mercedes-Benz and other automobile manufacturers in

April 2019. In this context, Mercedes-Benz had filed a

leniency application with the European Commission

some time ago. On 8 July 2021, the proceedings were

closed by way of a settlement with the European Com-

mission. During the entire proceedings, Mercedes-Benz

Group AG cooperated closely with the European Com-

mission, and the European Commission granted the

company complete immunity from fines.

274

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Consolidated Financial Statements

Following the settlement decision by the European

On 18 October 2021 a number of Australian Mercedes-

Benz dealers lodged a claim against Mercedes-Benz

Australia/Pacific Pty Ltd (“MBAuP”) with a Federal Court

in Australia. They allege that MBAuP forced the dealers

to accept a change in their business model from a deal-

ership model to an agency model and thus deprived

them of the goodwill they created through their invest-

ments in the Australian Mercedes-Benz dealership net-

work. They seek reinstatement of the dealership model

or, alternatively, compensation for the damage they

allegedly incurred. MBAuP considers those claims to be

without merit and will defend itself against the claims.

Commission adopted on 19 July 201ꢉ, concluding the

trucks antitrust proceedings, Mercedes-Benz Group AG

and Daimler Truck AG are facing customers’ claims for

damages to a considerable degree. Respective legal

actions, class actions and other forms of legal redress

have been initiated in various states in and outside of

Europe and should further be expected. As set out at

the beginning of the note “Legal Proceedings”,

Mercedes-Benz Group AG is entitled to indemnification

claims against Daimler Truck Holding AG and Daimler

Truck AG, should the aforementioned claims materialise.

Consequently, as Mercedes-Benz Group AG is no longer

exposed to financial risks related to the damages claims

described in this paragraph, it will no longer report

about these proceedings.

Accounting estimates and management judgments

relating to all legal proceedings

Merecedes-Benz Group AG and its subsidiaries recog-

nise provisions in connection with pending or threat-

ened proceedings to the extent a loss is probable and

can be reasonably estimated. Such provisions are rec-

ognised in the Group’s consolidated financial state-

ments and are based on estimates. If quantifiable, con-

tingent liabilities in connection with legal proceedings

are disclosed in the Group’s consolidated financial

statements. Risks resulting from legal proceedings

sometimes cannot be assessed reliably or only to a lim-

ited extent. Consequently, provisions recognised for

some legal proceedings may turn out to be insufficient

once such proceedings have ended. Mercedes-Benz

may also become liable for payments in legal proceed-

ings for which no provisions were recognised and/or

Other legal proceedings

As already reported, class actions in connection with

Takata airbags are pending in Canada, the United States,

Israel, and Argentina. The lawsuits are based on allega-

tions that, along with Takata entities and many other

companies that sold vehicles equipped with Takata air-

bag inflators, Mercedes-Benz entities and others were

allegedly negligent in selling such vehicles, purportedly

not recalling them quickly enough, and failing to warn

consumers about a potential defect and/or to provide

an adequate replacement airbag inflator. One of the

complaints in the United States also asserts claims by

automotive recyclers who allege injury because they are

not able to re-sell salvaged airbag inflators that are sub- contingent liabilities were disclosed. Uncertainty exists

ject to the Takata recall. Mercedes-Benz Group AG con-

tinues to regard all these claims as being without merit,

and the Mercedes-Benz Group affiliates respectively

affected will further defend themselves against the

claims. Contingent liabilities were disclosed to a low

extent for this topic.

with regard to the amounts or due dates of possible

cash outflows. Although the final result of any such pro-

ceedings could materially affect Mercedes-Benz’s oper-

ating results and cash flows for a particular reporting

period, Mercedes-Benz believes that it should not exert

a sustained influence on the Group’s financial position.

275

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

3

ꢄ. Contingent liabilities and other financial

obligations

Contingent liabilities

At 31 December 2021, the best estimate for obligations

from contingent liabilities was €2,747 million (2020:

€2,832 million). The contingent liabilities are mainly

related to the legal proceedings described in Note 31.

In 2019, Mercedes-Benz Group AG hived down assets

and liabilities of the Mercedes-Benz Cars & Vans seg-

ment into Mercedes-Benz AG and of the Daimler Trucks

&

Buses segment into Daimler Truck AG. The spin-off

and hive-down of the Daimler commercial vehicle busi-

ness results in a subsequent liability relationship out-

side the Group pursuant to Section 133 Subsections 1

and 3 of the German Transformation Act (UmwG). See

Note 38 for further information.

Other financial obligations

At 31 December 2021, other financial obligations exist

from the acquisition of intangible assets, property,

plant and equipment and lease property of

€4,098 million (2020: €3,ꢉ98 million).

In addition, the Mercedes-Benz Group had issued

irrevocable loan commitments at 31 December 2021.

These loan commitments had not been utilised as of

that date. Further information with respect to these

commitments is provided in Note 34.

27ꢉ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

3

3. Financial instruments

Carrying amounts and fair values of

financial instruments

The carrying amounts and fair values of financial instru-

ments presented in the following tables refer to Group

amounts, including assets and liabilities held for sale.

Figures for gains or losses and changes in financial

instruments refer to continuing and discontinued activi-

ties.

Table



D.73 shows the carrying amounts and fair values

of the respective classes of the Group’s financial instru-

ments.

The fair value of a financial instrument is the price that

would be received to sell an asset or paid to transfer a

liability in an orderly transaction between market partic-

ipants at the measurement date. Given the varying

influencing factors, the reported fair values can only be

viewed as indicators of the prices that may actually be

achieved on the market.

D.ꢇ3

Carrying amounts and fair values of financial instruments

At ꢂꢀ December 202ꢀ

At ꢂꢄ December ꢀꢁꢀꢁ

Carrying

amount

Fair value

amount

Fair value

In millions of euros

Financial assets

Receivables from financial services

82,85ꢂ

7,70ꢂ

2ꢂ,ꢀ82

7,579

2,ꢂ6ꢁ

ꢁ,9ꢂ7

278

8ꢁ,ꢂ86

7,70ꢂ

2ꢂ,ꢀ82

7,579

2,ꢂ6ꢁ

ꢁ,9ꢂ7

278

ꢇ6,ꢄꢅꢃ

ꢄꢁ,6ꢆꢇ

ꢀꢂ,ꢁꢆꢅ

6,ꢂꢇꢈ

ꢂ,ꢂꢄꢆ

ꢀ,6ꢃꢈ

ꢆꢀ6

ꢇꢅ,ꢄꢄꢃ

ꢄꢁ,6ꢆꢇ

ꢀꢂ,ꢁꢆꢅ

6,ꢂꢇꢈ

ꢂ,ꢂꢄꢆ

ꢀ,6ꢃꢈ

ꢆꢀ6

Trade receivables

Cash and cash equivalents

Marketable debt securities and similar investments

Recognised at fair value through other comprehensive income

Recognised at fair value through profit or loss

Measured at cost

Other financial assets

Equity instruments and debt instruments

Recognised at fair value through other comprehensive income

Recognised at fair value through profit or loss

Other financial assets recognised at fair value through profit or loss

Derivative financial instruments used in hedge accounting

Other receivables and miscellaneous other financial assets

ꢀ,707

ꢀ,0ꢁ2

665

ꢀ,707

ꢀ,0ꢁ2

665

ꢄ,ꢂꢄꢄ

ꢇꢆꢀ

ꢄ,ꢂꢄꢄ

ꢇꢆꢀ

ꢂ6ꢇ

6ꢀ

ꢈꢆ

ꢀ,020

ꢂ,258

ꢀ,020

ꢂ,258

ꢀ28,896

ꢀ,ꢄꢆꢃ

ꢀ,ꢇꢆꢀ

ꢄꢆꢀ,ꢈꢃꢄ

ꢀ,ꢄꢆꢃ

ꢀ,ꢇꢆꢀ

ꢄꢆꢆ,6ꢅꢄ

ꢀ

27,ꢂ6ꢂ

Financial liabilities

Financing liabilities

ꢀ2ꢂ,ꢂꢁꢂ

ꢀ0,682

ꢀ25,7ꢂ7

ꢀ0,682

ꢄꢆꢀ,ꢁꢇꢃ

ꢄꢀ,ꢂꢈꢅ

ꢄꢆꢆ,ꢇꢈꢀ

ꢄꢀ,ꢂꢈꢅ

Trade payables

Other financial liabilities

Financial liabilities recognised at fair value through profit or loss

Derivative financial instruments used in hedge accounting

Miscellaneous other financial liabilities

Contract and refund liabilities

ꢀꢂ0

ꢀ,ꢁ20

6,26ꢁ

ꢀꢂ0

ꢀ,ꢁ20

6,26ꢁ

ꢆꢁ

ꢂ6ꢈ

ꢆꢁ

ꢂ6ꢈ

ꢅ,ꢁ6ꢃ

Obligations from sales transactions

ꢂ,860

ꢆ,6ꢀꢈ

ꢀꢁ5,699

ꢀꢁ8,09ꢂ

ꢄ6ꢈ,ꢃꢈꢀ

ꢄꢈꢁ,ꢆꢆꢇ

277

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

The fair values of financial instruments were calculated

investments recognised at fair value through other com-

prehensive income comprise further investments not

material on an individual basis.

on the basis of market information available on the bal-

ance sheet date. The following methods and premises

were used:

Marketable debt securities and equity instruments rec-

ognised at fair value were measured using quoted mar-

ket prices at the end of the reporting period. If quoted

market prices are not available for these debt and

equity instruments, fair value measurement is based on

inputs that are either directly or indirectly observable in

active markets. Fair values are calculated using recog-

nised financial valuation models such as discounted

cash-flow models or multiples.

Receivables from financial services

The fair values of receivables from financial services

with variable interest rates are estimated to be equal to

the respective carrying amounts, because the agreed

upon interest rates and those available in the market do

not significantly differ. The fair values of receivables

from financial services with fixed interest rates are

determined on the basis of discounted expected future

cash flows.

Oꢎꢓꢋ ꢏ ꢒꢚꢌ ꢔꢌ ꢘꢚꢔꢗ ꢔꢐꢐꢋ ꢎꢐ ꢏꢋ ꢘꢑꢝꢌ ꢚꢐꢋ ꢍ ꢔꢎ ꢒꢔꢚꢏ ꢞꢔꢗꢙꢋ

ꢎꢓꢏꢑꢙꢝꢓ ꢟꢏꢑꢒꢚꢎ ꢑꢏ ꢗꢑꢐꢐ include derivative financial

instruments not used in hedge accounting. These finan-

cial instruments as well as ꢍꢋ ꢏꢚꢞꢔꢎꢚꢞꢋ ꢒꢚꢌ ꢔꢌ ꢘꢚꢔꢗ ꢚꢌ ꢐꢎꢏꢙ-

ꢊ ꢋ ꢌ ꢎꢐ ꢙꢐꢋ ꢍ ꢚꢌ ꢓꢋ ꢍꢝꢋ ꢔꢘꢘꢑꢙꢌ ꢎꢚꢌ ꢝ comprise:

Discounting is based on the current interest rates at

which similar loans with identical terms could have

been obtained at 31 December 2021 and 31 December

2020.

Trade receivables and cash and cash equivalents

Due to the short terms of these financial instruments

and the fundamentally lower credit risk, it is assumed

that their fair values are equal to the carrying amounts.

− derivative currency hedging contracts; the fair values

of cross-currency interest-rate swaps are determined

on the basis of the discounted estimated future cash

flows (taking account of credit premiums and default

risks) using market interest rates appropriate to the

remaining terms of the financial instruments. The val-

uation of currency forwards is based on market

Marketable debt securities and similar investments,

other financial assets

Mꢔꢏꢕꢋ ꢎꢔꢖꢗꢋ ꢍꢋ ꢖꢎ ꢐꢋ ꢘꢙꢏꢚꢎꢚꢋ ꢐ are recognised at fair value

through other comprehensive income or at fair value

through profit or loss. Similar investments are measured

at amortised cost and are not included in the measure-

ment hierarchy, as their carrying amounts are a reasona-

ble approximation of fair value due to the short terms of

these financial instruments and the fundamentally lower

credit risk.

quotes of forward curves; currency options are meas-

ured with option-pricing models using market data.

− derivative interest-rate hedging contracts; the fair val-

ues of interest-rate hedging instruments (e.g., inter-

est-rate swaps) are calculated on the basis of the dis-

counted estimated future cash flows (taking account

of credit premiums and default risks) using market

interest rates appropriate to the remaining terms of

the financial instruments.

Eꢛꢙꢚꢎꢜ Iꢌ ꢐꢎꢏꢙꢊ ꢋ ꢌ ꢎꢐ are recognised at fair value through

other comprehensive income or at fair value through

profit or loss.

− derivative commodity hedging contracts; the fair val-

ues of commodity hedging contracts (e.g., commodity

forwards) are determined on the basis of current ref-

erence prices with consideration of forward premiums

and discounts and default risks.

Eꢛꢙꢚꢎꢜ ꢚꢌ ꢐꢎꢏꢙꢊ ꢋ ꢌ ꢎꢐ recognised through other compre-

hensive income are included in table



D.73 and pri-

marily comprise the shares in Sila Nanotechnologies

Inc., the tranche of shares in Aston Martin Lagonda

Global Holdings plc, which is recognised at fair value

through other comprehensive income, and the invest-

ments in BAIC BluePark New Energy Technology Co., Ltd.

and Farasis Energy (Ganzhou) Co., Ltd. The remaining

278

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Oꢎꢓꢋ ꢏ ꢒꢚꢌ ꢔꢌ ꢘꢚꢔꢗ ꢏꢋ ꢘꢋ ꢚꢞꢔꢖꢗꢋ ꢐ ꢔꢌ ꢍ ꢑꢎꢓꢋ ꢏ ꢒꢚꢌ ꢔꢌ ꢘꢚꢔꢗ

Other financial liabilities

ꢔꢐꢐꢋ ꢎꢐ are carried at amortised cost. Because of the

predominantly short maturities and the fundamentally

lower credit risk of these financial instruments, it is

assumed that the fair values approximate the carrying

amounts.

Fꢚꢌ ꢔꢌ ꢘꢚꢔꢗ ꢗꢚꢔꢖꢚꢗꢚꢎꢚꢋ ꢐ ꢏꢋ ꢘꢑꢝꢌ ꢚꢐꢋ ꢍ ꢔꢎ ꢒꢔꢚꢏ ꢞꢔꢗꢙꢋ ꢎꢓꢏꢑꢙꢝꢓ

ꢟꢏꢑꢒꢚꢎ ꢑꢏ ꢗꢑꢐꢐ comprise derivative financial instru-

ments not used in hedge accounting. For information

regarding these financial instruments as well as ꢍꢋ ꢏꢚꢞꢔ-

ꢎꢚꢞꢋ ꢒꢚꢌ ꢔꢌ ꢘꢚꢔꢗ ꢚꢌ ꢐꢎꢏꢙꢊ ꢋ ꢌ ꢎꢐ ꢙꢐꢋ ꢍ ꢚꢌ ꢓꢋ ꢍꢝꢋ ꢔꢘꢘꢑꢙꢌ ꢎꢚꢌ ꢝ,

see the notes above under marketable debt securities

and similar investments, other financial assets.

Financing liabilities

The fair values of bonds, loans, commercial paper,

deposits in the direct banking business and liabilities

from ABS transactions are calculated as present values

of the estimated future cash flows (taking account of

credit premiums and credit risks). Market interest rates

for the appropriate terms are used for discounting.

Mꢚꢐꢘꢋ ꢗꢗꢔꢌ ꢋ ꢑꢙꢐ ꢑꢎꢓꢋ ꢏ ꢒꢚꢌ ꢔꢌ ꢘꢚꢔꢗ ꢗꢚꢔꢖꢚꢗꢚꢎꢚꢋ ꢐ are carried

at amortised cost. Because of the predominantly short

maturities of these financial instruments, it is assumed

that the fair values approximate the carrying amounts.

Offsetting of financial instruments

Trade payables

Due to the short maturities of these financial instru-

ments, it is assumed that their fair values are equal to

the carrying amounts.

The Group concludes derivative transactions in accord-

ance with the master netting arrangements (framework

agreement) of the International Swaps and Derivatives

Association (ISDA) and comparable national framework

agreements. However, these arrangements do not meet

the criteria for netting in the Consolidated Statement of

Financial Position, as they allow netting only in the case

of future events such as default or insolvency on the

part of the Group or the counterparty.

Reverse factoring agreements did not change the rele-

vant characteristics of a trade payable for the Group for

the liabilities concerned. As a result, there were no

reclassifications of these trade payables to financing

liabilities.

Contract and refund liabilities

Contract and refund liabilities include obligations from

sales transactions that qualify as financial instruments.

Table  D.74 shows the carrying amounts of the derivative

financial instruments subject to the described arrange-

ments as well as the possible financial effects of netting

in accordance with the master netting arrangements.

Obligations from sales transactions should generally be

regarded as short term. Due to the short maturities of

these financial instruments, it is assumed that their fair

values are equal to their carrying amounts.

Measurement hierarchy

Table



D.75 provides an overview of the classification

into measurement hierarchies of financial assets and

liabilities recognised at fair value (according to IFRS 13).

At the end of each reporting period, the Group reviews

the necessity of reclassification between the measure-

ment hierarchies. In 2021 the investment in ChargePoint,

Inc. which is recognised at fair value through profit or

loss has been reclassified from Level 2 to Level 1 as a

result of the initial public offering of this company.

For the determination of the credit risk from derivative

financial instruments which are allocated to Level 2

measurement hierarchy, portfolios managed on basis of

net exposure are applied.

279

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements



Table D.76 shows into which measurement hierarchies

according to IFRS 13) the fair values of the financial

(

assets and liabilities are classified which are not recog-

nised at fair value in the Consolidated Statement of

Financial Position.

D.ꢇ4

Disclosure for recognised financial instruments that are subject to an enforceable

master netting arrangement or similar agreement

ꢂꢀ December 202ꢀ

ꢂꢄ December ꢀꢁꢀꢁ

Gross and net

amounts of

financial

instruments

in the

Consolidated

Statement of

Financial

Gross and

net amounts

of financial

instruments

in the

Amounts

subject

to a master

netting

Consolidated

Statement of

Amounts

subject to a

Net

Financial master netting

Net

Position

arrangement

amounts

Position

arrangement

amounts

In millions of euros

Other financial assets¹

ꢄ,ꢁꢅꢄ

ꢄ,ꢃꢃꢁ

-ꢆꢈꢈ

6ꢁꢆ

ꢀ,ꢀꢄꢇ

ꢆꢁꢈ

-ꢀꢈꢁ

ꢄ,ꢇꢆꢇ

ꢄꢂꢈ

Other financial liabilities²

ꢄ,ꢁꢈꢂ

1

The other financial assets which are subject to a master netting arrangement comprise derivative financial instruments that are included in hedge accounting and financial assets recog-

nised at fair value through profit or loss (see Note 17).

2

The other financial liabilities which are subject to a master netting arrangement comprise derivative financial instruments that are included in hedge accounting and financial liabilities

recognised at fair value through profit or loss (see Note 26).

280

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢇꢃ

Measurement hierarchy of financial assets and liabilities recognised at fair value

At ꢂꢀ December 202ꢀ

At ꢂꢄ December ꢀꢁꢀꢁ

Total

Level ꢄ^ꢄ

Level ꢀ^ꢀ

Level ꢂ^ꢂ

Total

Level ꢄ^ꢄ

Level ꢀ^ꢀ

Level ꢂ^ꢂ

In millions of euros

Financial assets recognised at fair value

Marketable debt securities

7,ꢂ0ꢀ

2,ꢂ6ꢁ

6,ꢂ95

ꢀ,ꢁ68

906

896

-

ꢃ,ꢇꢈꢄ

ꢂ,ꢂꢄꢆ

ꢆ,ꢀꢆꢂ

ꢄ,ꢃꢇꢁ

ꢄ,ꢈꢀꢅ

ꢄ,ꢈꢀꢆ

-

Recognised at fair value through other

comprehensive income

Recognised at fair value through profit or

loss

ꢁ,9ꢂ7

ꢀ,707

ꢁ,927

850

ꢀ0

-

ꢀ,6ꢃꢈ

ꢄ,ꢂꢄꢄ

ꢀ,6ꢃꢂ

ꢈꢂ6

ꢆ

-

Equity instruments and debt instruments

227

6ꢂ0

ꢀꢈ6

ꢀꢇꢇ

Recognised at fair value through other

comprehensive income

ꢀ,0ꢁ2

665

6ꢁꢂ

207

-

ꢀꢁ5

82

25ꢁ

ꢂ76

ꢀ

ꢇꢆꢀ

ꢂ6ꢇ

ꢈꢆ

66ꢃ

ꢈꢄ

-

ꢄꢃ6

ꢄꢀꢁ

ꢈꢂ

ꢄꢀꢄ

ꢄꢈꢅ

ꢄ

Recognised at fair value through profit or

loss

Other financial assets recognised at fair value

through profit or loss

6ꢀ

60

Derivative financial instruments used in

hedge accounting

ꢀ,020

-

ꢀ,020

2,2ꢀꢂ

-

ꢀ,ꢄꢆꢃ

ꢇ,ꢃꢁꢄ

-

ꢀ,ꢄꢆꢃ

ꢆ,ꢀꢀꢀ

-

ꢀ0,089

7,2ꢁ5

6ꢂꢀ

ꢆ,ꢇꢈꢇ

ꢂꢁꢁ

Financial liabilities recognised at fair value

through profit or loss

ꢀꢂ0

-

ꢀꢂ0

-

ꢆꢁ

-

ꢆꢁ

-

Derivative financial instruments used in

hedge accounting

ꢀ,ꢁ20

-

ꢀ,ꢁ20

ꢀ,550

-

ꢂ6ꢈ

ꢆꢁꢈ

-

ꢂ6ꢈ

ꢆꢁꢈ

-

ꢀ,550

1

Fair value measurement is based on quoted prices (unadjusted) in active markets for these or identical assets or liabilities.

2

3

Fair value measurement is based on inputs that are observable on active markets either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Fair value measurement is based on inputs for which no observable market data is available.

281

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢇꢆ

Measurement hierarchy of financial assets and liabilities not recognised at fair value

At ꢂꢀ December 202ꢀ

At ꢂꢄ December ꢀꢁꢀꢁ

Total

Level ꢄ^ꢄ

Level ꢀ^ꢀ

Level ꢂ^ꢂ

Total

Level ꢄ^ꢄ

Level ꢀ^ꢀ

Level ꢂ^ꢂ

In millions of euros

Fair values of

financial assets

measured at cost

Receivables from

financial services

8ꢁ,ꢂ86

-

8ꢁ,ꢂ86

-

ꢇꢅ,ꢄꢄꢃ

-

ꢇꢅ,ꢄꢄꢃ

-

Fair values of

financial liabilities

measured at cost

Financing liabilities

ꢀ25,7ꢂ7

68,6ꢁ5

ꢀ8,ꢁ25

ꢂ8,667

60,702

60,ꢀ57

5ꢁ5

65,0ꢂ5

8,ꢁ88

-

ꢄꢆꢆ,ꢇꢈꢀ

ꢈꢇ,ꢀꢃꢆ

ꢄ6,ꢈꢀꢈ

ꢆꢅ,ꢇꢇꢄ

6ꢇ,ꢆ6ꢅ

6ꢇ,ꢁꢅꢂ

ꢂꢅꢃ

ꢈꢃ,ꢃꢁꢆ

ꢄꢁ,ꢄꢈꢄ

ꢄ6,ꢂꢆꢀ

ꢆꢅ,ꢇꢇꢄ

-

thereof bonds

thereof liabilities from ABS transactions

thereof other financing liabilities

ꢀ7,880

ꢂ8,667

-

1

Fair value measurement is based on quoted prices (unadjusted) in active markets for these or identical assets or liabilities.

2

3

Fair value measurement is based on inputs that are observable on active markets either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Fair value measurement is based on inputs for which no observable market data is available.

282

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Consolidated Financial Statements

Measurement categories



The table D.77 does not include the carrying amounts

The carrying amounts of financial instruments according

of derivative financial instruments used in hedge

accounting as these financial instruments are not

assigned to a measurement category.

to measurement categories are shown in table



D.77.

D.ꢇꢇ

Net gains or losses

Carrying amounts of financial instruments

according to measurement categories



Table D.78 shows the net gains/losses on financial

instruments included in the Consolidated Statement of

Income for the continuing and discontinued operations

At ꢂꢄ December

2

02ꢀ

ꢀꢁꢀꢁ

(excluding derivative financial instruments used in

In millions of euros

hedge accounting).

Assets

Net gains/losses on equity and debt instruments recog-

nised at fair value through profit or loss primarily com-

prise gains and losses attributable to changes in the fair

values of these instruments.

Financial assets measured

at (amortised) cost

96,955

62,5ꢂꢁ

7,70ꢂ

ꢄꢁꢂ,ꢂꢁꢅ

66,ꢀꢆꢂ

ꢄꢁ,6ꢆꢇ

ꢀꢂ,ꢁꢆꢅ

Receivables from financial services¹

Trade receivables

Cash and cash equivalents

2ꢂ,ꢀ82

Net gains/losses on other financial assets and liabilities

recognised at fair value through profit or loss comprise

gains and losses attributable to changes in their fair val-

ues.

Marketable debt securities and similar

investments

278

ꢂ,258

ꢂ,ꢁ06

ꢆꢀ6

ꢀ,ꢇꢆꢀ

ꢆ,ꢀꢃ6

Other receivables and miscellaneous other

financial assets

Financial assets recognised at fair value

through other comprehensive income

Net gains/losses on equity instruments recognised at

fair value through other comprehensive income primar-

ily comprise dividend payments.

Marketable debt securities and similar

investments

2,ꢂ6ꢁ

ꢀ,0ꢁ2

ꢂ,ꢂꢄꢆ

ꢇꢆꢀ

Equity and debt instruments

Net gains/losses on other financial assets recognised at

fair value through other comprehensive income are pri-

marily attributable to the effects of currency translation.

Financial assets recognised

at fair value through profit or loss

5,66ꢂ

ꢂ,ꢄꢁꢁ

Marketable debt securities and similar

investments

ꢁ,9ꢂ7

665

ꢀ,6ꢃꢈ

ꢂ6ꢇ

Equity and debt instruments

Net gains/losses on financial assets measured at (amor-

tised) cost (excluding the interest income/expense

shown below) primarily comprise impairment losses

Other financial assets recognised at fair value

2

through profit or loss

6ꢀ

ꢈꢆ

(

€

including reversals of impairment losses) of minus

223 million (2020: minus €824 million) that are

Liabilities

Financial liabilities

measured at (amortised) cost

charged to cost of sales, selling expenses and other

financial income/expense, net. Foreign currency gains

and losses are also included.

ꢀꢁꢁ,ꢀꢂꢁ

ꢀ0,682

ꢀ2ꢂ,ꢂꢁꢂ

6,2ꢁ9

ꢄ66,ꢁ66

ꢄꢀ,ꢂꢈꢅ

ꢄꢆꢀ,ꢁꢇꢃ

ꢈ,ꢇ66

Trade payables

Financing liabilities³

Miscellaneous other financial liabilities⁴

Obligations from sales transactions

Financial liabilities recognised at fair value

Net gains/losses on financial liabilities measured at

ꢂ,860

ꢆ,6ꢀꢈ

(amortised) cost (excluding the interest income/expense

shown below) primarily comprise the effects of currency

translation.

2

through profit or loss

ꢀꢂ0

ꢆꢁ

1

This does not include lease receivables of €20,319 million (2020: €29,942 million) as

these are not assigned to a measurement category.

2

3

4

Financial instruments classified as held for trading purposes. These figures comprise

financial instruments that are not used in hedge accounting.

This does not include liabilities from lease transactions of €2,562 million

(

2020: €3,747 million) as these are not assigned to a measurement category.

This does not include liabilities from financial guarantees of €15 million

2020: €99 million) as these are not assigned to a measurement category.

(

283

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢇꢈ

D.ꢇꢉ

Net gains/losses

Total interest income and total interest expense

2

02ꢀ

ꢀꢁꢀꢁ

202ꢀ

ꢀꢁꢀꢁ

In millions of euros

Equity and debt instruments recognised at fair

value through profit or loss

Total interest income

5,ꢀ06

5,09ꢂ

ꢃ,ꢀ6ꢄ

ꢃ,ꢀꢄꢁ

205

27

ꢂ

-ꢂꢁ

ꢄꢅꢀ

ꢄ

thereof from financial assets and liabilities

measured at (amortised) costs

Other financial assets and financial liabilities

recognised at fair value through profit or loss¹

thereof from financial assets recognised at fair

value through other comprehensive income

Equity instruments recognised at fair value

through other comprehensive income

ꢀꢂ

ꢃꢄ

Total interest expense

-2,279

-ꢀ,6ꢃꢅ

Other financial assets recognised at fair value

through other comprehensive income

thereof from financial assets and liabilities

measured at (amortised) costs

-8

-ꢄ

-2,279

-ꢀ,6ꢃꢅ

Financial assets measured at (amortised) cost

Financial liabilities measured at

66

-ꢄ,ꢀꢄꢇ

thereof from financial assets recognised at fair

value through other comprehensive income

-

(amortised) cost

ꢀ52

-ꢄꢁꢂ

1

Financial instruments classified as held for trading; these amounts relate to financial

instruments that are not used in hedge accounting.

Information on derivative financial instruments

Use of derivatives

Total interest income and total interest expense

Total interest income and total interest expense of the

continuing and discontinued operations for financial

assets or financial liabilities that are not recognised at

fair value through profit or loss are shown in table

The Mercedes-Benz Group uses derivative financial

instruments exclusively for hedging financial risks that

arise from its operating or financing activities or from its

liquidity management. These are mainly interest-rate

risks, currency risks and commodity-price risks, which

have been defined as risk categories. For these hedging

purposes, the Group mainly uses currency forward

transactions, cross-currency interest-rate swaps, inter-

est-rate swaps, options and commodity forwards.



D.79.

See Note 1 for qualitative descriptions of accounting for

and presentation of financial instruments (including

derivative financial instruments).



Table D.80 shows the amounts for the transactions

designated as hedging instruments.

284

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢈꢅ

Amounts for the transactions designated as hedging instruments

Commodity

risk

Foreign-currency risk

Interest-rate risk

Hedges of net

investments

Cash-flow

hedges¹

in foreign

operations

Cash-flow

hedges^ꢀ

Fair-value

hedges²

Cash-flow

hedges¹

In millions of euros

3

1 December ꢄꢅꢄ1

Carrying amount of the hedging instruments

Other financial assets current

5ꢂ

ꢀꢁ0

-

ꢁ6

200

ꢁ6

2ꢁ

55ꢀ

ꢀ0

5

ꢀ

-

Other financial assets non-current

Other financial liabilities current

277

Other financial liabilities non-current

ꢀ,0ꢁ2

ꢂ7

8

Fair value changes³

-ꢀ,76ꢂ

-

266

-7ꢀ7

-

3

1 December ꢄꢅꢄꢅ

Carrying amount of the hedging instruments

Other financial assets current

ꢀ6ꢆ

ꢂꢇꢀ

ꢃꢄ

-

ꢄꢆ

6ꢈ

ꢄꢀꢀ

ꢄ,ꢀꢆꢇ

ꢄꢄ

ꢀꢂ

ꢄꢆ

ꢀ

Other financial assets non-current

Other financial liabilities current

ꢃꢄ

Other financial liabilities non-current

ꢄꢁꢈ

ꢄꢀꢃ

ꢀꢁ

-

Fair value changes³

ꢄ,ꢀꢂꢁ

-

ꢈꢀ

ꢈꢁꢇ

ꢀꢇ

1

2

3

Includes the following instrument types: currency forwards, currency options, currency swaps, commodity forwards.

Includes the following instrument types: interest-rate swaps, cross-currency interest-rate swaps.

Gains and losses from hedging instruments used for recognising hedge ineffectiveness.

285

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Fair-value hedges

D.ꢈꢄ

The Group uses fair-value hedges primarily for hedging

interest-rate risks.

Ineffectiveness of fair-value hedges

Interest-rate risk

2

02ꢀ

ꢀꢁꢀꢁ

The amounts of the items hedged with fair-value hedges

In millions of euros

are included in table



D.81.

Cost of sales

-

The amounts relating to hedge ineffectiveness for items

designated as fair-value hedges are shown in table

Interest expense

-ꢂ



D.82.

Cash-flow hedges and hedges of net investments in

foreign operations

D.ꢈ1

Fair-value hedges

The Group uses cash-flow hedges for hedging currency

risks, interest-rate risks and commodity-price risks.

Interest-rate risk

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

The Group also partially hedges the foreign-currency risk

of selected investments with the application of deriva-

tive or non-derivative financial instruments.

Carrying amounts of the hedged items

Financing liabilities current

ꢁ,ꢁꢂꢂ

ꢄꢀ,ꢆꢀꢆ

ꢄꢅ,ꢅꢃ6

The amounts related to items designated as cash-flow

hedges and as hedges of net investments in foreign

Financing liabilities non-current

thereof hedge adjustments

20,ꢁ0ꢁ

operations are shown in table



D.83.

Financing liabilities current

8

558

7ꢀ7

ꢂꢁꢁ

ꢅꢅꢀ

Financing liabilities non-current

Fair-value changes of the hedged items¹

The gains and losses on items designated as cash-flow

hedges as well as the amounts relating to hedge inef-

fectiveness are included in table

-ꢈꢄꢀ

Accumulated amount of hedge adjustments

from inactive hedges remaining in the

statement of financial position



D.84.

-ꢂꢀ

ꢀ6

1

Fair-value changes of the hedged items used for recognising hedge ineffectiveness.

28ꢉ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢈ3

Cash-flow hedges and hedges of net investments in foreign operations

2

02ꢀ

ꢀꢁꢀꢁ

Foreign-

currency

risk

Foreign-

currency

risk

Interest- Commodity

rate risk

risk

rate risk

risk

In millions of euros

Fair-value changes of the hedged items¹

ꢀ,755

-266

-

-ꢄ,ꢄꢇꢀ

-ꢈꢀ

-ꢂꢁ

Thereof hedges of net investments in foreign operations

-

Balance of the reserves for derivative

financial instruments (before taxes)

Continuing hedges

-959

-

ꢀ62

-

5

2

-

ꢆꢇꢄ

-ꢀꢅ

-ꢄꢀꢆ

-

ꢂꢅ

-ꢃ

-

Thereof hedges of currency risks in the automotive business²

Discontinued/terminated hedges

-268

-270

-ꢀ0

-ꢀꢈꢁ

-

Thereof hedges of net investments in foreign operations

1

2

Fair-value changes of the hedged items used for recognising hedge ineffectiveness.

Further information is provided in the section on exchange-rate risk in Note 34.

287

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢈ4

Gains and losses on cash-flow hedges and hedges of net investments in foreign operations

Commodity

risk

Foreign-currency risk

Interest-rate risk

In millions of euros

Other

financial

income/

expense,

net

Line item in the

Statement of Income

in which the ineffectiveness and the

reclassifications are included

Cost of

sales

Cost of

sales

Interest

expense

Cost of

sales

Revenues

ꢄꢅꢄ1

Gains and losses recognised in other

comprehensive income

-ꢀ,676

-8

-79

-

ꢀ02

ꢀ6ꢁ

-

Hedge ineffectiveness recognised in the

Statement of Income

-

Reclassification of hedge effectiveness from other

comprehensive income to the Statement of Income

For hedges for which the hedged future cash flows are no longer

expected to occur

-ꢀ

ꢂꢁ

-ꢀ

-

For hedges that have been transferred because the hedged item has

affected profit or loss

ꢂꢁꢀ

-ꢀꢁ

ꢁ2

ꢄꢅꢄꢅ

Gains and losses recognised in other

comprehensive income

ꢇꢄꢅ

ꢆꢆ

ꢀꢁ

ꢆ

ꢀꢆꢆ

ꢃꢂ

ꢄꢇ

ꢂꢁ

-ꢄ

Hedge ineffectiveness recognised in the

Statement of Income

-

Reclassification of hedge effectiveness from other

comprehensive income to the Statement of Income

For hedges for which the hedged future cash flows are no longer

expected to occur

ꢀꢆ

ꢄ

-

ꢄ

For hedges that have been transferred because the hedged item has

affected profit or loss

ꢀꢃꢁ

-ꢀꢇ

-ꢀꢆꢆ

-6ꢆ

-ꢃꢀ

-

In 2020, cash-flow hedges with a nominal volume of

€4,325 million were de-designated because the cash

flows secured with these instruments could no longer

be classified as highly probable. The de-designation of

these derivatives, which is largely attributable to the

covid-19 pandemic, mainly relates to cash flows in US

dollars, British pounds and Canadian dollars, and led to

reclassification from the reserves for derivative financial

instruments to revenue of €2ꢉ million (losses) and to

cost of sales of €2 million (gains).

288

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Table



D.85 shows the reconciliation of the reserves

At 31 December 2021, the balance of reserves for

hedges of net investments in foreign operations

amounted to €189 million (2020: €189 million).

for derivative instruments (excluding reserves for

hedges of net investments in foreign operations).

The maturities of the derivative financial instruments

generally correspond with those of the underlying trans-

actions. The realisation of the underlying transactions of

the cash-flow hedges is expected to correspond with

the maturities of the hedging transactions shown in

D.ꢈꢃ

Reconciliation of reserves for derivative financial instruments

In millions of euros

Reserves

for

derivative

table



D.86.

Thereof

financial reserves for

instruments hedge costs

At 31 December 2021, the Mercedes-Benz Group utilised

derivative instruments with a maximum maturity of

Balance at 1 January ꢄꢅꢄꢅ

Changes in fair values (before taxes)

Foreign-currency risk

-ꢃꢆ6

ꢄ,ꢀ66

ꢄ,ꢄ6ꢂ

ꢈꢀ

-

-ꢄꢁ

-

35 months (2020: 38 months) as hedges for currency

risks arising from future transactions.

Interest-rate risk

Nominal values of derivative financial instruments

Commodity-price risk – inventory purchases

ꢂꢄ

-

Table



D.86 shows the nominal values of derivative

Reclassification to profit and loss

financial instruments entered into for the purpose of

hedging currency risks, interest-rate risks and commod-

ity-price risks that arise from the Group’s operating and/

or financing activities.

(

before taxes)

-ꢄꢄꢈ

-ꢄ

-

Foreign-currency risk

Interest-rate risk

-ꢄꢄ6

Reclassification to cost of acquisition of

non-financial assets (before taxes)

6

ꢆꢂ

-

The average prices for derivative financial instruments

classified by risk categories for the main risks are

Foreign-currency risk – procurement

Commodity-price risk – inventory purchases

Other

-ꢂꢈ

ꢆ

included in table



D.87.

Taxes on changes in fair values

and reclassifications

-ꢂꢆꢈ

ꢀ66

ꢂ

-ꢈ

Most of the transactions for which the effects from the

measurement of the hedging instrument and the under-

lying transaction to a large extent offset each other in

the Consolidated Statement of Income do not classify

for hedge accounting.

Balance at 31 December ꢄꢅꢄꢅ

Changes in fair values (before taxes)

Foreign-currency risk

-ꢀ,7ꢀꢀ

-ꢀ,98ꢀ

270

-227

-

Interest-rate risk

Commodity-price risk – inventory purchases

-

Even if derivative financial instruments do not or no

longer qualify for hedge accounting, these instruments

still serve to hedge financial risks from business opera-

tions. A hedging instrument is terminated when the

hedged transaction no longer exists or is no longer

expected to occur.

Reclassification to profit and loss

(before taxes)

5ꢂ7

509

28

ꢀꢂꢂ

-

Foreign-currency risk

Interest-rate risk

Reclassification to cost of acquisition of

non-financial assets (before taxes)

-ꢀ0ꢀ

-69

-ꢀ0

-

Foreign-currency risk – procurement

Commodity-price risk – inventory purchases

-ꢂ2

Explanations of the hedging of exchange-rate risks,

interest-rate risks and commodity-price risks can be

found in Note 34 in the sub-item finance market risk.

Disposal due to spin-off of the Daimler commer-

cial vehicle business (before taxes)

-2ꢂ

-2

8

Other

ꢀ

Taxes on changes in fair values

and reclassifications

ꢂ92

28

Balance at 31 December ꢄꢅꢄ1

-6ꢁ2

-7ꢁ

289

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢈꢆ

Nominal amounts of derivative financial instruments

ꢂꢀ December 202ꢀ

Maturity of nominal amounts

ꢄ year up to

ꢂꢄ December ꢀꢁꢀꢁ

Maturity of nominal amounts

ꢄ year up to

<

ꢄ year

ꢃ years

>ꢃ years

Total

<ꢄ year

ꢀꢀ,ꢇꢅꢃ

ꢃ years

>ꢃ years

Total

In millions of euros

Foreign-currency risk

25,057

ꢀꢀ,878

-

ꢂ6,9ꢂ5

ꢈ,ꢂꢆꢇ

-

ꢂꢁ,ꢂꢂꢆ

Interest-rate risk

Fair-value hedges

ꢀꢂ,927

5,ꢀꢀꢂ

26,9ꢁꢁ

ꢀ6,2ꢀꢁ

6,70ꢀ

ꢂ,ꢁꢁꢁ

ꢁ7,572

2ꢁ,77ꢀ

ꢄꢆ,ꢇꢇꢇ

ꢅ,ꢈꢄꢁ

ꢂꢀ,6ꢈꢂ

ꢄ6,ꢅꢂ6

ꢅ,ꢀꢆꢇ

ꢈ,ꢆꢃꢈ

ꢃꢃ,ꢇꢀꢄ

ꢂꢂ,ꢁꢁꢂ

thereof major derivative financial

instruments affected by the reform of

the interest-rate benchmark

in the currency USD

in the currency GBP

2,0ꢂꢀ

ꢂ,775

ꢀ,257

7,06ꢂ

ꢃ,ꢀꢈꢂ

ꢆ,ꢅ6ꢇ

ꢀ,ꢁꢁꢀ

ꢄ,ꢈꢈꢀ

ꢄꢄ,ꢇꢄꢆ

ꢀ,ꢁꢁꢀ

-

Cash-flow hedges

8,8ꢀꢁ

ꢀ0,7ꢂ0

ꢂ,257

22,80ꢀ

6,ꢀꢅꢇ

ꢄꢃ,ꢅꢂꢈ

ꢈꢇꢀ

ꢀꢀ,ꢇꢄꢅ

thereof major derivative financial

instruments affected by the reform of

1

the interest-rate benchmark

in the currency USD

in the currency GBP

5,2ꢂ6

ꢁ,589

ꢀ,258

ꢀꢀ,08ꢂ

ꢀ,ꢂꢂꢄ

ꢃꢁꢄ

ꢈ,ꢅꢄꢅ

ꢄ,6ꢄꢀ

6ꢈꢀ

ꢄꢁ,ꢅꢀꢄ

ꢀ,ꢄꢄꢂ

-

Commodity risk

ꢁ8

9

-

57

ꢄꢃꢇ

6ꢇ

-

ꢀꢀꢅ

1

The volumes of risk exposure in cash-flow hedges directly affected by the reform of the interest-rate benchmark are generally in line with the reported volumes of the hedging

instruments because of the basic hedging ratio of 1. Further information on the reform of the interest-rate benchmark is provided in Note 34.

D.ꢈꢇ

Average prices of hedging instruments for the major risks

ꢂꢄ December

02ꢀ ꢀꢁꢀꢁ

2

Foreign-currency risk

USD per €

ꢀ,ꢀ8

ꢄ,ꢄꢃ

ꢅ,ꢁ6

ꢁ,ꢇꢁ

CNY per €

7,90

0,87

GBP per €

Interest-rate risk

Fair-value hedges

Average interest rate – €

Average interest rate – USD

Cash-flow hedges

ꢀ,07%

2,ꢁꢂ%

ꢁ.ꢇꢅ%

ꢄ.ꢇꢈ%

Average interest rate – €

Average interest rate – USD

Commodity risk

-0,ꢀ8%

-0,5ꢀ%

-ꢁ.ꢀꢂ%

-ꢄ.ꢁꢁ%

Platinum (in € per troy ounce)

Palladium (in € per troy ounce)

89ꢂ

ꢇꢁꢃ

ꢀ,577

ꢄ,ꢇꢅꢁ

290

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

3

4. Management of financial risks

The Group manages and monitors these risks primarily

through its operating and financing activities and, if

required, through the use of derivative financial instru-

ments. The Mercedes-Benz Group uses derivative finan-

cial instruments exclusively for hedging financial risks

that arise from its business operations or refinancing

activities or liquidity management. Without these deriv-

ative financial instruments, the Group would be

exposed to higher financial risks. Additional information

on financial instruments and especially on the volumes

of the derivative financial instruments used is included

in Note 33. The Mercedes-Benz Group regularly evalu-

ates its financial risks with due consideration of

changes in key economic indicators and up-to-date

market information.

General information on financial risks

As a result of its businesses and the global nature of its

operations, the Mercedes-Benz Group is exposed to

market risks from changes in foreign currency exchange

rates and interest rates, while commodity price risks

arise from procurement. An equity price risk results

from investments in listed companies. In addition, the

Group is exposed to credit risks from its leasing and

financing activities and from its business operations

(trade receivables). Furthermore, the Group is exposed

to liquidity and country risks relating to its credit and

market risks or a deterioration of its business opera-

tions or financial market disturbances. If these financial

risks materialise, they could adversely affect the

Mercedes-Benz Group’s profitability, liquidity and capi-

tal resources and financial position.

The market sensitive instruments, including equity and

debt securities, that the plan assets hold to finance

pension and other post-employment healthcare bene-

fits, are not included in the following quantitative and

qualitative analysis. See Note 23 for additional informa-

tion on the Mercedes-Benz Group’s pension and other

post-employment benefits.

The Mercedes-Benz Group has established internal

guidelines for risk controlling procedures and for the

use of financial instruments, including a clear segrega-

tion of duties with regard to financial activities, settle-

ment, accounting and the related controlling. The guide-

lines upon which the Group’s risk management

Credit risk

processes for financial risks are based are designed to

identify and analyse these risks throughout the Group,

to set appropriate risk limits and controls and to moni-

tor the risks by means of reliable and up-to-date admin-

istrative and information systems. The guidelines and

systems are regularly reviewed and adjusted to changes

in markets and products.

Credit risk is the risk of economic loss arising from a

counterparty’s failure to repay or service debt in

accordance with the contractual terms. Credit risk

encompasses both the direct risk of default and the risk

of a deterioration of creditworthiness as well as con-

centration risks.

The maximum risk positions of financial assets which

are generally subject to credit risk are equal to their car-

rying amounts at the balance sheet date (without con-

sideration of collateral, if available). There is also a risk

of default from irrevocable loan commitments which

had not been utilised as of that date, as well as from

financial guarantees. The maximum risk position in

these cases is equal to the expected future cash out-



flows. Table D.88 shows the maximum risk positions

at the balance sheet date.

291

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Liquid assets

Financial Statements. Overdue lease payments from

operating lease contracts are recognised in receivables

from financial services.

Liquid assets consist of cash and cash equivalents and

marketable debt securities and similar investments.

With the investment of liquid assets, banks and issuers

of securities are selected very carefully and diversified

in accordance with a limit system. Liquid assets are

mainly held at financial institutions within and outside

Europe with high creditworthiness, as bonds issued by

German federal states and as money market funds. In

connection with investment decisions, priority is placed

on the borrower’s very high creditworthiness and on

balanced risk diversification. The limits and their utilisa-

tions are reassessed continuously. In this assessment,

the Mercedes-Benz Group also considers the credit risk

assessment of its counterparties by the capital markets.

In line with the Group’s risk policy, most liquid assets

are held in investments with an external rating of “A” or

better. Liquid assets are thus not subject to a material

The Mercedes-Benz Mobility segment has guidelines

setting the framework for effective risk management at

a global as well as a local level. In particular, these rules

deal with minimum requirements for all risk-relevant

credit processes, the definition of financing products

offered, the evaluation of customer quality, requests for

collateral and the treatment of unsecured loans and

non-performing claims. The limitation of concentration

risks is implemented primarily by means of global limits,

which refer to customer exposures. To comply with

these limits, Mercedes-Benz Mobility applies approval

standards and measures to avoid concentration risks.

Only two customers were granted credit lines in relation

to a large loan. The Mercedes-Benz Mobility portfolio

credit risk and are allocated to stage 1 of the impairment consists of a large number of small and medium-sized

model under IFRS, which is based on expected credit

risk.

enterprises and private customers from more than 30

countries. At 31 December 2021, this segment

accounted for 78% of the portfolio.

Receivables from financial services

The Mercedes-Benz Group’s financing and leasing activi- With respect to its financing and lease activities, the

ties are primarily focused on supporting the sales of the

Group’s automotive products. As a consequence of

these activities, the Group is exposed to credit risk,

which is monitored and managed based on defined

standards, guidelines and procedures. The Mercedes-

Benz Group manages its credit risk irrespective of

whether it is related to a financing contract or to an

operating lease or a finance lease contract. For this rea-

son, statements concerning the credit risk of Mercedes-

Benz Mobility refer to the entire financing and leasing

business, unless otherwise specified.

Group holds collateral for customer transactions limiting

actual credit risk through its fair value. The value of col-

lateral generally depends on the amount of the financed

assets. The financed vehicles usually serve as collateral.

Furthermore, Mercedes-Benz Mobility limits credit risk

from financing and lease activities, for example through

advance payments from customers.

For the assessment of the default risk of retail and small

business customers, scoring systems are applied to

evaluate their creditworthiness. Corporate customers

are evaluated using internal rating instruments. Both

evaluation processes use external credit bureau data if

available. The scoring and rating results as well as the

availability of security and other risk mitigation instru-

ments, such as advance payments, guarantees and, to a

lower extent, residual debt insurances, are essential

elements for credit decisions.

Exposure to credit risk from financing and lease activi-

ties is monitored based on the portfolio subject to

credit risk. The portfolio subject to credit risk consists

of wholesale and retail receivables from financial ser-

vices and the portion of the operating lease portfolio

that is subject to credit risk. Receivables from financial

services comprise claims arising from finance lease

contracts and repayment claims from financing loans.

The operating lease portfolio is reported under equip-

ment on operating leases in the Group’s Consolidated

292

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢈꢈ

The allowance ratio decreased slightly compared to the

Maximum risk positions of financial assets,

previous year due to the low payment defaults, positive

economic forecasts at 31 December 2021 and the

reduction of the allowance components formed in the

previous year in response to the covid-19 crisis.

irrevocable loan commitments and financial guarantees¹

Maximum

risk

position

Maximum

risk

position

ꢀꢁꢀꢁ

Note

ꢀꢁꢀꢄ

For information on credit risks included in receivables

from financial services, see Note 15. Information on the

measurement of expected credit losses is provided in

Note 1.

In millions of euros

Liquid assets

ꢂ0,76ꢀ

82,85ꢂ

7,70ꢂ

ꢀꢇ,ꢆꢆꢃ

ꢇ6,ꢄꢅꢃ

ꢄꢁ,6ꢆꢇ

Receivables from

financial services

Trade

receivables

Trade receivables

Trade receivables are mostly receivables from world-

wide sales of vehicles and spare parts. The credit risk

from trade receivables encompasses the default risk of

customers, e.g., dealers and general distribution com-

panies, as well as other corporate and private custom-

ers. In order to identify credit risks, the Mercedes-Benz

Group assesses the creditworthiness of customers. The

Mercedes-Benz Group manages its credit risk from trade

receivables using appropriate IT applications and data-

bases on the basis of internal guidelines which have to

be followed globally.

Derivative financial

instruments used in

hedge accounting

(assets only)

ꢄꢈ

ꢀ,020

6ꢀ

ꢀ,ꢄꢆꢃ

Derivative financial

instruments not used in

hedge accounting

(assets only)

ꢈꢆ

Other receivables and

financial assets

ꢂ,258

ꢂ,0ꢁꢁ

829

ꢀ,ꢇꢆꢀ

ꢀ,ꢄꢁꢇ

ꢃ6ꢂ

Irrevocable loan commitments

Financial guarantees

1

The information on the maximum risk position presented in the table represents the

Group values, including assets and liabilities held for sale.

A significant proportion of the trade receivables from

each country’s domestic business is secured by various

country-specific types of collateral. This collateral

includes conditional sales, guarantees and sureties, as

well as mortgages and advance payments from custom-

ers.

If, in connection with contracts, a worsening of payment

behaviour or other causes of a credit risk are recog-

nised, collection procedures are initiated by claims

management to obtain the overdue payments of the

customer, to take possession of the asset financed or

leased or, alternatively, to renegotiate the impaired con-

tract. Restructuring policies and practices are based on

the indicators or criteria which, in the judgment of local

management, indicate that repayment will probably

continue and that the total proceeds expected to be

derived from the renegotiated contract exceed the

expected proceeds to be derived from repossession

and remarketing. Due to the covid-19 pandemic, govern-

ment support programmes for customers still existed in

some markets in 2021, which led to modifications of

financial assets for receivables from financial services.

Most of the customer support programmes offered by

Mercedes-Benz Mobility expired in 2021. The design of

the programmes meant that these modifications were,

however, classified as insignificant and that they did not

lead to significantly increased bad-debt losses.

293

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

For trade receivables from the export business, the

Other receivables and financial assets

With respect to other receivables and financial assets

included in other financial assets in 2021 and 2020, the

Mercedes-Benz Group is exposed to credit risk only to a

small extent.

Mercedes-Benz Group also evaluates its customers’

creditworthiness by means of an internal rating process

with consideration of the respective country risk. In this

context, the year-end financial statements and other

relevant information on the general distribution compa-

nies, such as payment history, are used and assessed.

Irrevocable loan commitments

The Mercedes-Benz Mobility segment in particular is

exposed to credit risk from irrevocable loan commit-

ments to end customers and retailers. At 31 December

2021, irrevocable loan commitments amounted to

€3,044 (2020: €2,109) million. These loan commitments

had a maturity of less than one year and are not subject

to a material credit risk based on the current state of

knowledge.

Depending on the creditworthiness of the customers,

the Mercedes-Benz Group usually establishes credit

limits and limits credit risks with the following types of

collateral:

−

credit insurances,

−

first-class bank guarantees and

letters of credit.

Financial guarantees

The maximum potential obligations resulting from finan-

cial guarantees amount to €829 million at 31 December

These procedures are defined in the export credit guide- 2021 (2020: €5ꢉ3 million) and include liabilities recog-

lines, which have Group-wide validity.

nised at 31 December 2021 in the amount of €15 million

2020: €99 million). Financial guarantees principally

represent contractual arrangements. These guarantees

(

For impairments of trade receivables, the simplified

approach is applied, whereby these receivables are allo- generally provide that in the event of default or

cated to stage 2. Credit losses until maturity for these

trade receivables are recognised upon initial recogni-

tion.

non-payment by the primary debtor, the Group will be

required to settle such financial obligations generally up

to a contractually agreed amount.

Further information on trade receivables and the status

Liquidity risk

of impairments recognised is provided in Note 20.

Liquidity risk comprises the risk that a company cannot

meet its financial obligations in full.

Derivative financial instruments

The Group uses derivative financial instruments exclu-

sively for hedging financial risks that arise from its oper-

ational business, financing activities or liquidity man-

agement. The Mercedes-Benz Group manages its credit

risk exposure in connection with derivative financial

instruments through a limit system, which is based on

the review of each counterparty’s financial strength.

This system limits and diversifies the credit risk. As a

result, the Mercedes-Benz Group is exposed to credit

risk only to a small extent with respect to its derivative

financial instruments. In accordance with the Group’s

risk policy, most derivatives are contracted with coun-

terparties which have an external rating of “A” or better.

The Mercedes-Benz Group manages its liquidity by hold-

ing adequate volumes of liquid assets and by maintain-

ing syndicated credit facilities in addition to the cash

inflows generated by its business operations. Addition-

ally, the possibility to securitise receivables of the finan-

cial services business (ABS transactions) also reduces

the Group’s liquidity risk. Liquid assets comprise cash

and cash equivalents and marketable debt securities

and similar investments. The Group can dispose of

these liquid assets at short notice.

294

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Insofar as reverse factoring agreements are entered into, From an operating point of view, the management of the

they have no influence on the liquidity risk of the

Mercedes-Benz Group, as they relate to a large number

of investors and have no impact on the payment terms

of the trade payables concerned.

Group’s liquidity exposures is centralised by a daily

cash-pooling process. This process enables the

Mercedes-Benz Group to manage its liquidity surplus

and liquidity requirements according to the actual

needs of the Group and each subsidiary. The Group’s

The funds raised are used to finance working capital and short-term and mid-term liquidity management takes

capital expenditure as well as the cash needs of the

lease and financing business and unexpected liquidity

needs. In accordance with internal guidelines, the

refunding of the lease and financing business is gener-

ally carried out with matching maturities so that financ-

ing liabilities have the same maturity profile as the

leased assets and the receivables from financial ser-

vices.

into account the maturities of financial assets and

financial liabilities and estimates of cash flows from

business operations.

In general, the Mercedes-Benz Group makes use of a

broad spectrum of financial instruments to cover its

funding requirements. Depending on funding require-

ments and market conditions, the Mercedes-Benz

Group issues commercial paper, bonds (including green

bonds), debt obligations and financial instruments

secured by receivables in various currencies. Bank

credit facilities are also used to cover financing require-

ments. Potential downgrades of the Mercedes-Benz

Group’s credit ratings could have a negative impact on

the Group’s financing. Since July 2018, the Mercedes-

Benz Group has had a syndicated credit facility with a

volume of €11 billion with a consortium of international

banks at its disposal. Exercising an optional extension of

one year grants additional financial flexibility for the

Mercedes-Benz Group until 2025. As of 31 December

2021, this credit line had not been utilised.

At 31 December 2021, liquidity amounted to €30.8 bil-

lion (2020: €29.4 billion). In 2021, significant cash

inflows resulted from the operations of the industrial

business. Furthermore, dividend payments received

from Beijing Benz Automotive Co., Ltd. had a positive

effect on liquidity. There were also positive effects from

the leasing and sales financing business at Mercedes-

Benz Mobility as well as from the repayment by the

Daimler Truck Group of the loan granted to finance the

purchase prices of the parts of the financial services

business included in Daimler’s commercial vehicle busi-

ness that were transferred before the spin-off. Cash

outflows resulted in particular from the repayment of

financing obligations due to the positive liquidity situa-

tion and the outgoing net liquidity of Daimler’s commer-

cial vehicle business. In addition, the investments made

in intangible assets and property, plant and equipment

and the income taxes paid, as well as the higher divi-

dend payment to the shareholders of Mercedes-Benz

Group AG compared to the previous year, had an impact

and reduced liquidity.

295

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

In addition, customer deposits at Mercedes-Benz Bank

are used as a further source of refinancing.

cash flows from liabilities, financial guarantees and

irrevocable loan commitments as of 31 December 2021.

Table



D.89 provides an overview of how the future

Information on the Group’s financing liabilities is also

liquidity situation of the Group can be affected by the

provided in Note 25.

D.ꢈꢉ

Liquidity runoff for liabilities and financial guarantees¹

Total

ꢀꢁꢀꢀ

ꢀꢁꢀꢂ

ꢀꢁꢀꢆ

ꢀꢁꢀꢃ

ꢀꢁꢀ6

≥ ꢀꢁꢀꢈ

In millions of euros

Financing liabilities²

thereof lease liabilities

Derivative financial instruments³

thereof with gross settlement

Cash outflows

ꢄꢂꢂ,ꢆꢃꢀ

ꢂ,ꢅꢇꢇ

ꢄ,ꢇꢇꢃ

ꢄ,ꢅꢇꢀ

ꢂꢅ,6ꢅꢆ

-ꢂ6,ꢈꢇꢀ

ꢄꢁꢂ

ꢃꢆ,ꢂ6ꢇ

6ꢃꢀ

ꢀꢅ,ꢂꢁꢆ

ꢃꢃꢄ

ꢆꢇ6

ꢆꢈꢂ

ꢄ6,ꢂꢁꢁ

ꢆꢆꢁ

ꢈꢂ

ꢈ,ꢅꢁꢈ

ꢂꢅꢂ

-ꢀ

6,ꢁꢆꢀ

ꢂꢄꢀ

-ꢂ

ꢀꢁ,6ꢂꢁ

ꢄ,ꢃ6ꢄ

ꢄꢁ

ꢄ,ꢆꢀꢄ

ꢄ,ꢂꢆ6

ꢀ6,ꢇꢅꢈ

-ꢀꢃ,6ꢆꢄ

ꢈꢃ

66

-ꢄ

-ꢀ

ꢄꢁ

ꢇ,ꢆꢅꢆ

-ꢇ,ꢁꢄꢄ

ꢀꢂ

ꢀ,ꢁꢇꢂ

-ꢀ,ꢁꢀꢈ

ꢈ

-

ꢄꢀꢁ

-ꢄꢄꢁ

-

Cash inflows

-ꢄ

-ꢀ

thereof with net settlement

Cash outflows

-ꢄ

ꢄꢁꢂ

ꢈꢃ

ꢀꢂ

ꢈ

-ꢄ

-

Trade payables⁴

ꢄꢁ,6ꢃꢃ

ꢄꢁ,6ꢄꢈ

ꢀꢆ

ꢄꢄ

ꢂ

-

Miscellaneous other financial liabilities

excluding accrued interest and liabilities

from financial guarantees

ꢃ,ꢆꢇꢇ

ꢂ,ꢅ6ꢁ

ꢆ,ꢅꢄꢃ

ꢂ,ꢅ6ꢁ

ꢂ,ꢁꢆꢆ

ꢅꢀꢇ

ꢂꢀꢁ

ꢀꢄꢅ

ꢈꢈ

ꢀꢅ

ꢆꢄ

Obligations from sales

-

Irrevocable loan commitments⁵

Financial guarantees⁶

ꢂ,ꢁꢆꢆ

-

ꢅꢀꢇ

-

ꢄꢃꢇ,ꢂꢂꢆ

ꢈꢅ,ꢇꢃꢃ

ꢀꢇ,ꢄꢆꢆ

ꢄ6,6ꢁꢀ

ꢈ,ꢅꢅꢃ

6,ꢁ6ꢈ

ꢀꢁ,6ꢅꢄ

1

The amounts were calculated as follows:

a) If the counterparty can request payment at different dates, the liability is included on the basis of the earliest date on which the Mercedes-Benz Group can be required to pay. The

(

customer deposits of Mercedes-Benz Bank are mostly considered in this analysis to mature within the first year.

b) The cash flows of floating-interest financial instruments are estimated on the basis of forward rates.

(

2

The stated cash flows of financing liabilities consist of their undiscounted principal and interest payments.

This includes the part of the carrying amount that was reclassified to “Assets held for sale” in the Consolidated Statement of Financial Position.

The undiscounted sum of the cash flows of the derivative financial liabilities is shown for the respective year.

The cash outflows of trade payables are undiscounted.

The maximum available amounts are stated.

The maximum potential obligations under the issued guarantees are stated. It is assumed that the amounts are due within the first year.

3

4

5

6

29ꢉ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Country risk

Country risk is the risk of economic loss arising from

The Mercedes-Benz Group usually counteracts the risk

of short-term fluctuations in raw material prices by

changes of political, economic, legal or social conditions means of price escalation clauses in the supply con-

in the respective country, e.g., resulting from sovereign

measures such as expropriation or interdiction of for-

eign currency transfers.

tracts. To a lesser extent, derivative financial instru-

ments are used to hedge precious metal purchases.

Certain existing benchmark interest rates including

those of the London Interbank Offer Rate (for USD, GBP,

CHF and JPY) were comprehensively and internationally

The Mercedes-Benz Group is exposed to country risk

mainly resulting from cross-border funding or collateral-

isation of Group companies and customers, from invest- reformed by the end of 2021. As a result, those interest

ments in subsidiaries, associated companies, joint ven-

tures and joint operations as well as from cross-border

trade receivables. Country risks also arise from

rates were gradually abolished and replaced with alter-

native risk-free reference rates. Alternative interest

rates are being developed on a national level in the

context of the respective legal systems and currencies;

they can therefore vary with regard to their structure,

methodology and period of publication.

cross-border cash deposits at financial institutions.

The Mercedes-Benz Group manages these risks via

country exposure limits (e.g., for hard currency portfo-

lios of financial services entities). An internal rating sys-

tem serves as a basis for the Mercedes-Benz Group’s

risk-oriented country exposure management; it assigns

all countries to risk classes, with consideration of capi-

tal market indications of country risks.

Despite market uncertainty, the existing benchmark

interest rates for USD, for example, are still applied as

reference rates in financial markets and have an impact

on the valuation of financial transactions. This also

applies for financial instruments in hedging relation-

ships with a maturity beyond the end of 2021. With

EURIBOR as well as GBP, CHF and JPY LIBOR reform

already implemented, the contractual adjustment of

financial instruments with a corresponding interest rate

Finance-market risks

The global nature of its businesses exposes the

Mercedes-Benz Group to significant market risks result-

ing from fluctuations in foreign currency exchange rates, risk reference was made by 31 December 2021. The

interest rates and commodity prices. The Group is also

exposed to equity price risk in connection with its

investments in listed companies.

material share of interest rate risk hedging relationships

that is still affected by the benchmark reform is based

on the USD currency.

The Mercedes-Benz Group manages market risks to min- The Mercedes-Benz Group expects the conversion of

imise the impact of fluctuations in foreign exchange

rates and interest rates on the earnings of the Group

and its segments. The Group calculates its overall

net-exposure to these market risks to provide the basis

for hedging decisions, which include the selection of

hedging instruments and the determination of hedging

volumes and the corresponding periods. The hedging

strategy is specified at Group level and uniformly imple-

mented in the segments. Decisions regarding the man-

agement of market risks from foreign exchange rates

and commodities, as well as asset-/liability manage-

ment (interest rates), are regularly made by the relevant

the Mercedes-Benz Group risk management commit-

tees. Net-exposures are the basis for the hedging strat-

egies and are updated regularly.

the outstanding reference rates of hedging instruments

and their underlying transactions to be identical and

without any material delay. The Mercedes-Benz Group

continues to consider the economic relationship and

thus the continuation of hedge accounting to be still

existing as of 31 December 2021.

297

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

The nominal values of the affected derivative financial

instruments that are included in hedge accounting can

be found in table D.86. The nominal values, which are − express potential losses in fair values, and

not designated in a hedging relationship, amount to

12 billion in 2021 for derivatives used to hedge interest − assume a 99% confidence level and a holding period

The value-at-risk calculations employed:



€

rate risks (2020: €14 billion), €8 billion (2020: €5 billion)

for derivatives used to hedge exchange rate risks and

of five days.

€

17 million (2020: €0 million) for derivatives used to

At the Group level, the Mercedes-Benz Group calculates

the value at risk for exchange rate and interest rate risk

according to the variance-covariance approach. The val-

ue-at-risk calculation method for commodity hedging

instruments is based on a Monte Carlo simulation.

hedge commodity price risks.

D.ꢉꢅ

Unreformed contracts in the course of the IBOR-reform

USD LIBOR

When calculating value at risk using the variance-covari-

ance approach, the Mercedes-Benz Group first com-

putes the current market value of the Group’s financial

instruments portfolio. Then the sensitivity of the portfo-

lio value to changes in the relevant market risk factors,

such as particular foreign currency exchange rates or

interest rates of specific maturities, is quantified. Based

on volatilities and correlations of these market risk fac-

tors, which are obtained from the RiskMetrics™ dataset,

a statistical distribution of potential changes in the

portfolio value at the end of the holding period is com-

puted. The loss which is reached or exceeded with a

probability of only 1% can be derived from this calcula-

tion and represents the value at risk.

Total amount of unre-

formed contracts

In millions of euros

ꢂꢀ December 202ꢀ

Financial assets

Financial liabilities

Derivatives

-

7,6ꢂ5

ꢀ8,ꢀꢁ6

The effect of the application of the new interest rates on

the Consolidated Financial Statements is being

reviewed on an ongoing basis. In order to conduct

financial transactions based on the new indices, the

Mercedes-Benz Group is preparing its IT-systems

accordingly. Uncertainty still exists about future market

standards with interest conventions for individual finan-

cial products (cash products and interest derivatives)

that reference the new risk-free rates. Contracts that

The Monte Carlo simulation uses random numbers to

generate possible changes in market risk factors con-

sistent with current market volatilities. The changes in

market risk factors allow the calculation of a possible

change in the portfolio value over the holding period.

Running multiple iterations of this simulation leads to a

distribution of portfolio value changes. The value at risk

can be determined based on this distribution as the

portfolio value loss which is reached or exceeded with a

probability of 1%.

have not been converted are shown in table



D.90.

As part of its risk management system, the Mercedes-

Benz Group employs value-at-risk analyses. In perform-

ing these analyses, the Mercedes-Benz Group quantifies

its market risk due to changes in foreign currency

exchange rates and interest rates and certain commod-

ity prices on a regular basis by predicting the potential

loss over a target time horizon (holding period) and

confidence level.

298

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Exchange-rate risk

currency hedging through transactions with interna-

tional financial institutions. Suitable measures are gen-

erally taken without delay to eliminate any over-hedging

regarding hedging transactions caused by changes in

exposure. In the case of over hedges, designated hedg-

ing relations are reviewed with respect to any require-

ments to discontinue hedge accounting.

Tꢏꢔꢌ ꢐꢔꢘꢎꢚꢑꢌ ꢏꢚꢐꢕ ꢔꢌ ꢍ ꢘꢙꢏꢏꢋ ꢌ ꢘꢜ ꢏꢚꢐꢕ ꢊ ꢔꢌ ꢔꢝꢋ ꢊ ꢋ ꢌ ꢎ. The

global nature of the Mercedes-Benz Group’s businesses

exposes cash flows to risks arising from fluctuations in

exchange rates. These risks primarily relate to fluctua-

tions between the euro and the US dollar, the Chinese

renminbi, the British pound and other currencies such

as currencies of growth markets. In the operating vehi-

cle business, the Group’s exchange rate risk primarily

arises when revenue is generated in a currency that is

different from the currency in which the costs of reve-

nue are incurred, it may be inadequate to cover the

The Group’s targeted hedge ratios for forecasted operat-

ing cash flows in foreign currency are generally indi-

cated by a step-by-step method. Depending on the

nature of the underlying risks, the hedging rates

costs if the value of the currency in which the revenue is decrease the further the expected cash flows are in the

generated declined in the interim relative to the value of future. On the one hand, the hedging horizon is naturally

the currency in which the costs were incurred. This risk

exposure serves as a basis for analysing exchange rate

risks at Group level. In addition, the Group is indirectly

exposed to transaction risk from its equity-method

investments.

limited by uncertainty related to cash flows that lie far

in the future; on the other hand, it may also be limited

by the fact that appropriate currency contracts are not

available. This step-by-step method aims to limit risks

for the Group from unfavourable movements in

exchange rates while preserving some flexibility to par-

ticipate in favourable developments. Based on this

step-by-step method and depending on the market out-

look, the committee determines the hedging horizon,

which usually varies from one to five years, as well as

The Group’s overall currency exposure is reduced by

natural hedging, which consists of the currency expo-

sures of the business operations of different entities

and segments partially offsetting each other at Group

level. These natural hedges eliminate the need for hedg- the average hedge ratios. Reflecting the character of the

ing to the extent of the matched exposures. To provide underlying risks, the hedge ratios decrease with

an additional natural hedge against any remaining trans- increasing maturities. At year-end 2021, foreign

action risk exposure, the Mercedes-Benz Group gener-

ally strives to increase cash outflows in the same cur-

rencies in which the Group has a net excess inflow.

exchange management showed an unhedged position in

the automotive business in calendar year 2022 for the

underlying forecasted cash flows in US dollars of 45%,

for the underlying forecasted cash flows in Chinese ren-

minbi of 31% and for the underlying forecasted cash

flows in British pounds of 13%.

In order to mitigate the impact of currency exchange

rate fluctuations for the business operations (future

transactions), the Mercedes-Benz Group continually

assesses its exposure to exchange rate risks and hedges To cover foreign currency exposure risks of the vehicle

a portion of those risks by using derivative financial

instruments. A committee manages the Group’s

business operations forward foreign exchange contracts

and currency options are primarily used. The Mercedes-

Benz Group’s guidelines call for a mixture of these

instruments depending on the assessment of market

conditions. Value at risk is used to measure the

exchange rate risk inherent in these derivative financial

instruments.

exchange rate risk and its hedging transactions through

currency derivatives. The committee consists of repre-

sentatives of the relevant segments and central func-

tions. The Corporate Treasury department aggregates

foreign currency exposures from the Mercedes-Benz

Group’s subsidiaries and operational units and imple-

ments the committee’s decisions concerning foreign

299

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Table



D.91 shows the period-end, high, low and aver-

assessed at the beginning and during the economic

age value-at-risk figures of the exchange rate risk for the relationship. Possible sources of ineffectiveness of the

2021 and 2020 portfolios of derivative financial instru-

hedge relationship are:

ments, which were entered into primarily in connection

with the vehicle business operations. Average exposure

has been computed on an end-of-quarter basis. The

offsetting transactions underlying the derivative finan-

cial instruments are not included in the following value-

– Effects of the credit risk on the fair value of the used

derivative instrument which are not reflected in the

change of the hedged currency risk.

at-risk presentation, since they primarily comprise fore- – Changes in the timing of the hedged transactions.

casted cash-flows. See also table D.86.



In the context of focusing on the divisional perspective,

the designation of hedge relationships for foreign cur-

rency risk existing from the Group perspective from

expected future cash flows from business operations,

primarily from vehicle sales, have been assigned to

Mercedes-Benz Cars & Vans and to Daimler Trucks &

Buses starting with 2019. Accordingly, the documenta-

Hꢋ ꢍꢝꢋ ꢔꢘꢘꢑꢙꢌ ꢎꢚꢌ ꢝ. When designating derivative finan-

cial instruments, a hedge ratio of 1 is applied. In addi-

tion, the respective volume and currency of the hedge

and the underlying transaction as well as maturity dates

are matched. The Group ensures an economic relation-

ship between the underlying transaction and the hedg-

ing transaction by ensuring consistency of currency, vol- tion required under IFRS with regard to this further dif-

ume and maturity. Option premiums and – since

mid-2020 for newly designated hedge relationships –

also forward components are not designated into the

hedge relationship, but the hedging costs are deferred

in other comprehensive income and recognised in profit

or loss at the due date of the underlying transaction or

recognised as adjustment of acquisition cost of non-fi-

nancial assets. The effectiveness of the hedge is

ferentiation of expected cash flows (i.e., the risk man-

agement objectives) has been revised for a large

proportion of the already designated hedge relation-

ships for foreign currency risk, although there has been

no change in the overall Group risk management strat-

egy for foreign currency risk. Further information can be



found in table D.83. There were no material effects

on earnings in 2021 and 2020.

D.ꢉ1

Value at risk for exchange rate risk, interest rate risk and

commodity price risk

2

02ꢀ

ꢀꢁꢀꢁ

Period-end

High

Low

Average Period-end

High

Low

Average

In millions of euros

Exchange rate risk

(

from derivative financial instruments)

5ꢀ2

202

5ꢀ2

2ꢀ7

ꢂ26

ꢀꢁ9

ꢂ8ꢀ

ꢀ88

ꢂꢀꢅ

ꢄꢀꢇ

ꢅꢇꢈ

ꢂ6ꢅ

ꢂꢀꢅ

ꢄꢀꢄ

ꢃꢀꢀ

ꢄꢇꢀ

Interest rate risk

Commodity price risk

(from derivative financial instruments)

ꢁ

ꢀ2

ꢁ

8

ꢄꢀ

ꢄꢁꢁ

ꢄꢀ

ꢂꢅ

300

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

In 2021, the development of the value at risk from for-

Interest-rate risk

eign currency hedging was mainly driven by a strong

increase in the volume of hedges in the second half of

the year. Rising hedge volumes reflect the revenue

increases after temporary decreases due to the pan-

demic. The calculation of the averages includes the

derivative hedging transactions of the Daimler commer-

cial vehicle business. The hedging volumes disposed of

as part of the deconsolidation of the Daimler commer-

cial vehicle business have no significant effect on the

value at risk from foreign currency hedges.

The Mercedes-Benz Group uses a variety of interest rate

sensitive financial instruments to manage the liquidity

needs of the Group. A substantial volume of interest

rate sensitive assets and liabilities results from the leas-

ing and sales financing business operated by the

Mercedes-Benz Mobility segment. The Mercedes-Benz

Mobility companies enter into transactions with cus-

tomers that primarily result in fixed-rate receivables.

The Mercedes-Benz Group’s general policy is to match

funding in terms of maturities and interest rates wher-

ever economically feasible. However, for a limited por-

tion of the receivables portfolio in selected and devel-

oped markets, Mercedes-Benz Mobility does not match

funding in terms of maturities in order to take advantage

of market opportunities. As a result, the Mercedes-Benz

Group is exposed to risks due to changes in interest

The Group’s investments in liquid assets or refinancing

activities are generally selected so that possible cur-

rency risks are minimised. Transaction risks arising from

liquid assets or payables in foreign currencies that

result from the Group’s investment or refinancing on

money and capital markets are generally hedged against rates.

currency risks at the time of investing or refinancing in

accordance with the Mercedes-Benz Group’s internal

An asset/liability committee consisting of members of

guidelines. The Group uses appropriate derivative finan- the Mercedes-Benz Mobility, Mercedes-Benz Cars &

cial instruments (e.g., cross-currency interest rate

swaps) to hedge against currency risk.

Vans segments and the Corporate Treasury department

manages the interest rate risk by setting targets for the

interest rate risk position. The Treasury Risk Manage-

ment department and the local Mercedes-Benz Group

companies are jointly responsible for achieving these

targets. As separate functions, the Treasury Controlling

and the Mercedes-Benz Mobility Controlling & Reporting

department monitor target achievement on a monthly

basis. In order to achieve the targeted interest rate risk

positions in terms of maturities and interest rate fixing

periods, the Mercedes-Benz Group also uses derivative

Since currency risks arising from the Group’s investment

or refinancing in foreign currencies and the respective

hedging transactions generally offset each other, these

financial instruments are not included in the value-at-

risk calculation presented.

Eꢒꢒꢋ ꢘꢎꢐ ꢑꢒ ꢘꢙꢏꢏꢋ ꢌ ꢘꢜ ꢎꢏꢔꢌ ꢐꢗꢔꢎꢚꢑꢌ ꢏꢚꢐꢕ. For purposes of

Mercedes-Benz Group’s Consolidated Financial State-

ments, the income and expenses and the assets and lia- financial instruments such as interest rate swaps. The

bilities of subsidiaries located outside the euro zone are

converted into euros. Therefore, period-to-period

changes in average exchange rates may cause transla-

tion effects that have a significant impact on, for exam-

ple, revenue, segment results (EBIT) and assets and lia-

bilities of the Group. Unlike exchange rate transaction

risk, exchange rate translation risk does not necessarily

affect future cash flows. The Group’s equity position

reflects changes in book values caused by exchange

rates. In general, the Mercedes-Benz Group does not

hedge against exchange rate translation risk.

Mercedes-Benz Group assesses its interest rate risk

position by comparing assets and liabilities for corre-

sponding maturities, including the impact of the rele-

vant derivative financial instruments.

Derivative financial instruments are also used in con-

junction with the refinancing related to the automotive

segments and liquidity management. The Mercedes-

Benz Group steers the funding activities of the automo-

tive and financial services businesses at Group level.

301

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Table

age value-at-risk figures of the interest rate risk for the

021 and 2020 portfolios of interest rate sensitive



D.91 shows the period-end, high, low and aver-

during the economic relationship using the hypothetical

derivative method. Possible sources of ineffectiveness

of the hedge relationship are:

2

financial instruments and derivative financial instru-

ments of the Group, including the financial instruments

of the leasing and sales financing business. Lease liabil-

ities are not included in the value at risk of the interest

rate risk. These leasing liabilities have a fixed interest

rate and changes in interest rates therefore have no

effect on the Group’s net profit. The average values

have been computed on an end-of-quarter basis.

– Effects of the credit risk on the fair value of the deriva-

tive instrument in use which are not reflected in the

change in the hedged interest rate risk.

– No perfect match for individual parameters of the

underlying hedged transactions and the hedging

instruments used.

In the course of 2021, changes in the value at risk of

interest rate sensitive financial instruments were pri-

marily determined by the development of interest rate

volatilities. The calculation of the averages includes the

exposures and the derivative hedging transactions of

the Daimler commercial vehicle business. The hedging

volumes disposed of as part of the deconsolidation of

– Premiums on hedging instruments for hedging ABS

transactions.

There were no material effects on earnings in the years

2021 and 2020.

Commodity-price risk

the Daimler commercial vehicle business have no signif- The Mercedes-Benz Group is exposed to the risk of

icant effect on the value at risk of interest rate sensitive

financial instruments.

changes in commodity prices in connection with pro-

curing raw materials and manufacturing supplies used

in production. The Mercedes-Benz Group usually coun-

teracts the risk of short-term fluctuations in raw-mate-

rial prices by means of sliding-price clauses in the sup-

ply contracts. A small portion of the raw-material price

risk relating to the forecasted procurement of precious

metals is hedged with the use of derivative financial

instruments. The Mercedes-Benz Group has decided to

suspend these hedging strategies for precious metals

until further notice and to phase out existing hedges.

Hꢋ ꢍꢝꢋ ꢔꢘꢘꢑꢙꢌ ꢎꢚꢌ ꢝ. When designating derivative finan-

cial instruments, a hedge ratio of 1 is generally applied.

The respective volumes, interest curves, currencies and

maturity dates are generally matched. In the case of

combined derivative financial instruments for interest

currency hedges, the cross-currency basis spread is not

designated into the hedge relationship, but deferred as

a hedging cost in other comprehensive income and rec-

ognised in profit or loss over the hedge term. The Group

ensures an economic relationship between the underly- Table



D.91 shows the period-end, high, low and aver-

ing transaction and the hedging instrument by ensuring

consistency of interest rates, maturity terms and nomi-

nal amounts. In the case of hedging for ABS transac-

tions of private placements, the risk of the market inter-

est rate component is partly protected, which

historically covers on average more than 70% of the

change in value of the total interest rate. The effective-

ness of the hedge is assessed at the beginning and

age value-at-risk figures for the 2021 and 2020 portfolio

of derivative financial instruments used to hedge raw

material price risk. Average exposure has been com-

puted on an end-of-quarter basis. The transactions

underlying the derivative financial instruments are not

included in the value-at-risk presentation. See also

table



D.86.

302

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

In 2021, the decrease of the value at risk from commod-

3ꢃ. Segment reporting

ity hedging was caused by a decrease in the hedging

volume. The calculation of the averages includes the

derivative hedging transactions of the Daimler commer-

cial vehicle business. The hedging volumes disposed of

as part of the deconsolidation of the Daimler commer-

cial vehicle business have no significant effect on the

value at risk from commodity hedging.

Reportable segments

As of 31 December 2021, the Group comprises the seg-

ments Mercedes-Benz Cars, Mercedes-Benz Vans and

Mercedes-Benz Mobility (formerly Daimler Mobility).

With the spin-off and hive-down on 9 December 2021,

the former Daimler Trucks & Buses segment is mainly

presented in the reconciliation. The segment figures for

2020 have been adjusted accordingly. The Mercedes-

Benz Mobility segment includes the assets and liabili-

ties of Daimler’s commercial vehicle business until the

time of the spin-off and hive-down. The breakdown of

segments corresponds to the internal organisational

and reporting structure.

Hꢋ ꢍꢝꢋ ꢔꢘꢘꢑꢙꢌ ꢎꢚꢌ ꢝ. When designating currency deriva-

tive financial instruments, the Mercedes-Benz Group

generally applies a hedge ratio of 1. The respective vol-

umes and parameters relevant for the valuation of the

hedged item and the hedging instrument as well as

maturity dates are matched. The Group ensures an eco-

nomic relationship between the hedged item and the

hedging instrument by ensuring consistency of volumes, The Mercedes-Benz Cars and Mercedes-Benz Vans seg-

parameters relevant for valuation and maturity terms.

Effectiveness is assessed at initial designation and dur-

ing the hedge term. Possible sources of ineffectiveness

of the hedge relationship are:

ments are aggregated into one reportable segment due

to their comparable long-term average return on sales

as well as their comparable revenue development and

capital intensity. In addition, both segments are compa-

rable with regard to the nature of the products and ser-

vices offered as well as their brands, sales channels and

customer profiles. As a result of the transformation pro-

cess, the two segments will no longer be aggregated

from 1 January 2022.

–

Effects of the credit risk on the fair value of the deriva-

tive instrument in use which are not reflected in the

change in the hedged commodity price risk.

–

Changes in the timing of the hedged transactions.

The Mercedes-Benz Cars & Vans reportable segment

develops, manufactures and sells cars comprising pre-

mium and luxury vehicles of the Mercedes-Benz brand

including the brands Mercedes-AMG, Mercedes-May-

Equity-price risk

The Mercedes-Benz Group predominantly holds invest-

ments in shares of companies which are classified as

long-term investments, some of which are accounted for bach and Mercedes-EQ as well as small cars under the

using the equity method, such as BAIC Motor. This also

includes the share in Daimler Truck Holding AG. These

investments are not included in a market risk assess-

ment by the Group.

smart brand. Corresponding spare parts and accesso-

ries are also sold. The Mercedes me brand comprises

the ecosystem of Mercedes-Benz. The vans are sold

under the Mercedes-Benz brand.

The Mercedes-Benz Mobility segment supports the

sales of the Group’s vehicle segments worldwide. Its

product portfolio primarily comprises tailored financing

and leasing packages for end-customers and dealers,

brokering of automotive insurance and banking services.

The segment also provides services such as fleet man-

agement in Europe, which primarily takes place through

the Athlon brand. Furthermore, Mercedes-Benz Mobility

is active in the area of innovative mobility services.

303

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Internal management and reporting structure

Non-current assets consist of intangible assets, prop-

erty, plant and equipment and equipment on operating

leases.

The internal management and reporting structure at the

Mercedes-Benz Group is principally based on the

accounting policies that are described in Note 1 in the

summary of significant accounting policies according to

IFRS.

Capital expenditures for intangible assets and property,

plant and equipment reflect the cash-effective addi-

tions to these intangible assets and property, plant and

equipment insofar as they do not relate to capitalised

borrowing costs or goodwill.

The measure of the Group’s profit or loss used by the

Mercedes-Benz Group’s management and reporting

structure is referred to as “EBIT”. EBIT comprises gross

profit, selling and general administrative expenses,

research and non-capitalised development costs, other

operating income/expense, and the profit/loss on equi-

ty-method investments, net, as well as other financial

income/expense, net.

Depreciation and amortisation may also include impair-

ments insofar as they do not relate to goodwill impair-

ment according to IAS 3ꢉ.

Amortisation of capitalised borrowing costs is not

included in the amortisation of intangible assets or

depreciation of property, plant and equipment.

Intersegment revenue is generally recorded at prices

that approximate market terms.

Reconciliation

Transactions between the segments are generally elimi-

nated in the reconciliation. The elimination of effects

connected with intra-Group transfers of equity invest-

ments takes place in the segments involved. The effects

on earnings at the Group are recognised upon comple-

tion of the external transaction in the corresponding

segment. Some simplifications have been made in the

segment reporting with regard to accounting for leases

in connection with intra-Group transactions.

The reconciliation includes functions and services pro-

vided by the Group’s headquarters as well as by other

companies of the Group not allocated to the segments.

In addition, the reconciliation includes gains and/or

losses at the corporate level and the effects on earnings

of eliminating intra-Group transactions between the

segments.

Since the spin-off and hive-down of the Daimler com-

mercial vehicle business, both the operating profit or

loss of the former Daimler Trucks & Buses segment until

to 9 December 2021 and the profit or loss from the

equity interest in Daimler Truck Holding AG have been

shown in the reconciliation. The reconciliation also

includes the profit or loss from the deconsolidation of

the Daimler commercial vehicle business.

Segment assets principally comprise all assets. The

Mercedes-Benz Cars & Vans segment’s assets exclude

income-tax assets, assets from defined-benefit pension

plans and other post-employment benefit plans, and

certain financial assets (including liquidity). Segment

liabilities principally comprise all liabilities. The

Mercedes-Benz Cars & Vans segment’s liabilities

exclude income-tax liabilities, liabilities from defined

benefit pension plans and other post-employment ben-

efit plans, and certain financial liabilities (including

financing liabilities).

The residual-value risks associated with the Group’s

operating leases and finance-lease receivables are gen-

erally borne by Mercedes-Benz Cars & Vans, which man-

ufactured the leased equipment. Risk sharing is based

on agreements between Mercedes-Benz Cars & Vans

and Mercedes-Benz Mobility; the terms vary by vehicle

segment and geographic region.

304

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Table



D.92 presents segment information at and for

the years ended 31 December 2021 and 2020 for contin-

uing and discontinued operations.

D.ꢉꢄ

Segment information

Mercedes-Benz Mercedes-Benz

Total

Recon- Mercedes-Benz

Cars & Vans

Mobility

Segments

ciliation

Group

In millions of euros

ꢄꢅꢄ1

External revenue

ꢀ06,ꢂ7ꢂ

ꢂ,275

26,800

ꢀ,ꢀꢁꢀ

ꢀꢂꢂ,ꢀ7ꢂ

ꢁ,ꢁꢀ6

ꢂꢁ,798

-ꢁ,ꢁꢀ6

ꢂ0,ꢂ82

ꢀ67,97ꢀ

-

Intersegment revenue

Total revenue from continuing and discontinued operations

ꢀ09,6ꢁ8

27,9ꢁꢀ

ꢀꢂ7,589

ꢀ67,97ꢀ

Segment profit/loss (EBIT) from continuing and discontinued

operations

ꢀꢂ,626

ꢀ,58ꢁ

ꢂ,ꢁ9ꢂ

-ꢀꢁ0

ꢀ7,ꢀꢀ9

ꢀ,ꢁꢁꢁ

ꢀꢀ,950

52

29,069

ꢀ,ꢁ96

thereof profit/loss on equity-method investments

thereof profit/loss from compounding and effects from changes

in discount rates of provisions for other risks

96

-2

9ꢁ

27

ꢀ2ꢀ

Segment assets

95,758

ꢁ,056

ꢀꢁ6,ꢀ96

ꢁ7ꢀ

2ꢁꢀ,95ꢁ

ꢁ,527

-8,5ꢂ8

9,06ꢀ

2ꢂꢂ,ꢁꢀ6

ꢀꢂ,588

thereof carrying amounts of equity-method investments

Segment liabilities

60,070

ꢀꢂꢀ,7ꢁ8

ꢀ9ꢀ,8ꢀ8

-ꢀ6,0ꢀꢀ

ꢀ75,807

Additions to

non-current assets

ꢀꢁ,222

2,ꢁ56

ꢂ,787

ꢀꢂ,ꢀ25

6ꢀ

27,ꢂꢁ7

2,5ꢀ7

ꢂ,865

2,ꢀꢀ9

22ꢁ

29,ꢁ66

2,7ꢁꢀ

ꢁ,579

thereof investments in intangible assets

thereof investments in property, plant and equipment

78

7ꢀꢁ

Depreciation and amortisation of

non-current assets

7,878

2,ꢂꢀ2

ꢂ,868

6,ꢀ8ꢂ

79

ꢀꢁ,06ꢀ

2,ꢂ9ꢀ

ꢂ,9ꢂ2

ꢀ,005

ꢀ6ꢀ

ꢀ5,066

2,552

ꢁ,ꢁꢂ0

thereof amortisation of intangible assets

thereof depreciation of property, plant and equipment

6ꢁ

ꢁ98

305

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Mercedes-Benz Mercedes-Benz

Total

Recon- Mercedes-Benz

Cars & Vans

Mobilitiy

Segments

ciliation¹

Group

In millions of euros

ꢄꢅꢄꢅ

External revenue

ꢇꢃ,ꢀꢆꢈ

ꢂ,ꢂꢀꢇ

ꢀꢃ,ꢅꢄ6

ꢄ,ꢅꢅꢂ

ꢄꢀꢄ,ꢁ6ꢂ

ꢃ,ꢀꢄꢀ

ꢂꢂ,ꢀꢆ6

-ꢃ,ꢀꢄꢀ

ꢀꢅ,ꢁꢂꢆ

ꢄꢃꢆ,ꢂꢁꢇ

-

Intersegment revenue

Total revenue from continuing and discontinued operations

ꢇꢅ,ꢃꢈ6

ꢀꢈ,6ꢇꢇ

ꢄꢀ6,ꢀꢈꢃ

ꢄꢃꢆ,ꢂꢁꢇ

Segment profit/loss (EBIT) from continuing and discontinued

operations

ꢃ,ꢄꢈꢀ

ꢄ,ꢆꢄꢁ

ꢄ,ꢆꢂ6

-ꢂ6ꢁ

6,6ꢁꢅ

ꢄ,ꢁꢃꢁ

-ꢃ

6,6ꢁꢂ

ꢈꢇꢈ

thereof profit/loss on equity-method investments

-ꢀꢃꢂ

thereof profit/loss from compounding and effects from changes

in discount rates of provisions for other risks

-ꢄꢄꢈ

-ꢀ

-ꢄꢄꢇ

-ꢆꢇ

-ꢄ6ꢅ

Segment assets

ꢇꢄ,ꢂ6ꢁ

ꢂ,ꢃꢅ6

ꢄ6ꢄ,ꢀ6ꢃ

ꢈꢆ6

ꢀꢃꢀ,6ꢀꢃ

ꢆ,ꢂꢂꢀ

ꢃ,ꢄꢆꢇ

ꢅꢃꢈ

ꢀꢃꢈ,ꢈꢈꢆ

ꢃ,ꢄꢅꢇ

thereof carrying amounts of equity-method investments

Segment liabilities

6ꢁ,ꢄ6ꢅ

ꢄꢆ6,ꢇꢃꢁ

ꢀꢁꢈ,ꢄꢄꢅ

-ꢃ,ꢆꢆꢅ

ꢀꢁꢄ,6ꢈꢁ

Additions to

non-current assets

ꢄꢃ,ꢇ6ꢃ

ꢀ,6ꢄꢄ

ꢆ,ꢅ6ꢀ

ꢄꢂ,ꢀ6ꢆ

ꢆꢇ

ꢀꢇ,ꢀꢀꢇ

ꢀ,66ꢁ

ꢆ,ꢇꢁꢄ

ꢀ,ꢁꢄꢆ

ꢄꢃꢇ

ꢂꢄ,ꢀꢆꢂ

ꢀ,ꢅꢄꢇ

ꢃ,ꢈꢆꢄ

thereof investments in intangible assets

thereof investments in property, plant and equipment

ꢂꢇ

ꢅꢆꢁ

Depreciation and amortisation of

non-current assets

ꢅ,ꢅꢇꢂ

ꢀ,ꢁꢂꢅ

ꢃ,ꢀ6ꢃ

ꢈ,ꢀꢁꢆ

ꢀꢀꢈ

ꢈꢈ

ꢄ6,ꢁꢇꢈ

ꢀ,ꢀ6ꢃ

ꢃ,ꢂꢆꢀ

ꢀ,ꢁꢆ6

ꢀꢇꢆ

ꢄꢅ,ꢄꢆꢂ

ꢀ,ꢃꢃꢇ

6,ꢂꢇꢅ

thereof amortisation of intangible assets

thereof depreciation of property, plant and equipment

ꢄ,ꢁꢃ6

1

The segment assets and segment liabilities as well as the additions to non-current assets of the former Daimler Trucks & Buses segment are also shown in the reconciliation in 2020.

30ꢉ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Reconciliation

Tables D.93 and

D.ꢉ3



D.94 show the reconciliation of

Reconciliation of revenue to Group figures

revenue and EBIT according to segment reporting to the

Consolidated Statement of Income.

202ꢀ

ꢀꢁꢀꢁ

In millions of euros

The reconciliation of segment amounts to relevant

Revenue as shown in segment reporting

ꢀ67,97ꢀ

-ꢂꢁ,078

ꢄꢃꢆ,ꢂꢁꢇ

-ꢂꢀ,ꢃꢂꢄ

amounts for the Group is shown in table

table D.95.



D.94 and

_l_e_s_s_r_e_v_e_n_u_e_f_r_o_m_d_i_s_c_o_n_t_i_n_u_e_d_o_p_e_r_a_t_i_o_n_s1



Total revenue as shown in the Consolidated

Statement of Income/Loss

ꢀꢂꢂ,89ꢂ

ꢄꢀꢄ,ꢈꢈꢅ

In the profit/loss from equity-method investments

the disclosures for the equity-method loss of €1 million

of the new Daimler Truck Group including the spun-off

activities of the financial services business, represent

the best possible estimates for the period between

1

Revenue inlcudes eliminations between continuing and discontinued operations. The

revenue of the former Daimler Trucks & Buses segment amounts to €36,219 million.

D.ꢉ4

10 December and 31 December 2021. In addition, earn-

Reconciliation of EBIT to Group figures

ings are reduced in both years by impairments of the

carrying amount of the investment in BAIC Motor (of

202ꢀ

ꢀꢁꢀꢁ

In millions of euros

€120 million in 2021 and €330 million in 2020).

Total of segments’ profit/loss (EBIT)

ꢀ7,ꢀꢀ9

9,2ꢀ6

6,6ꢁꢅ

In the line item other reconciliation items the earnings

of the former Daimler Trucks & Buses segment of

Profit from spin-off and hive-down (after trans-

action costs)

-

€

2,48ꢉ million until 9 December 2021 are included

Profit/loss on equity-method investments

from continuing operations

-9ꢂ

2,8ꢀ7

ꢀ0

-ꢂꢁꢂ

ꢄꢈ6

(including continued scheduled depreciation and meas-

Other reconciliation items

Eliminations

urement of equity-method investments, excluding the

profit or loss of financial services and in accordance

with the recognition and measurement principles

described in Note 1 of the Notes to the Consolidated

Financial Statements). The depreciation and amortisa-

tion no longer to be recognised in accordance with

IFRS 5 are also inlcuded in this line item and the equi-

ty-method measurement of the non-current assets dis-

posed in the course of the deconsolidation and the

non-current assets held for sale of the Mercedes-Benz

Mobility segment are also reported in the reconciliation.

In contrast, the expenses from the measurement of the

Mercedes-Benz Mobility disposal groups held for sale

are included at fair value less costs to sell. In addition,

the costs associated with the spin-off and hive-down

attributable to the ongoing business of discontinued

operations are reported in this line items.

ꢄꢀꢀ

EBIT as shown in segment reporting

less EBIT from discontinued operations

29,069

-ꢀꢂ,0ꢁꢀ

6,6ꢁꢂ

-ꢃꢄꢀ

EBIT as shown in the Consolidated Statement of

Income/Loss

ꢀ6,028

6,ꢁꢇꢄ

307

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢉꢃ

Revenue and non-current assets by region

Reconciliation segment assets and liabilities

to Group figures

With respect to information on geographical regions,

revenue from continuing operations is allocated to

countries based on the location of the customer;

non-current assets are presented according to the

physical location of these assets.

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

Total of segments’ assets

2ꢁꢀ,95ꢁ

8,762

299

ꢀꢃꢀ,6ꢀꢃ

-

Equity-method investment in DTHAG

Other equity-method investments¹

Segment assets Daimler Trucks & Buses²

Income-tax assets³

Revenue from external customers and non-current

assets by region are shown in table D.96.



ꢂꢂꢁ

-

ꢀꢆ,ꢅꢂꢁ

ꢃ,6ꢄꢃ

-ꢀꢃ,6ꢀ6

ꢀꢃꢈ,ꢈꢈꢆ

2,906

-20,505

2ꢂꢂ,ꢁꢀ6

Other reconciliation items and eliminations

Segment assets Group

Unallocated financial assets (including

liquidity) and assets from pensions and similar

obligations³

26,ꢁꢀ5

ꢀꢈ,ꢇ6ꢂ

Total assets Group

259,8ꢂꢀ

ꢀꢅꢃ,ꢈꢂꢈ

Total of segments’ liabilities

ꢀ9ꢀ,8ꢀ8

-

ꢀꢁꢈ,ꢄꢄꢅ

ꢄꢈ,ꢁꢁꢁ

ꢂ,ꢆꢇꢇ

Segment liabilities Daimler Trucks & Buses²

Income-tax liabilities³

ꢁ,72ꢀ

-20,7ꢂ2

ꢀ75,807

Other reconciliation items and eliminations

Segment liabilities Group

-ꢀꢃ,ꢇꢆꢈ

ꢀꢁꢄ,6ꢈꢁ

Unallocated financial liabilities and liabilities

from pensions and similar obligations³

ꢀ0,857

7ꢂ,ꢀ67

ꢀꢄ,ꢅꢄꢇ

6ꢀ,ꢀꢆꢅ

Total equity Group

Total equity and liabilities Group

259,8ꢂꢀ

ꢀꢅꢃ,ꢈꢂꢈ

1

This mainly comprises the carrying amount of the investment in BAIC Motor.

2

3

The former Daimler Trucks & Buses segment.

Unless these are attributable to Mercedes-Benz Mobility.

D.ꢉꢆ

Revenue and non-current assets by region

Revenue

Non-current assets

2

02ꢀ

ꢀꢁꢀꢁ

202ꢀ

ꢀꢁꢀꢁ

In millions of euros

Europe

55,697

20,7ꢂꢂ

ꢂꢂ,ꢀ05

29,28ꢁ

ꢁ0,ꢀ26

25,ꢀ7ꢂ

ꢁ,965

ꢃꢆ,ꢄꢅꢆ

ꢀꢄ,ꢂꢁꢄ

ꢀꢇ,ꢀꢅꢄ

ꢀꢃ,ꢇꢁꢁ

ꢂꢂ,ꢇꢇꢃ

ꢀꢁ,ꢈꢆ6

ꢆ,ꢂꢄꢅ

62,ꢁ0ꢀ

ꢁꢁ,ꢁ2ꢀ

22,ꢀ8ꢀ

20,0ꢀ0

ꢀ,660

6ꢅ,ꢆꢃ6

ꢆꢇ,ꢅꢄꢇ

ꢀꢆ,ꢈ6ꢆ

ꢀꢄ,ꢇꢈꢇ

ꢆ,ꢄꢅꢇ

thereof Germany

North America

thereof United States

Asia

thereof China

Other markets

56ꢁ

ꢆꢈꢆ

ꢀ,09ꢂ

87,ꢂꢂ5

ꢄ,ꢈꢅꢅ

ꢀꢂꢂ,89ꢂ

ꢄꢀꢄ,ꢈꢈꢅ

ꢇꢇ,ꢄꢇꢈ

308

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

3

ꢆ. Capital management

The cost of capital of the Group’s average net assets is

reflected in value added. Value added shows the extent

to which the Group achieves or exceeds the minimum

return requirements of the shareholders and creditors,

thus creating additional value. The required rate of

return on net assets, and thus the cost of capital, are

derived from the minimum rates of return that investors

expect on their invested capital. The Group’s cost of

capital comprises the cost of equity as well as the costs

of debt and pension obligations unless these are allo-

cated to Mercedes-Benz Mobility; in addition, the

expected returns on liquidity and on the plan assets of

the pension funds which are not allocated to Mercedes-

Benz Mobility are considered with the opposite sign. In

the reporting period, the cost of capital used for our

internal capital management amounted to 8% after

taxes.

Net assets and value added represent the basis for cap-

ital management at the Mercedes-Benz Group. The

assets and liabilities of the segments in accordance

with IFRS provide the basis for the determination of net

assets at Group level. Mercedes-Benz Cars and

Mercedes-Benz Vans are accountable for the net oper-

ating assets; all assets, liabilities and provisions for

which they are responsible for in day-to-day operations

are therefore allocated to them. Performance measure-

ment at Mercedes-Benz Mobility is on an equity basis,

in line with the usual practice in the banking business.

Net assets at Group level additionally include assets

and liabilities from income taxes as well as other corpo-

rate items and eliminations.

The average annual net assets are calculated from the

average quarterly net assets. The average quarterly net

assets are calculated as an average of the net assets at

the beginning and the end of the quarter and are shown

The objective of capital management is to increase

value added, among other things, by optimising the cost

of capital. This is achieved on the one hand by the man-

agement of the net assets, e.g., by optimising working

capital, which is within the operational responsibility of

the segments. In addition, taking into account legal reg-

ulations, the Mercedes-Benz Group strives to optimise

the costs and risks of its capital structure and, conse-

quently, the cost of capital, with due consideration of

applicable law. Examples of this include a balanced

relationship between equity and financial liabilities as

well as an appropriate level of liquidity, oriented

towards the operational requirements.

in table



D.97.

D.ꢉꢇ

Average net assets

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

Mercedes-Benz Cars & Vans

ꢂꢂ,8ꢂ5

ꢀ5,68ꢀ

ꢁ9,5ꢀ6

7,625

ꢀ,ꢁ56

ꢀꢂꢀ

ꢂꢀ,ꢈ6ꢅ

ꢄꢆ,6ꢁꢄ

ꢆꢈ,ꢂ6ꢇ

ꢇ,ꢃꢄꢂ

ꢆ6ꢂ

_M_e_r_c_e_d_e_s_-_B_e_n_z_M_o_b_i_l_i_t_y1

Net assets of the segments

Daimler Trucks & Buses²

3

ꢇ. Earnings per share

Equity-method investments³

Assets and liabilities from income taxes⁴

Other corporate items and eliminations⁴

Net assets of the Mercedes-Benz Group

ꢀ,ꢁꢅꢅ

ꢆꢂ6

The calculation of basic and diluted earnings per share

is based on net profit attributable to shareholders of

Mercedes-Benz Group AG. Following the expiration of

the stock option plan in 2014, dilutive effects no longer

exist. The profit attributable to shareholders of

Mercedes-Benz Group AG (basic and diluted) amounts

to €23,00ꢉ million (2020: €3,ꢉ27 million). The weighted

average number of shares outstanding (basic and

diluted) amounts to 1,0ꢉ9.8 million (2020: 1,0ꢉ9.8 mil-

lion).

-ꢂꢂꢀ

58,ꢂ97

ꢃꢇ,ꢅ6ꢇ

1

Equity.

2

3

The former Daimler Trucks & Buses segment.

Unless allocated to the segments.

Unless allocated to Mercedes-Benz Mobility.

309

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

3

ꢈ. Related-party disclosures

dealers or other third parties not related to the

Mercedes-Benz Group. Mercedes-Benz Mobility usually

receives a residual-value guarantee from Daimler Truck

for this leased equipment in connection with the obliga-

tion to return the respective commercial vehicles to

Daimler Truck. At 31 December 2021 this guarantee was

€ꢉ85 million.

Related parties (companies or persons) are deemed to

be associated companies, joint ventures and unconsoli-

dated subsidiaries, as well as persons who exercise a

significant influence on the financial and business pol-

icy of the Mercedes-Benz Group. The latter category

includes all persons in key positions and their close

family members. At the Mercedes-Benz Group, those

persons are the members of the Board of Management

and of the Supervisory Board.

Additionally, the Mercedes-Benz Group will continue the

leasing and sales-financing business for Daimler Truck’s

commercial vehicles and buses in some markets. These

vehicles are directly acquired from Daimler Truck and

leased to the end customer. Insofar as a mandatory

vehicle return has been agreed, there is a rental con-

tract (head lease) between Mercedes-Benz Mobility and

Daimler Truck. The contract between Mercedes-Benz

Mobility and the end customer constitutes a sublease in

this respect. The receivables and right-of-use assets

Related companies

Business transactions with related companies are gen-

erally carried out at market terms. Most of the goods

and services supplied between the Group and related

companies comprise transactions with associated com-

panies and joint ventures and are shown in table



D.98.



shown in Table D.98 therefore include receivables

from residual-value guarantees of €1,ꢉ17 million shown

in receivables from financial services and right-of-use

assets of €1,0ꢉ0 million vis-à-vis Daimler Truck shown in

Associated companies

As shown in Table D.98, the business relationships



with associated companies mainly relate to Daimler

Truck Holding AG (Daimler Truck), which is allocated to



leased assets. Furthermore, Table D.98 shows right-

of-use-assets of Daimler Greater China Ltd. vis-à-vis

the reconciliation, and to LSH Auto International Limited BBAC of €103 million resulting from a leasing contract.

LSHAI) and Beijing Benz Automotive Co., Ltd. (BBAC),

(

which are allocated to the Mercedes-Benz Cars & Vans

segment.

In addition, the Mercedes-Benz Group holds a minority

interest of €209 million in real estate companies con-

trolled by Daimler Truck Group, which is shown as debt

instruments in other financial assets.

Upon the spin-off taking effect, Daimler Truck Hold-

ing AG is reported as an associated company. There are

numerous relationships in the scope of ordinary busi-

ness between the Mercedes-Benz Group and Daimler

Truck, for example, the purchase and sale of goods and

services, leasing agreements and the interim provision

of services by corporate functions such as IT and

Human Resources. After completion of the spin-off,

loans of the Daimler Truck Group of €ꢉ.9 billion for

financing of purchase prices of parts of the financial

services business included in the Daimler commercial

Off-balance-sheet guarantees amounted to €5ꢉ8 mil-

lion for associated companies (2020: €0 million) thereof

€5ꢉ8 million vis-à-vis Daimler Truck.

Joint ventures

In business relationships with joint ventures, significant

sales of goods and services took place with Fujian Benz

Automotive Co., Ltd. (FBAC), which is allocated to the

Mercedes-Benz Cars & Vans segment. In addition, other

vehicle business and transferred before the spin-off and operating income of €154 million resulted in the year

hive-down were repaid to the Mercedes-Benz Group in

December. Further assets and liabilities of the Daimler

commercial vehicle business will be transferred in 2022.

2020 from the contribution of the smart brand to the

joint venture smart Automobile Co., Ltd.

The leased equipment of the Mercedes-Benz Mobility

segment includes commercial vehicles produced by

Daimler Truck which have been acquired from external

310

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Note 14 provides further details of the business opera-

The provisions existing in this context, in particular the

procedure for regulating the internal settlements

between the participating legal entities, are regulated in

the hive-down agreement of 25 March 2019.

tions of the significant associated companies and joint

ventures, as well as of the significant transactions in the

years 2021 and 2020.

Contributions to plan assets

The aforementioned period is ten years for pension obli-

Daimler Pension Trust e.V. manages the plan assets on a gations based on the German Company Pensions Act

fiduciary basis to cover pension obligations in Germany

and is therefore a related company of the Mercedes-

Benz Group. Another related company is Daimler Pen-

(BetrAVG) that existed before the hive-down took effect.

Mercedes-Benz Group AG and Mercedes-Benz AG do

not expect any outflow of liquidity from the respective

sionsfonds AG. Mercedes-Benz Group AG bears non-sig- other legal entity due to the plan assets available in a

nificant expenses and provides services for both

companies. See also Note 23 and Note 41 for further

information.

sufficient volume.

The potential obligations for the Mercedes-Benz Group

resulting from Section 133 of the German Transforma-

tion Act (UmwG) amount to €1,ꢉ92 million as of

31 December 2021, thereof €447 million due in 2022

(2020: €2,582 million, thereof €9ꢉ7 million due in 2021).

According to the current appraisal, an actual claim

against Mercedes-Benz Group AG or Mercedes-Benz AG

is considered to be unlikely.

Subsequent liability

In 2019, Mercedes-Benz Group AG hived down assets

and liabilities of the Mercedes-Benz Cars & Vans seg-

ment into Mercedes-Benz AG and of the Daimler Trucks

&

Buses segment into Daimler Truck AG. As legal entities

involved in the hive-down, Mercedes-Benz Group AG,

Mercedes-Benz AG and Daimler Truck AG are jointly and

severally liable pursuant to Section 133 Subsections 1

and 3 of the German Transformation Act (UmwG) for the

liabilities of Mercedes-Benz Group AG incurred prior to

the effective date of the hive-down. Those of the afore-

mentioned legal entities to which the relevant liabilities

are not assigned under the hive-down agreement are

liable, however, only for those liabilities if they fall due

within five years of the announcement of the entry of

the hive-down in the commercial register of Mercedes-

Benz Group AG and claims therefrom are established in

court or in another manner as described in Section 133

of the German Transformation Act (UmwG). The spin-off

and hive-down of the Daimler commercial vehicle busi-

ness results in a subsequent liability relationship out-

side the Group.

Related persons

Throughout the world, the Group has business relation-

ships with numerous entities that are customers and/or

suppliers of the Group. Those customers and/or suppli-

ers include companies that have a connection with

some of the members of the Board of Management or of

the Supervisory Board and close family members of

those board members of Mercedes-Benz Group AG or of

its subsidiaries.

Board of Management and Supervisory Board members

and close family members of those board members may

also purchase goods and services from Mercedes-Benz

Group AG or its subsidiaries as customers. When such

business relationships exist, transactions are concluded

at market terms.

See Note 39 for information on the remuneration of the

board members.

311

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.ꢉꢈ

Transactions with related companies

Sales of goods

and services

Purchase of goods

and services

Receivables and

and other income¹

and other expense¹

right-of-use-assets

Payables

at ꢂꢄ December²

at ꢂꢄ December³

2

02ꢀ

ꢀꢁꢀꢁ

202ꢀ

ꢀꢁꢀꢁ

202ꢀ

ꢀꢁꢀꢁ

202ꢀ

ꢀꢁꢀꢁ

In millions of euros

Associated companies

thereof Daimler Truck⁴

thereof LSHAI

ꢀ5,ꢁ66

80

ꢄꢂ,ꢅꢀ6

-

968

ꢀ2ꢂ

5ꢂ5

29ꢁ

872

ꢈꢇꢄ

-

6,027

ꢂ,ꢁ26

565

ꢀ,ꢇꢆ6

-

72ꢂ

5ꢂꢂ

2ꢀ

ꢄꢁꢄ

-

8,ꢁ65

6,57ꢂ

ꢀ,7ꢂ7

6,ꢇꢅꢅ

6,ꢆꢈꢈ

ꢄ,ꢀꢇ6

ꢃꢁꢁ

ꢀꢈꢆ

ꢆꢂꢇ

ꢈꢄꢂ

ꢀ,ꢄꢈꢅ

ꢀꢈꢂ

ꢄꢈ

thereof BBAC

2,007

ꢀ5ꢂ

ꢀ68

ꢀꢂ9

ꢈ6

ꢄꢂꢄ

Joint ventures

1

Transactions of the hived-down Daimler commercial vehicle business with related companies are included until 9 December 2021.

2

3

4

After total loss allowances of €22 million (31 December 2020: €70 million).

Including liabilities from default risks from guarantees for related parties.

Since 10 December 2021, Daimler Truck Holding AG is a related company for the Mercedes-Benz Group.

3

ꢉ. Remuneration of the members of the Board of

The members of the Supervisory Board are solely

Management and the Supervisory Board

granted short-term fixed remuneration for their board

and committee activities, the amounts of which depend

on their functions in the Supervisory Board. With the

exception of remuneration paid to the members repre-

senting the employees in accordance with their con-

tracts of employment, no remuneration was paid in 2021

for services provided personally beyond board and

committee activities, in particular for advisory or agency

services. The remuneration for 2020 of the Supervisory

Board reflects the voluntary waiver of 20% of the fixed

remuneration and the attendance fee between 1 April

2020 and 31 December 2020.

Remuneration granted in 2021 to the members of the

Board of Management and the Supervisory Board who

were active in 2021 is shown in table



D.99.

Expenses for variable remuneration of the Board of

Management with a long-term incentive effect, as

shown in table



D.99, result from the ongoing meas-

urement at fair value at each balance sheet date of all

rights granted and not yet due under the Performance

Phantom Share Plans (PPSP), i.e., for the plans of the

years 2018 to 2021. In 2021, the active members of the

Board of Management were granted 170,ꢉ70 (2020:

The members of the Board of Management do not

receive any remuneration for their board activities in the

boards of the subsidiaries. These activities are remuner-

ated with the remuneration at Mercedes-Benz Group AG.

215,743) phantom shares in connection with the PPSP;

the fair value of these phantom shares at the grant date

was €11.1 million (2020: €9.2 million). See Note 22 for

additional information on share-based payment of the

members of the Board of Management.

No advance payments or loans were made or abated to

members of the Board of Management or to the mem-

bers of the Supervisory Board of Mercedes-Benz

Group AG in 2021.

According to Section 314 Subsection 1 No. ꢉa of the

German Commercial Code (HGB), the overall remunera-

tion granted to the members of the Board of Manage-

ment, excluding service cost resulting from entitlements The payments made in 2021 to former members of the

to post-employment benefits, amounted to €35.2 mil-

lion (2020: €28.1 million).

Board of Management of Mercedes-Benz Group AG and

their survivors amounted to €19.1 million (2020:

€

2ꢉ.0 million). The pension provisions for former

312

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

members of the Board of Management and their survi-

vors amounted to €334.3 million as of 31 December

021 (2020: €3ꢉ2.5 million).

4ꢅ. Auditor fees

2

The shareholders of the former Daimler AG elected

KPMG AG Wirtschaftsprüfungsgesellschaft as the exter-

nal auditor at the Annual General Meeting held on

Individualised information on the remuneration of the

members of the Board of Management and the Supervi-

sory Board of Mercedes-Benz Group AG is presented in

the Remuneration Report.

31 March 2021. Table



D.100 shows the fees for ser-

vices provided by KPMG AG Wirtschaftsprüfungs-

gesellschaft and the companies of the worldwide KPMG

network to Mercedes-Benz Group AG, the consolidated

subsidiaries and joint operations. These also include the

fees of the companies of the former Daimler Trucks &

Buses segment incurred until the date of the spin-off

and hive-down of the Daimler commercial vehicle busi-

ness.

D.ꢉꢉ

Remuneration of the members of the Board of Management

and the Supervisory Board

2

02ꢀ

ꢀꢁꢀꢁ

In millions of euros

Audit services relate to the audit of Mercedes-Benz

Group’s Consolidated Financial Statements and the

year-end financial statements, as well as to all services

required for the audit including the reviews of interim

financial statements, the accounting-related audit of the

internal control system, and accounting-related reviews

of the introduction of IT systems and processes.

Remuneration of the Board of

Management

Fixed remuneration (base salary)¹

9.ꢀ

7.5

ꢈ.ꢅ

ꢃ.6

ꢃ.ꢃ

Short-term variable remuneration

(

50% of annual bonus)

Mid-term variable remuneration

50% of annual bonus, “deferral”)

(

Variable remuneration with a long-term

incentive effect (PPSP)

Other attestation services were particularly provided for

voluntary project-supporting reviews of IT systems and

processes, reviews in connection with compliance man-

agement systems, or the issuance of comfort letters as

well as for services within the scope of the spin-off and

hive-down.

22.9

2.ꢀ

-

ꢈ.ꢂ

ꢀ.ꢄ

-

Post-employment benefits (service cost)

Termination benefits

ꢁ

9.ꢀ

ꢀꢅ.ꢂ

Remuneration of the Supervisory Board²

6.2

5.ꢂ

ꢃ.ꢃ

5

ꢂꢂ.ꢅ

Tax services primarily relate to value-added tax advisory.

1

With consideration of the voluntary waiver by the Board of Management of 20% of the

fixed remuneration from 1 April to 31 December 2020.

2

With consideration of the voluntary waiver by the Supervisory Board of 20% of the fixed

remuneration and of the attendance fee from 1 April to 31 December 2020 and including

remuneration for the members of the Supervisory Boards of Mercedes-Benz AG and of

Daimler Truck AG pursuant to Section 314 Subsection 1 No. 6a of the German Commer-

cial Code (HGB).

Other services were mainly commissioned in connection

with IT and process consulting and quality assurance

not relevant to accounting.

The increase in auditor fees compared with the previous

year is mainly due to expenses in connection with the

spin-off and hive-down.

313

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.1ꢅꢅ

profitability, cash flows and financial position in 2022

Auditor fees

cannot be ruled out at this time. Due to the volatile geo-

political situation, the effects cannot be quantified at

present.

2

02ꢀ

ꢁ0

ꢀꢁꢀꢁ

ꢆꢀ

In millions of euros

Audit services

At 31 December 2021, the Russian subsidiaries had total

assets of approximately €2 billion. In addition, Russian

subsidiaries have liabilities to banks of approximately

€1 billion, for which the Group has issued a global guar-

antee.

thereof KPMG AG

Wirtschaftsprüfungsgesellschaft

25

ꢀ9

ꢀꢂ

ꢈ

Other attestation services

thereof KPMG AG

Wirtschaftsprüfungsgesellschaft

ꢀ7

2

ꢃ

ꢀ

Tax services

The increased risks resulting from the Russia-Ukraine

War are described in the Risk and Opportunity Report.

Among other things, the default, country and currency

risks described in Note 34 have increased. The

increased country risks mainly relate to potential

impairments of trade receivables, property, plant and

equipment, and inventories. In addition, higher risks

may arise from the insolvency of subsidiaries. These

risks would be exacerbated by the potential expropria-

tion of assets of Russian subsidiaries. Risks from the

Russia-Ukraine War are being continually monitored;

possible scenarios are being continually adapted to the

current geopolitical situation and analysed.

thereof KPMG AG

Wirtschaftsprüfungsgesellschaft

ꢀ

2

-

Other services

ꢄ

thereof KPMG AG

Wirtschaftsprüfungsgesellschaft

ꢀ

ꢄ

6ꢂ

ꢃꢀ

4

1. Events after the reporting period

Contribution of shares in Daimler Truck Holding AG

in pension plan assets

In January 2022, around 5% of the shares in Daimler

Truck Holding AG were contributed into the German

pension plan assets. Until the contribution date, 35% of

the company’s shares were disclosed under invest-

ments accounted for using the equity method.

Sale of retail activities in Canada

In 2021, the Group decided to sell its own retail activi-

ties in Canada. The respective contractual agreements

were signed in December 2021. The transaction became

effective in February 2022 and the Group recognised a

gain of a mid-three-digit euro amount, which is mainly

allocated to the Mercedes-Benz Cars segment. The cash

flow at the Group is expected to be in the low three-

digit million euro range. At 31 December 2021, the

respective assets and liabilities are classified as held for

sale. Due to its minor importance for the financial posi-

tion of the Mercedes-Benz Group, the assets (€123 mil-

lion) and liabilities (€14 million) held for sale are not

presented separately in the Consolidated Statement of

Financial Position. The assets held for sale mainly con-

sist of property, plant and equipment and inventories.

The extraordinary contribution of €1,309 million into

pension plan assets corresponds to the fair value of the

contributed assets at the contribution date. The gain of

€5ꢉ million from the contribution is not cash effective

and is presented under earnings from equity-method

investments, which is a part of the reconciliation.

Russia-Ukraine War

Russia has been at war with Ukraine since end of Febru-

ary 2022 (“Russia-Ukraine War”). The effects of the Rus-

sia-Ukraine War represent a value-affecting event after

the reporting period and therefore have no impact on

the recognition and measurement of assets and liabili-

ties as at the reporting date. On 2 March 2022, the

Mercedes-Benz Group decided to discontinue the

export of cars and vans to Russia as well as local pro-

duction in Russia until further notice. Effects on

314

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

4

ꢄ. Additional information

German Corporate Governance Code

The Board of Management and the Supervisory Board of

Mercedes-Benz Group AG have issued a declaration

pursuant to Section 1ꢉ1 of the German Stock Corpora-

tion Act (AktG) and have made it permanently available

to their shareholders on Mercedes-Benz Group’s web-

site at

w

group.mercedes-benz.com//documents/

company/corporate-governance/declarations/

daimler-entsprechenserklaerung-en-12-2021.pdf.

Information on investments

The statement of investments of the Mercedes-Benz

Group pursuant to Section 313 Subsection 2 Nos. 1-ꢉ of

the German Commercial Code (HGB) is presented in

table



D.101. In general, cooperations without an

equity interest are not reported. Information on equity

and earnings and information on investments pursuant

to Section 313 Subsection 2 No. 4 of the German Com-

mercial Code is omitted insofar as, pursuant to Section

313 Subsection 3 Sentence 4 of the HGB, such informa-

tion is of minor relevance for a fair presentation of the

profitability, liquidity and capital resources or financial

position of the Mercedes-Benz Group. In addition, the

statement of investments indicates which consolidated

companies make use of the exemption pursuant to Sec-

tion 2ꢉ4 Subsection 3 of the HGB and/or Section 2ꢉ4b

of the HGB. The Consolidated Financial Statements of

Mercedes-Benz Group AG release those subsidiaries

from the requirements that would otherwise apply. On

1

February 2022, Daimler AG was renamed as Mercedes-

Benz Group AG. From that date, further name changes

of Group companies will take place. The statement of

investments shows the companies with their company

names as of 31 December 2021.

315

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

D.1ꢅ1

Equity

interest in

Name of the company

Domicile, country/region

percent^ꢀFootnote

I. Consolidated subsidiaries

Accumotive GmbH & Co. KG

Kamenz, Germany

Schiphol, Netherlands

Machelen, Belgium

Schiphol, Netherlands

Rome, Italy

ꢄꢁꢁ.ꢁꢁ

6ꢃ.ꢁꢁ

ꢃ

Athlon Beheer International B.V.

Athlon Car Lease Belgium N.V.

Athlon Car Lease International B.V.

Athlon Car Lease Italy S.R.L.

Athlon Car Lease Nederland B.V.

Athlon Car Lease Polska Sp. z o.o.

Athlon Car Lease Portugal, lda

Schiphol, Netherlands

Warsaw, Poland

Oeiras, Portugal

Athlon Car Lease Rental Services B.V.

Athlon Car Lease Rental Services Belgium N.V.

Athlon Car Lease S.A.S.

Schiphol, Netherlands

Machelen, Belgium

Le Bourget, France

Alcobendas, Spain

Le Bourget, France

Düsseldorf, Germany

Machelen, Belgium

Milton Keynes, United Kingdom

Düsseldorf, Germany

Malmö, Sweden

Athlon Car Lease Spain, S.A.

Athlon France S.A.S.

Athlon Germany GmbH

Athlon Mobility Consultancy N.V.

Athlon Mobility Services UK Limited

Athlon Rental Germany GmbH

Athlon Sweden AB

Athlon Switzerland AG i.L.

Schlieren, Switzerland

Milton Keynes, United Kingdom

Wiedemar, Germany

Centurion, South Africa

Wilmington, USA

ꢆ

ꢃ

Brooklands Estates Management Limited

CARS Technik & Logistik GmbH

CLIDET NO 1048 (Proprietary) Limited

DA Investments Co. LLC

DAF Investments, Ltd.

Wilmington, USA

Daimler AG & Co. Anlagenverwaltung OHG

Daimler Australia/Pacific Pty. Ltd.

Daimler Brand & IP Management GmbH & Co. KG

Daimler Canada Finance Inc.

Schönefeld, Germany

Melbourne, Australia

Stuttgart, Germany

Montreal, Canada

ꢃ, ꢈ

ꢃ

Daimler Capital Services LLC

Wilmington, USA

Daimler Compra y Manufactura Mexico S. de R.L. de C.V.

Daimler Finance North America LLC

Daimler Financial Services Africa & Asia Pacific Ltd.

Daimler Financial Services India Private Limited

Daimler Financial Services Investment Company LLC

Daimler Fleet Management GmbH

Daimler Fleet Management Singapore Pte. Ltd.

Daimler Fleet Management South Africa (Pty.) Ltd. i. L.

Daimler Fleet Services A.S.

Mexico City, Mexico

Wilmington, USA

Singapore, Singapore

Chennai, India

Wilmington, USA

Stuttgart, Germany

Singapore, Singapore

Centurion, South Africa

Istanbul, Turkey

ꢃ

ꢆ

ꢄꢁꢁ.ꢁꢁ

Daimler Greater China Ltd.

Beijing, China

31ꢉ

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Equity

interest in

Name of the company

Domicile, country/region

percent^ꢀFootnote

Daimler Grund Services GmbH

Schönefeld, Germany

Wilmington, USA

ꢄꢁꢁ.ꢁꢁ

6ꢈ.ꢃꢃ

ꢃ

Daimler Insurance Agency LLC

Daimler Insurance Services GmbH

Stuttgart, Germany

Milton Keynes, United Kingdom

Utrecht, Netherlands

Wilmington, USA

Daimler Insurance Services UK Limited

Daimler International Finance B.V.

Daimler International Nederland B.V.

Daimler Investments US LLC

Daimler Ladungsträger GmbH

Böblingen, Germany

Beijing, China

ꢃ

Daimler Mobility & Technology Service Co., Ltd.

Daimler Mobility AG

Stuttgart, Germany

Melbourne, Australia

Leinfelden-Echterdingen, Germany

Stuttgart, Germany

Utrecht, Netherlands

Wilmington, USA

DAIMLER MOBILITY AUSTRALIA PTY LTD

Daimler Mobility Services GmbH

ꢃ

Daimler Mobility Vermögens- und Beteiligungsgesellschaft mbH

Daimler Nederland B.V.

Daimler Nederland Holding B.V.

Daimler North America Corporation

Daimler North America Finance Corporation

Daimler Northeast Asia Parts Trading and Services Co., Ltd.

Daimler Parts Brand GmbH

Newark, USA

Beijing, China

Stuttgart, Germany

Luxembourg, Luxembourg

Berlin, Germany

ꢃ

Daimler Re Insurance S.A. Luxembourg

Daimler Real Estate GmbH

Daimler Retail Receivables LLC

Farmington Hills, USA

Singapore, Singapore

Brussels, Belgium

Daimler South East Asia Pte. Ltd.

Daimler Truck Financial Services Belgium N.V./S.A.

Daimler Truck Financial Services Italia S.p.A

Daimler Truck Financial Services Nederland B.V.

Daimler Trust Holdings LLC

Rome, Italy

Nieuwegein, Netherlands

Farmington Hills, USA

Wilmington, USA

Daimler Trust Leasing Conduit LLC

Daimler Trust Leasing LLC

Farmington Hills, USA

Milton Keynes, United Kingdom

Hong Kong, China

Daimler UK Limited

Daimler Vans Hong Kong Limited

Daimler Vans USA, LLC

Wilmington, USA

ꢄꢁꢁ.ꢁꢁ

ꢁ.ꢁꢁ

Daimler Vermögens- und Beteiligungsgesellschaft mbH

Daimler Verwaltungsgesellschaft für Grundbesitz mbH

Daimler Vorsorge und Versicherungsdienst GmbH

EHG Elektroholding GmbH

Stuttgart, Germany

Schönefeld, Germany

Berlin, Germany

ꢃ

ꢂ

Stuttgart, Germany

Beijing, China

FOTIC - MB Leasing No. 1 Single Fund Trust

FOTIC – MB Leasing No.2 Single Fund Trust

FOTIC - MB LEASING NO.3 SINGLE FUND TRUST

Friesland Lease B.V.

Beijing, China

ꢁ.ꢁꢁ

Beijing, China

ꢁ.ꢁꢁ

Drachten, Netherlands

Schönefeld, Germany

ꢃꢄ.ꢄꢄ

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 1 OHG

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 2 OHG

ꢄꢁꢁ.ꢁꢁ

ꢃ, ꢈ

317

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Equity

interest in

Name of the company

Domicile, country/region

percent^ꢀFootnote

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 3 OHG

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 4 OHG

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 5 OHG

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha ꢉ OHG

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Alpha 7 OHG

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Delta OHG

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Epsilon OHG

Interleasing Luxembourg S.A.

Schönefeld, Germany

Windhof, Luxembourg

Zwartkop, South Africa

Luxembourg, Luxembourg

Stuttgart, Germany

Mississauga, Canada

Kölleda, Germany

Brixworth, United Kingdom

Istanbul, Turkey

ꢄꢁꢁ.ꢁꢁ

ꢁ.ꢁꢁ

ꢃ, ꢈ

Koppieview Property (Pty) Ltd

LBBW AM – Daimler Re Insurance

ꢂ

LBBW AM – MBVEXW

ꢁ.ꢁꢁ

MBarc Credit Canada Inc.

ꢄꢁꢁ.ꢁꢁ

66.ꢇꢄ

ꢄꢁꢁ.ꢁꢁ

ꢈꢃ.ꢁꢁ

ꢄꢁꢁ.ꢁꢁ

ꢁ.ꢁꢁ

MDC Power GmbH

ꢃ

Mercedes AMG High Performance Powertrains Ltd

Mercedes Benz Kamyon Finansman A.S.

Mercedes Benz Otomotiv Ticaret ve Hizmetler A.S.

Mercedes pay GmbH

Istanbul, Turkey

Stuttgart, Germany

Affalterbach, Germany

Mem Martins, Portugal

Beijing, China

ꢃ

Mercedes-AMG GmbH

Mercedes-Benz - Aluguer de Veículos, Lda.

Mercedes-Benz (China) Ltd.

Mercedes-Benz (Thailand) Limited

Bangkok, Thailand

Stuttgart, Germany

Antwerp, Belgium

Buenos Aires, Argentina

Stuttgart, Germany

Utrecht, Netherlands

Melbourne, Australia

Beijing, China

Mercedes-Benz AG

ꢃ

Mercedes-Benz Antwerpen N.V.

Mercedes-Benz Argentina S.A.U.

Mercedes-Benz Asia GmbH

Mercedes-Benz Assuradeuren B.V.

Mercedes-Benz Australia/Pacific Pty Ltd

Mercedes-Benz Auto Finance Ltd.

Mercedes-Benz Auto Lease Trust 2019-B

Mercedes-Benz Auto Lease Trust 2020-1

Mercedes-Benz Auto Lease Trust 2020-A

Mercedes-Benz Auto Lease Trust 2020-B

Mercedes-Benz Auto Lease Trust 2021-A

Mercedes-Benz Auto Lease Trust 2021-B

Mercedes-Benz Auto Receivables Trust 2018-1

Mercedes-Benz Auto Receivables Trust 2019-1

Mercedes-Benz Auto Receivables Trust 2020-1

Mercedes-Benz Auto Receivables Trust 2020-A

Mercedes-Benz Auto Receivables Trust 2021-1

Mercedes-Benz Automotive Mobility GmbH

Mercedes-Benz Bank AG

Wilmington, USA

ꢂ

ꢃ

Wilmington, USA

ꢁ.ꢁꢁ

Wilmington, USA

ꢁ.ꢁꢁ

Wilmington, USA

ꢁ.ꢁꢁ

Wilmington, USA

ꢁ.ꢁꢁ

Wilmington, USA

ꢁ.ꢁꢁ

Wilmington, USA

ꢁ.ꢁꢁ

Wilmington, USA

ꢁ.ꢁꢁ

Wilmington, USA

ꢁ.ꢁꢁ

Wilmington, USA

ꢁ.ꢁꢁ

Wilmington, USA

ꢁ.ꢁꢁ

Berlin, Germany

ꢄꢁꢁ.ꢁꢁ

Stuttgart, Germany

Eugendorf, Austria

Mercedes-Benz Bank GmbH

318

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Equity

interest in

Name of the company

Domicile, country/region

percent^ꢀFootnote

Mercedes-Benz Bank Polska S.A.

Warsaw, Poland

ꢄꢁꢁ.ꢁꢁ

Mercedes-Benz Bank Rus OOO

Moscow, Russian Federation

Berlin, Germany

Mercedes-Benz Bank Service Center GmbH

Mercedes-Benz Banking Service GmbH

Mercedes-Benz Belgium Luxembourg S.A.

Mercedes-Benz Bordeaux S.A.S.

ꢄꢁꢁ.ꢁꢁ

ꢇꢇ.ꢁꢁ

ꢃ

Saarbrücken, Germany

Brussels, Belgium

Begles, France

Mercedes-Benz Broker Argentina S.A.

Buenos Aires, Argentina

Budapest, Hungary

Mercedes-Benz Broker Biztositási Alkusz Hungary Kft.

Mercedes-Benz Brooklands Limited

ꢄꢁꢁ.ꢁꢁ

ꢇꢃ.ꢄꢄ

Milton Keynes, United Kingdom

Mississauga, Canada

Moscow, Russian Federation

São Bernardo do Campo, Brazil

Milton Keynes, United Kingdom

Prague, Czech Republic

Buenos Aires, Argentina

Stuttgart, Germany

Mercedes-Benz Canada Inc.

Mercedes-Benz Capital Rus OOO

Mercedes-Benz Cars & Vans Brasil - Indústria e Comércio De Veículos Ltda.

Mercedes-Benz Cars UK Limited

Mercedes-Benz Česká republika s.r.o.

Mercedes-Benz Compañía Financiera Argentina S.A.

Mercedes-Benz Connectivity Services GmbH

Mercedes-Benz CPH A/S

ꢃ

Horsholm, Denmark

Budapest, Hungary

Mercedes-Benz Credit Pénzügyi Szolgáltató Hungary Zrt.

Mercedes-Benz Customer Solutions GmbH

Mercedes-Benz Danmark A/S

Stuttgart, Germany

Copenhagen, Denmark

The Hague, Netherlands

Drogenbos, Belgium

Alcobendas, Spain

Mercedes-Benz Dealer Bedrijven B.V.

Mercedes-Benz Drogenbos N.V.

Mercedes-Benz Espana, S.A.U.

Mercedes-Benz Europa NV/SA

Woluwe-Saint-Lambert, Belgium

Wilmington, USA

Mercedes-Benz ExTra LLC

Mercedes-Benz Finance Co., Ltd.

Tokyo, Japan

Mercedes-Benz Financial Services Australia Pty. Ltd.

Mercedes-Benz Financial Services Austria GmbH

Mercedes-Benz Financial Services BeLux NV

Mercedes-Benz Financial Services Canada Corporation

Mercedes-Benz Financial Services Ceská republika s.r.o.

Mercedes-Benz Financial Services España, E.F.C., S.A.

Mercedes-Benz Financial Services France S.A.

Mercedes-Benz Financial Services Hong Kong Ltd.

Mercedes-Benz Financial Services Italia S.p.A.

Mercedes-Benz Financial Services Korea Ltd.

Mercedes-Benz Financial Services Nederland B.V.

Mercedes-Benz Financial Services New Zealand Ltd

Melbourne, Australia

Eugendorf, Austria

ꢄꢁꢁ.ꢁꢁ

ꢅꢁ.ꢁꢁ

Brussels, Belgium

Mississauga, Canada

Prague, Czech Republic

Alcobendas, Spain

Montigny-le-Bretonneux, France

Hong Kong, China

Rome, Italy

ꢄꢁꢁ.ꢁꢁ

ꢅꢁ.ꢁꢁ

Seoul, South Korea

Nieuwegein, Netherlands

Auckland, New Zealand

ꢄꢁꢁ.ꢁꢁ

ꢈꢃ.ꢁꢁ

Mercedes-Benz Financial Services Portugal - Sociedade Financeira de Crédito S.A. Mem Martins, Portugal

Mercedes-Benz Financial Services Rus OOO

Mercedes-Benz Financial Services Schweiz AG

Mercedes-Benz Financial Services Slovakia s.r.o.

Moscow, Russian Federation

Schlieren, Switzerland

Bratislava, Slovakia

319

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Equity

interest in

Name of the company

Domicile, country/region

percent^ꢀFootnote

Mercedes-Benz Financial Services South Africa (Pty) Ltd

Mercedes-Benz Financial Services Sp. zo.o.

Mercedes-Benz Financial Services Taiwan Ltd.

Mercedes-Benz Financial Services UK Limited

Mercedes-Benz Financial Services USA LLC

Mercedes-Benz Finans Danmark A/S

Mercedes-Benz Finans Sverige AB

Centurion, South Africa

Warsaw, Poland

ꢄꢁꢁ.ꢁꢁ

ꢃꢄ.ꢁꢁ

Taipei, Taiwan, China

Milton Keynes, United Kingdom

Wilmington, USA

Copenhagen, Denmark

Malmö, Sweden

ꢄꢁꢁ.ꢁꢁ

ꢈꢁ.ꢁꢁ

Mercedes-Benz Finansal Kiralama Türk A.S.

Mercedes-Benz Finansman Türk A.S.

Mercedes-Benz Formula E Limited

Istanbul, Turkey

Brackley, United Kingdom

Malmö, Sweden

Mercedes-Benz Försäljnings AB

Mercedes-Benz France S.A.S.

Montigny-le-Bretonneux, France

Brackley, United Kingdom

Kifissia, Greece

Mercedes-Benz Grand Prix Ltd.

Mercedes-Benz Hellas Single-Member S.A.

Mercedes-Benz Hong Kong Limited

Mercedes-Benz India Private Limited

Mercedes-Benz Insurance Agency (Beijing) Co., Ltd.

Mercedes-Benz Insurance Broker S.R.L.

Mercedes-Benz Insurance Services Nederland B.V.

Mercedes-Benz Insurance Services Taiwan Ltd.

Mercedes-Benz Investment Company LLC

Mercedes-Benz Italia S.p.A.

ꢄꢁꢁ.ꢁꢁ

ꢃꢄ.ꢁꢁ

Hong Kong, China

Pune, India

Beijing, China

Voluntari, Romania

Utrecht, Netherlands

Taipei, Taiwan, China

Wilmington, USA

Rome, Italy

Mercedes-Benz Japan Co., Ltd.

Tokyo, Japan

Mercedes-Benz Korea Limited

Seoul, South Korea

Trento, Italy

Mercedes-Benz Lease Italia S.r.l.

ꢄꢁꢁ.ꢁꢁ

6ꢃ.ꢁꢁ

Mercedes-Benz Leasing (Thailand) Co., Ltd.

Mercedes-Benz Leasing Co., Ltd.

Bangkok, Thailand

Beijing, China

Mercedes-Benz Leasing Deutschland GmbH

Mercedes-Benz Leasing GmbH

Stuttgart, Germany

Zagreb, Croatia

ꢄꢁꢁ.ꢁꢁ

ꢁ.ꢁꢁ

ꢃ

Mercedes-Benz Leasing Hrvatska d.o.o.

Mercedes-Benz Leasing IFN S.A.

Bucharest, Romania

Budapest, Hungary

Warsaw, Poland

Mercedes-Benz Leasing Kft.

Mercedes-Benz Leasing Polska Sp. z o.o.

Mercedes-Benz Leasing Treuhand GmbH

Mercedes-Benz Ludwigsfelde GmbH

Mercedes-Benz Malaysia Sdn. Bhd.

Mercedes-Benz Manhattan, Inc.

Stuttgart, Germany

Ludwigsfelde, Germany

Puchong, Malaysia

Wilmington, USA

Bangkok, Thailand

Kecskemét, Hungary

Jawor, Poland

ꢃ

Mercedes-Benz Manufacturing (Thailand) Limited

Mercedes-Benz Manufacturing Hungary Kft.

Mercedes-Benz Manufacturing Poland sp. z o. o.

Mercedes-Benz Master Owner Trust

Mercedes-Benz Mechelen N.V.

Wilmington, USA

Mechelen, Belgium

ꢂ

ꢄꢁꢁ.ꢁꢁ

320

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Equity

interest in

Name of the company

Domicile, country/region

percent^ꢀFootnote

Mercedes-Benz Mexico, S. de R.L. de C.V.

Mercedes-Benz Mitarbeiter-Fahrzeuge Leasing GmbH

Mercedes-Benz Mobility Korea Ltd.

Mercedes-Benz Nederland B.V.

Mexico City, Mexico

Stuttgart, Germany

Seoul, South Korea

Utrecht, Netherlands

Auckland, New Zealand

Eugendorf, Austria

ꢄꢁꢁ.ꢁꢁ

ꢃꢄ.ꢁꢁ

ꢃ

Mercedes-Benz New Zealand Ltd

Mercedes-Benz Österreich GmbH

Mercedes-Benz Paris SAS

Port-Marly, France

Mercedes-Benz Parts Logistics Ibérica, S.L.U.

Mercedes-Benz Parts Logistics UK Limited

Mercedes-Benz Parts Manufacturing & Services Ltd.

Mercedes-Benz Polska Sp. z.o.o

Azuqueca de Henares, Spain

Milton Keynes, United Kingdom

Shanghai, China

Warsaw, Poland

Mercedes-Benz Portugal, S.A.

Sintra, Portugal

Mercedes-Benz PRAHA s.r.o.

Prague, Czech Republic

Alcobendas, Spain

Wilmington, USA

Mercedes-Benz Renting, S.A.

Mercedes-Benz Research & Development North America, Inc.

Mercedes-Benz Retail Belgium NV/SA

Mercedes-Benz Retail Group UK Limited

Mercedes-Benz Retail, S.A.

Woluwe-Saint-Lambert, Belgium

Milton Keynes, United Kingdom

Madrid, Spain

Mercedes-Benz Retail, Unipessoal Lda.

Mercedes-Benz Risk Solutions South Africa (Pty.) Ltd.

Mercedes-Benz Roma S.p.A.

Mem Martins, Portugal

Centurion, South Africa

Rome, Italy

Mercedes-Benz Romania S.R.L.

Bucharest, Romania

Moscow, Russian Federation

Schlieren, Switzerland

Bucharest, Romania

Alcobendas, Spain

Selangor, Malaysia

Mercedes-Benz Russia AO

Mercedes-Benz Schweiz AG

Mercedes-Benz Service Leasing S.R.L.

Mercedes-Benz Services Correduria de Seguros, S.A.

Mercedes-Benz Services Malaysia Sdn Bhd

Mercedes-Benz Servicios S.A.U

Buenos Aires, Argentina

Istanbul, Turkey

Mercedes-Benz Sigorta Aracilik Hizmetleri A.S.

Mercedes-Benz Sosnowiec Sp. z o.o.

Mercedes-Benz South Africa Ltd

Sosnowiec, Poland

Pretoria, South Africa

Malmö, Sweden

Mercedes-Benz Sverige AB

Mercedes-Benz Taiwan Ltd.

Taipei, Taiwan, China

Vance, USA

Mercedes-Benz U.S. International, Inc.

Mercedes-Benz Ubezpieczenia Sp. z o.o.

Mercedes-Benz USA, LLC

ꢄꢁꢁ.ꢁꢁ

ꢈꢁ.ꢁꢁ

Warsaw, Poland

Wilmington, USA

Mercedes-Benz Vans UK Limited

Milton Keynes, United Kingdom

Wilmington, USA

Mercedes-Benz Vans, LLC

Mercedes-Benz Vermögens- und Beteiligungsgesellschaft mbH

Mercedes-Benz Versicherung AG

Stuttgart, Germany

Ho Chi Minh City, Vietnam

Warsaw, Poland

ꢃ

Mercedes-Benz Vietnam Ltd.

Mercedes-Benz Warszawa Sp. z o.o.

ꢄꢁꢁ.ꢁꢁ

321

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Equity

interest in

Name of the company

Domicile, country/region

percent^ꢀFootnote

Mercedes-Benz Waterloo S.A.

Braine-L'Alleud, Belgium

Wavre, Belgium

ꢄꢁꢁ.ꢁꢁ

Mercedes-Benz Wavre S.A.

Mercedes-Benz Wemmel N.V.

Wemmel, Belgium

Wilmington, USA

Le Bourget, France

Bogor, Indonesia

Jakarta, Indonesia

Bryanston, South Africa

Utrecht, Netherlands

Melbourne, Australia

Mississauga, Canada

Beijing, China

Mercedes-Benz Wholesale Receivables LLC

Multifleet G.I.E

ꢃꢁ.ꢄꢁ

ꢄꢁꢁ.ꢁꢁ

ꢁ.ꢁꢁ

ꢈ

P.T. Mercedes-Benz Indonesia

PT Mercedes-Benz Distribution Indonesia

Sandown Motor Holdings (Pty) Ltd

Silver Arrow Athlon NL 2021-1

ꢂ

Silver Arrow Australia 2019-1

ꢁ.ꢁꢁ

Silver Arrow Australia Trust 2019-1

Silver Arrow Australia Trust 2020-1

Silver Arrow Canada GP Inc.

ꢁ.ꢁꢁ

ꢄꢁꢁ.ꢁꢁ

ꢁ.ꢁꢁ

Silver Arrow Canada LP

ꢈ

ꢂ

SILVER ARROW CHINA 2020-2 RETAIL AUTO LOAN ASSET BACKED NOTES TRUST

SILVER ARROW CHINA 2021-1 RETAIL AUTO LOAN ASSET BACKED NOTES TRUST

SILVER ARROW CHINA 2021-2 RETAIL AUTO LOAN ASSET BACKED NOTES TRUST

SILVER ARROW CHINA MBLC 2021-2 ASSET BACKED NOTES TRUST

Silver Arrow China Mercedes-Benz Leasing Co., Ltd.2020-1

Silver Arrow China Mercedes-Benz Leasing Co., Ltd.2021-1

Silver Arrow France 2020-1

Beijing, China

ꢁ.ꢁꢁ

Beijing, China

ꢁ.ꢁꢁ

Beijing, China

ꢁ.ꢁꢁ

Beijing, China

ꢁ.ꢁꢁ

Beijing, China

ꢁ.ꢁꢁ

Saint-Denis, France

Tokyo, Japan

ꢁ.ꢁꢁ

Silver Arrow Japan 2021-1

ꢁ.ꢁꢁ

Silver Arrow Korea 2020-1

Seoul, South Korea

Wilmington, USA

Milan, Italy

ꢁ.ꢁꢁ

Silver Arrow Lease Facility Trust

ꢁ.ꢁꢁ

Silver Arrow Merfina 2019-1 S.r.l.

ꢁ.ꢁꢁ

Silver Arrow Merfina 2021-1 S.r.l.

Milan, Italy

ꢁ.ꢁꢁ

Silver Arrow S.A.

Luxembourg, Luxembourg

Sebes, Romania

ꢁ.ꢁꢁ

Star Assembly SRL

ꢄꢁꢁ.ꢁꢁ

6ꢃ.ꢁꢁ

ꢄꢁꢁ.ꢁꢁ

ꢃꢄ.ꢁꢁ

Ucafleet S.A.S

Le Bourget, France

Stuttgart, Germany

Kidlington, United Kingdom

Sittard, Netherlands

Vierzehnte Vermögensverwaltungsgesellschaft DVB mbH

YASA Limited

ꢃ

Zuidlease B.V.

II. Unconsolidated subsidiaries^ꢄ

Accumotive Verwaltungs-GmbH

Kamenz, Germany

ꢄꢁꢁ.ꢁꢁ

6ꢅ.ꢅꢆ

AEG Olympia Office GmbH

Stuttgart, Germany

Berlin, Germany

Anota Fahrzeug Service- und Vertriebsgesellschaft mbH

Circulo Cerrado S.A. de Ahorro para Fines Determinados

Cúspide GmbH

Buenos Aires, Argentina

Stuttgart, Germany

Milton Keynes, United Kingdom

Stuttgart, Germany

ꢄꢁꢁ.ꢁꢁ

Daimler Brand & IP Management Verwaltung GmbH

Daimler Financial Services UK Trustees Ltd.

Daimler Gastronomie GmbH

322

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Equity

interest in

Name of the company

Domicile, country/region

percent^ꢀFootnote

Daimler Group Services Berlin GmbH

Daimler Group Services Madrid, S.A.U.

Daimler International Assignment Services USA, LLC

Daimler Pensionsfonds AG

Berlin, Germany

ꢄꢁꢁ.ꢁꢁ

San Sebastián de los Reyes, Spain

Wilmington, USA

Stuttgart, Germany

Leinfelden-Echterdingen, Germany

Wilmington, USA

ꢄꢁꢁ.ꢁꢁ

ꢅꢁ.ꢁꢁ

6

Daimler Protics GmbH

Daimler Purchasing Coordination Corp.

Daimler Trucks Retail Italia S.r.l.

Rome, Italy

Daimler TSS GmbH

Ulm, Germany

Daimler UK Share Trustee Ltd.

Milton Keynes, United Kingdom

Stuttgart, Germany

Arvidsjaur, Sweden

Stuttgart, Germany

Kuppenheim, Germany

Kamenz, Germany

Daimler UK Trustees Limited

Daimler Unterstützungskasse GmbH

Dreizehnte Vermögensverwaltungsgesellschaft DVB mbH

Lapland Car Test Aktiebolag

LEONIE DMS DVB GmbH

LICULAR GmbH

Li-Tec Battery GmbH

MB GTC GmbH Mercedes-Benz Gebrauchtteile Center

MBition GmbH

Neuhausen auf den Fildern, Germany

Berlin, Germany

MBition Sofia EOOD

Sofia, Bulgaria

Mercedes pay AG

Zug, Switzerland

Mercedes pay S.A. – in liquidation

Mercedes pay USA LLC

Luxembourg, Luxembourg

Wilmington, USA

ꢆ

Mercedes-Benz Cars Middle East FZE

Mercedes-Benz Consulting GmbH

Mercedes-Benz Customer Assistance Center Maastricht N.V.

Mercedes-Benz Egypt S.A.E.

Dubai, United Arab Emirates

Leinfelden-Echterdingen, Germany

Maastricht, Netherlands

New Cairo, Egypt

Mercedes-Benz Energy GmbH

Kamenz, Germany

MERCEDES-BENZ FINANCIAL SERVICES MEXICO S. de R.L. de C.V

Mercedes-Benz G GmbH

Mexico City, Mexico

Raaba, Austria

Mercedes-Benz Group Services Phils., Inc.

Mercedes-Benz Hungária Kft.

Cebu City, Philippines

Budapest, Hungary

Valbonne, France

Mercedes-Benz IDC Europe S.A.S.

Mercedes-Benz Logistics and Distribution Egypt LLC

Mercedes-Benz Manufacturing and Import Egypt

Mercedes-Benz Manufacturing Rus Ltd

Mercedes-Benz Motorsport Limited

Mercedes-Benz Museum GmbH

New Cairo, Egypt

Moscow, Russian Federation

Brackley, United Kingdom

Stuttgart, Germany

Puchong, Malaysia

ꢄꢁꢁ.ꢁꢁ

Mercedes-Benz OD GmbH

Mercedes-Benz Parts Logistics Asia Pacific Sdn. Bhd.

Mercedes-Benz Research & Development Tel Aviv Ltd.

Mercedes-Benz Research and Development India Private Limited

Mercedes-Benz Slovakia s.r.o.

Tel Aviv, Israel

Bangalore, India

Bratislava, Slovakia

323

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Equity

interest in

Name of the company

Domicile, country/region

percent^ꢀFootnote

Mercedes-Benz Subscription Services USA LLC

Mercedes-Benz Vans Mobility, S.L.U.

Mercedes-Benz Venezuela S.A.

Wilmington, USA

ꢄꢁꢁ.ꢁꢁ

ꢃꢄ.ꢁꢁ

Alcobendas, Spain

Valencia, Venezuela

Stuttgart, Germany

Lisbon, Portugal

Mercedes-Benz.io GmbH

Mercedes-Benz.io Portugal Unipessoal Lda.

Montajes y Estampaciones Metálicas, S.L.

NAG Nationale Automobil-Gesellschaft Aktiengesellschaft

Porcher & Meffert Grundstücksgesellschaft mbH & Co. Stuttgart OHG

Power Supply Systems GmbH

Esparraguera, Spain

Stuttgart, Germany

Schönefeld, Germany

Stuttgart, Germany

Banbury, United Kingdom

Stuttgart, Germany

Singapore, Singapore

Cugir, Romania

ꢄꢁꢁ.ꢁꢁ

ꢅꢅ.ꢅꢇ

ꢈ

R.T.C. Management Company Limited

Sechste Vermögensverwaltungsgesellschaft Zeus mbH

SMART MOBILITY PTE. LTD.

ꢄꢁꢁ.ꢁꢁ

Star Transmission srl

STARKOM, proizvodnja in trgovina d.o.o.

Vierte Vermögensverwaltung PV GmbH

YASA Automotive Limited

Maribor, Slovenia

Stuttgart, Germany

Kidlington, United Kingdom

Stuttgart, Germany

YASA Marine Limited

YASA Motors Limited

Zweite Vermögensverwaltung PV GmbH

Zweite Vermögensverwaltungsgesellschaft Zeus mbH

III. Joint operations accounted for using proportionate consolidation

Cooperation Manufacturing Plant Aguascalientes, S.A.P.I de C.V.

Aguascalientes, Mexico

ꢃꢆ.ꢁꢄ

IV. Joint ventures accounted for using the equity method

Enbase Power GmbH

Munich, Germany

Fuzhou, China

ꢀꢃ.ꢄꢁ

ꢃꢁ.ꢁꢁ

ꢀꢁ.ꢁꢁ

ꢂꢂ.ꢆꢁ

ꢃꢁ.ꢁꢁ

Fujian Benz Automotive Co., Ltd.

IONITY Holding GmbH & Co. KG

MB Service Japan Co., Ltd.

Munich, Germany

Hitachi, Japan

Movinx GmbH

Berlin, Germany

Shenzhen, China

Ningbo, China

Shenzhen DENZA New Energy Automotive Co. Ltd.

smart Automobile Co., Ltd.

Wei Xing Tech. Co., Ltd.

Hangzhou, China

Munich, Germany

YOUR NOW Holding GmbH

V. Associated companies accounted for using the equity method

BAIC Motor Corporation Ltd.

Beijing, China

ꢇ.ꢃꢃ

ꢆꢇ.ꢁꢁ

ꢀꢇ.ꢄꢈ

ꢈ.ꢆꢃ

Beijing Benz Automotive Co., Ltd.

Blacklane GmbH

Beijing, China

Berlin, Germany

Bolt Technology OÜ

Tallinn, Estonia

Daimler Truck Holding AG

Leinfelden-Echterdingen, Germany

Hong Kong, China

ꢂꢃ.ꢁꢁ

ꢄꢃ.ꢁꢁ

LSH Auto International Limited

324

Annual Report 2021 · Mercedes-Benz Group

Consolidated Financial Statements

Equity

interest in

Name of the company

Domicile, country/region

percent^ꢀFootnote

Mobility Trader Holding GmbH

RS Holdings Inc.

Berlin, Germany

ꢇ.ꢄꢅ

6ꢃ.ꢂꢀ

ꢀꢇ.ꢈꢆ

2.ꢉ0

Wilmington, USA

Rijswijk, Netherlands

Berlin, Germany

There Holding B.V.

Verimi GmbH

Wagenplan B.V.

Almere, Netherlands

ꢃꢁ.ꢁꢁ

VI. Joint operations, joint ventures, associated companies and substantial other investments accounted for at (amortized) cost^ꢄ

AFCC Automotive Fuel Cell Cooperation Corp.

Aston Martin Lagonda Global Holdings Plc

BDF IP Holdings Ltd.

Burnaby, Canada

ꢃꢁ.ꢄꢁ

ꢄꢄ.6ꢇ

ꢂꢂ.ꢁꢁ

ꢃꢄ.ꢁꢁ

ꢃ.ꢁꢅ

ꢆ

Gaydon, United Kingdom

Burnaby, Canada

Beijing Mercedes-Benz Sales Service Co., Ltd.

carwow Ltd.

Beijing, China

London, United Kingdom

Munich, Germany

Earlybird DWES Fund VI GmbH & Co. KG

Esslinger Wohnungsbau GmbH

6.ꢆꢃ

Esslingen am Neckar, Germany

Berlin, Germany

ꢀ6.ꢃꢈ

ꢀꢃ.ꢁꢁ

ꢇ.ꢃ6

European Center for Information and Communication Technologies - EICT GmbH

Factorial Inc.

Woodbury, USA

Grundstücksgesellschaft Schlossplatz 1 mbH & Co. KG

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Gamma 1 OHG

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Gamma 2 OHG

Grundstücksverwaltungsgesellschaft EvoBus GmbH & Co. OHG

hap2U SAS

Berlin, Germany

ꢄꢅ.ꢂꢈ

ꢄꢁ.ꢄꢁ

ꢂꢆ.ꢃꢇ

ꢄꢃ.ꢁꢁ

ꢀꢁ.ꢁꢁ

ꢅ.ꢇ6

ꢈ

Schönefeld, Germany

Pontcharra, France

Naberezhnye Chelny, Russian Federation

Ingolstadt, Germany

Dover, USA

KAMAZ PAO

PDB - Partnership for Dummy Technology and Biomechanics GbR

Sila Nanotechnologies Inc.

ꢈ

SK Gaming Beteiligungs GmbH

Cologne, Germany

ꢂꢂ.ꢂꢂ

ꢃꢁ.ꢁꢁ

ꢃꢄ.ꢁꢁ

ꢄꢄ.ꢁꢈ

ꢄꢄ.ꢈꢃ

6.ꢆꢅ

smart-BRABUS GmbH

Bottrop, Germany

STARCAM s.r.o.

Most, Czech Republic

Zurich, Switzerland

Stuttgart, Germany

Bruchsal, Germany

London, United Kingdom

The Mobility House AG

VfB Stuttgart 1893 AG

Volocopter GmbH

what3words Ltd.

ꢅ.ꢀꢃ

ꢂ

ꢀ

ꢅ

ꢁ

Shareholding pursuant to Sectionꢃꢂꢄ of the German Stock Corporation Act (AktG)

For the accounting of unconsolidated subsidiaries, joint operations, joint ventures and associated companies, we refer to Noteꢂ.

Control due to economic circumstances

In liquidation

ꢆ

ꢄ

ꢇ

Qualification for exemption pursuant to Section ꢀꢄꢁ Subsection ꢅ and Section ꢀꢄꢁ b of the German Commercial Code (HGB)

Control over the investment of the assets. No consolidation of the assets due to the contractual situation.

Mercedes-Benz Group AG or one or several consolidated subsidiaries is/are the partner(s) with unlimited liability.

Furthermore, Mercedes-Benz Group AG or one or several consolidated subsidiaries is/are the partner(s) with unlimited liability in:

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Gamma ꢅ OHG, Schönefeld (Germany)

Grundstücksverwaltungsgesellschaft Daimler AG & Co. Gamma ꢁ OHG, Schönefeld (Germany)

325

Annual Report 2021 · Mercedes-Benz Group

Bildmotiv

Auswahl tbd.

32ꢉ

Annual Report 2021 · Mercedes-Benz Group

FURTHER

INFORMATION

327

Annual Report 2021 · Mercedes-Benz Group

FURTHER INFORMATION

ꢂ29 Responsibility Statement of the Legal Representatives

ꢂꢂ0 Independent Auditor’s Report

ꢂꢁ5 Key Figures Mercedes-Benz Group

ꢂꢁ6 Key Figures for the Divisions

ꢂꢁ7 Information on the Internet

Annual Report 2021 · Mercedes-Benz Group

Further Information

Responsibility Statement

of the Legal Representatives

To the best of our knowledge, and in accordance with

the applicable reporting principles, the consolidated

financial statements give a true and fair view of the

assets, liabilities, financial position, cash flows and

profit or loss of the Group, and the Group management

report, which has been combined with the management

report for the Mercedes-Benz Group AG, includes a fair

review of the development and performance of the

business and the position of the Group, together with a

description of the principal opportunities and risks

associated with the expected development of the

Group.

Stuttgart, 10 March 2022

Ola Källenius

Dr Jörg Burzer

Sabine Kohleisen

Britta Seeger

Renata Jungo Brüngger

Markus Schäfer

Hubertus Troska

Harald Wilhelm

329

Annual Report 2021 · Mercedes-Benz Group

Further Information

Independent Auditor’s Report

To Mercedes-Benz Group AG (until February 1, ꢄꢅꢄꢄ

Daimler AG), Stuttgart

In our opinion, on the basis of the knowledge obtained

in the audit

–

the accompanying consolidated financial statements

comply, in all material respects, with the IFRSs as

adopted by the EU, and the additional requirements of

German commercial law pursuant to Section 315e par-

agraph 1 HGB and, in compliance with these require-

ments, give a true and fair view of the assets, liabili-

ties and financial position of the Group as of

December 31, 2021, and of its financial performance

for the financial year from January 1 to December 31,

2021 and

Report on the Audit of the Consolidated Financial

Statements and of the Combined Management

Report

Opinions

We have audited the consolidated financial statements

of Mercedes-Benz Group AG, Stuttgart, and its subsidi-

aries (the Group), which comprise the consolidated

statement of financial position as of December 31, 2021,

and the consolidated statement of income, consoli-

dated statement of comprehensive income/loss, con-

solidated statement of changes in equity and consoli-

dated statement of cash flows for the financial year

from January 1 to December 31, 2021, as well as notes to

the consolidated financial statements, including a sum-

mary of significant accounting policies. In addition, we

have audited the group management report, which is

combined with the management report of Mercedes-

Benz Group AG (combined management report), includ-

ing the combined non-financial declaration pursuant to

Sections 289b paragraph 1, 289c, 315b paragraph 1 and

– the accompanying combined management report as a

whole provides an appropriate view of the Group’s

position. In all material respects, the combined man-

agement report is consistent with the consolidated

financial statements, complies with German legal

requirements and appropriately presents the opportu-

nities and risks of future development. Our opinion on

the combined management report does not cover the

elements of the combined management report

referred to in the “Other information” section of our

auditor’s report. The combined management report

includes cross-references not foreseen by law that are

marked as unaudited. Our opinion does not cover

these cross-references and the information to which

these cross-references relate.

3

15c HGB (Handelsgesetzbuch: German Commercial

Code) for the financial year from January 1 to December

1, 2021. In accordance with the German legal regula-

3

tions, we have not audited the content of the elements

of the combined management report referred to in the

“

Other information” section of our auditor’s report.

Pursuant to Section 322 paragraph 3 sentence 1 HGB,

we declare that our audit has not led to any reserva-

tions relating to the legal compliance of the consoli-

The combined management report includes cross-refer-

ences not foreseen by law that are marked as unaudited. dated financial statements and of the combined man-

In accordance with the German legal regulations, we

have not audited the content of these cross-references

and the information to which these cross-references

relate.

agement report.

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Annual Report 2021 · Mercedes-Benz Group

Further Information

Bases for the opinions

conformity of the interpretation with the law is subject

to uncertainty. Our opinion on the combined manage-

ment report has not been modified in this regard.

We conducted our audit of the consolidated financial

statements and of the combined management report in

accordance with Section 317 HGB and the EU Audit Reg-

ulation (No. 537/2014; referred to subsequently as the

Key Audit Matters in the Audit of the Consolidated

Financial Statements

“

EU Audit Regulation”) and in compliance with German

Generally Accepted Standards for Financial Statement

Key audit matters are those matters that, in our profes-

Audits promulgated by the Institut der Wirtschaftsprüfer sional judgment, were of most significance in our audit

(

Institute of Public Auditors in Germany) (IDW). We per-

of the consolidated financial statements for the finan-

cial year from January 1 to December 31, 2021. These

matters were addressed in the context of our audit of

the consolidated financial statements as a whole, and,

in forming our opinion thereon, we do not provide a

separate opinion on these matters.

formed the audit of the consolidated financial state-

ments in supplementary compliance with the Interna-

tional Standards on Auditing (ISAs). Our responsibilities

under those requirements, principles and standards are

further described in the “Auditor’s Responsibilities for

the Audit of the Consolidated Financial Statements and

of the Combined Management Report” section of our

auditor’s report. We are independent of the group enti-

ties in accordance with the requirements of European

law and German commercial and professional law, and

we have fulfilled our other German professional respon-

sibilities in accordance with these requirements. In

addition, in accordance with Article 10 paragraph 2 let-

ter f) of the EU Audit Regulation, we declare that we

have not provided non-audit services prohibited under

Article 5 paragraph 1 of the EU Audit Regulation. We

believe that the evidence we have obtained is sufficient

and appropriate to provide a basis for our opinions on

the consolidated financial statements and on the com-

bined management report.

Reflection in the financial statements of the spin-off

and hive-down of the Daimler commercial vehicle

business

We refer with regard to the description of the facts to

the notes to the consolidated financial statements in

the section entitled “Spin-off and hive-down of the

Daimler commercial vehicle business”. We refer with

regard to the accounting and measurement methods

applied to the notes to the consolidated financial state-

ments in Note 1 “Significant accounting policies” and in

Note 2 “Accounting estimates and management judg-

ments”. Further disclosures on the reflection in the

financial statements of the deconsolidation of the

Daimler commercial vehicle business and the presenta-

Note on the emphasis of a particular matter

We refer to the comments of the legal representatives in tion of the Daimler Trucks & Buses business area seg-

the section on “EU Taxonomy” in the section entitled

ment as a discontinued operation can be found in the

notes to the consolidated financial statements, in par-

ticular in Note 3 “Spin-off and hive-down of the Daimler

“

non-financial statement” that is included in the com-

bined management report in accordance with Sections

289b paragraph 1, 289c, 315b paragraph 1 and 315c HGB. commercial vehicle business”.

There it is stated that the EU Taxonomy Regulation and

the delegated acts promulgated for this includes word-

ing and terms that are subject to considerable uncer-

tainty with regard to their interpretation and for which

clarifications have not yet been published in all cases.

The legal representatives describe how they have car-

ried out the necessary interpretation of the EU Taxon-

omy Regulation and the delegated acts promulgated for

this. On account of the immanent risk that certain

abstract legal terms are subject to interpretation, the

The Risk for the Consolidated Financial Statements

On August ꢉ, 2021, Mercedes-Benz Group AG, as the

transferor legal entity, concluded a spin-off and hive-

down agreement (Spin-off Agreement) with Daimler

Truck Holding AG as the transferee legal entity. In this

agreement, various transactions under corporate trans-

formation law carried out during the financial year and

other transactions in connection with the former

Daimler Trucks & Buses segment including the related

financial services business (hereinafter: Daimler

331

Annual Report 2021 · Mercedes-Benz Group

Further Information

commercial vehicles business) were agreed between

the parties.

consolidated financial statements are not sufficiently

detailed and incorrect. In addition, there is a risk that

the measurement of the initial recording of the at-equity

participation in the consolidated financial statements is

inappropriate. There is furthermore a risk that the allo-

cation of the purchase price in the course of the initial

at-equity measurement was incorrect.

Prior to the effectiveness of the transaction, significant

parts of the former Daimler Trucks & Buses segment

were presented as discontinued operations. On the

effectiveness of the transaction, the Daimler commer-

cial vehicles business was deconsolidated and the

remaining investment in Daimler Truck Holding AG is

included in the consolidated financial statements at

equity. The Mercedes-Benz Group is reporting a post-

tax gain on discontinued operations for the financial

year 2021 of € 12,34ꢉ million.

Our Audit Approach

We first of all assessed the arrangements made in the

Spin-off Agreement, especially their treatment by the

transferor legal entity and obtained an understanding of

the individual transactions and the reflection in the

financial statements of the transaction as a whole.

The initial measurement of the investment in Daimler

Truck Holding AG was carried out at a fair value of

In the course of the audit, we obtained an understand-

ing of the effects on the financial statements of the

standardized measures in the Spin-off Agreement. In

this context, we also evaluated the legal execution of

the hive-down and spin-off with regard to whether the

criteria under corporate transformation and company

€

8,752 million. The fair value was determined by an

external appraiser.

The fair value on initial recognition was then offset in an

auxiliary calculation against the proportionate assets

and liabilities reflected in the course of a purchase price law were fulfilled.

allocation reported with the at-equity-carrying amount.

Mercedes-Benz Group AG involved an external appraiser We furthermore evaluated whether the classification of

in the allocation of the purchase price.

significant parts of the former Daimler Trucks & Buses

segment as discontinued operations in accordance with

IFRS 5 was carried out appropriately. To this end, we

interrogated the legal representatives and evaluated the

internal and external reporting in the context of the

classification criteria under IFRS 5. In addition, we

assessed whether the allocation of the income and

expenses to the discontinued operations was carried

out correctly.

The agreement providing the basis for the transactions

is complex.

The classification and therefore the recognition of the

main elements of the former Daimler Trucks & Buses

segment as discontinued operations in accordance with

IFRS 5 is complex.

The determination of the value for the initial recording of Moreover, we evaluated with the help of our valuation

the at-equity participation at fair value and the alloca-

tion of the purchase price in the course of the first-time

at-equity measurement are complex and are based on a

number of discretionary assumptions. The main

specialists the appropriateness of the initial recognition

of the at-equity measurement as of the transaction date

at fair value, the appropriateness of the purchase price

allocation in the course of first time at-equity-measure-

assumptions relate to the expected development of rev- ment and the principal assumptions and data and the

enue and the margins, the royalty rates applied and the

capital costs.

valuation methods of the external appraiser, whose

expertise provided the basis for the recording.

The risk for the consolidated financial statements is that

discontinued operations were improperly classified so

that the disclosure of the discontinued operations in the

consolidated income statement is erroneous and that

the disclosure required by IFRS 5 in the notes to the

332

Annual Report 2021 · Mercedes-Benz Group

Further Information

We assessed the professional competence, capabilities,

impartiality and the working results of the appraiser

engaged by Mercedes-Benz Group AG.

We compared the assumptions and parameters provid-

ing the basis for the costs of capital, especially the risk-

free interest rate, the market risk premium and the Beta

factor, with our own assumptions and publicly available

data. To take account of the existing forecast uncer-

tainty, we in addition investigated the impact of possi-

ble changes in the capitalization interest rate, the

expected cash flows and the long-term growth rates on

the fair value, by calculating alternative scenarios and

compared them with the company’s measurement

results (sensitivity analysis). To ensure the arithmetical

correctness of the valuation method applied, we

For the assessment of the appropriateness of the valua-

tion of the first-time recording of the at-equity partici-

pation and the purchase price allocation, we first of all

analyzed whether the measurement methods applied

are consistent with the accounting regulations. We then

assessed, with the help of our valuation specialists, the

principal measurement assumptions applied. To this

end, we discussed the expected cash flows and the

assumed long-term growth rates with those responsible

for the planning. In addition, we carried out reconcilia-

tions with other forecasts available internally for

obtained an understanding of the company’s calcula-

tions on the basis of selected risk-oriented elements.

instance for tax purposes and with the budget prepared

In addition, we obtained an understanding of the

by the legal representatives and approved by the Super- presentation of the discontinued operations in the

visory Board. We furthermore evaluated the consistency

of the assumptions with external industry-specific and

general market estimations.

income statement. Finally, we evaluated whether the

disclosures in the notes to the consolidated financial

statements on the spin-off and hive-down, including the

presentation as discontinued operations, and the fur-

ther measures foreseen by the Spin-off Agreement, in

the notes to the consolidated financial statements of

Mercedes-Benz Group AG are sufficiently detailed and

correct.

We compared the royalty rates referred to for the

measurement of the intangible assets with reference

amounts from relevant databases.

333

Annual Report 2021 · Mercedes-Benz Group

Further Information

Our Observations

The classification of significant elements of the former

Daimler Trucks & Buses segment as discontinued opera- Please refer with regard to the accounting policies and

Impairment Risk on Operating Leases

tions in accordance with IFRS 5 is appropriate.

methods applied to the notes to the consolidated finan-

cial statements in Note 1 “Significant accounting poli-

cies” and Note 2 “Accounting estimates and manage-

ment judgments”. Further information on the operating

leases can be found in the notes to the consolidated

financial statements in Note 13 “Equipment on operat-

ing leases” and in the comments in the combined man-

agement report in the section entitled “Industry and

business risks and opportunities”.

The measurement methods providing the basis for the

first-time at-equity measurement and the determination

of the value for the purchase price allocation of the

retained shares in Daimler Truck Holding AG are appro-

priate and consistent with the accounting and measure-

ment principles that are to be applied.

The main assumptions and parameters for the measure-

ment and the subsequent purchase price allocation are

appropriate.

The Risk for the Consolidated Financial Statements

The statement of financial position caption “Equipment

on operating leases” (€ 44,471 million) includes among

other things Mercedes-Benz passenger cars, which are

purchased by non-group dealers or other third parties

and are the subject of an operating lease with the

Mercedes-Benz Group. An impairment risk exists with

regard to these vehicles that is primarily dependent on

the residual value achievable at the end of the lease.

These future residual values are dependent on the situ-

ation in the used vehicle markets prevailing when the

vehicles are returned. The future-oriented valuation is

based on a number of discretionary assumptions. The

risk for the financial statements is that any impairment

losses will not be recognized or that the amounts recog-

nized will be inadequate.

The fundamental approach to the reflection of the

impacts in the financial statements of the Spin-off

Agreement between Mercedes-Benz Group AG and

Daimler Truck Holding AG is appropriate and consistent

with the accounting and measurement principles that

are to be applied.

The disclosures required by IFRS for the presentation as

discontinued operations and the disclosures on the

spin-off and hive-down in the notes to the consolidated

financial statements are sufficiently detailed and cor-

rect.

334

Annual Report 2021 · Mercedes-Benz Group

Further Information

Our Audit Approach

Loss Allowances on Receivables from

We audited the recoverability of the Mercedes-Benz

passenger cars purchased externally in the statement of

financial position caption “Equipment on operating

leases”. We investigated and appraised the indications

assumed by the Group for any need for an impairment

loss and where necessary obtained an understanding of

the write-downs calculated by the Mercedes-Benz

Group. We have assessed the Mercedes-Benz Group’s

evaluation with regard to the residual values achievable

Financial Services

Please refer with regard to the accounting policies

applied to the notes to the consolidated financial state-

ments in Note 2 “Accounting estimates and manage-

ment judgments”. Further information on allowances on

receivables from financial services can be found in the

notes to the consolidated financial statements in Note 1

“Significant Accounting Policies”, in Note 15 “Receivables

by the end of the terms of the leases. In this connection, from financial services”, in Note 34 “Management of

we in particular critically reviewed the main influencing

factors, such as the expected number of returns from

leasing, the current marketing results in order to assess

the accuracy of the estimates and future vehicle model

changes. For significant markets we furthermore also

audited the consistency of the assumptions made by

the Mercedes-Benz Group with residual value forecasts

by independent expert third parties.

financial risks” and in the combined management report

in the section entitled “Industry and business risks and

opportunities”.

The Risk for the Consolidated Financial Statements

Receivables from financial services (€ 80,ꢉ25 million)

resulting from the Group’s financing and leasing activi-

ties include receivables from sales financing with cus-

tomers, receivables from sales financing with dealers

and receivables from finance lease contracts. The loss

allowances on these receivables amounted at the

Our Observations

The assumptions and assessments providing the basis

for the assessment of the recoverability of the externally reporting date to € 959 million.

purchased Mercedes-Benz passenger cars in the state-

ment of financial position caption “Equipment on oper-

ating leases” and the recorded impairment losses are

appropriate.

The calculation of the loss allowances is based on

expected credit losses and therefore also includes

expectations regarding the future. Recognition of the

expected credit losses is carried out by means of a

three-parameter procedure for the determination of loss

allowances. At the same time, various factors determin-

ing the value, such as the determination of statistical

default probabilities and loss rates, the possible amount

receivable on default, the parameter transfer criteria

that are related to a significant change in the default

risk of borrowers, and the calculation of future cash

flows. Furthermore, macroeconomic scenarios (basis

scenarios, optimistic and pessimistic scenarios) flow

into the calculation, which also include Covid-19 effects,

the identification of which to a high degree includes dis-

cretionary judgments and uncertainties. Further exter-

nal information, for instance in connection with the

Covid-19 pandemic which cannot be depicted through

the scenarios, are included in the measurement, to the

extent necessary, by downstream adjustments. The risk

for the financial statements is that the creditworthiness

of customers and future cash flows is misjudged or that

335

Annual Report 2021 · Mercedes-Benz Group

Further Information

the calculation of the risk provision parameters is incor-

Our Observations

rect, so that loss allowances are not recognized or are

insufficient.

The methodical approach, the procedures and the

processes to calculate the loss allowances and the

assumptions and risk parameters flowing into the

measurement are appropriate to identify the credit risks

in good time and to determine the recognition of ade-

quate loss allowances.

Our Audit Approach

We obtained a comprehensive understanding of the

development of the portfolios, the associated counter-

party default risks and the processes for identifying,

managing, monitoring and measuring credit risks by

inspecting analyses and risk reports, interrogations,

review of guidelines and working instructions, checking

the defined methods and their implementation and

checking and walking through the validation process

and the individual validation reports.

We audited the appropriateness and effectiveness of

the internal control system with regard to the risk clas-

sification process and risk models and the identification

of the factors determining the value and the loss allow-

ances, also by rechecking the calculations. To this end,

we also evaluated the relevant IT systems and internal

procedures. In addition to the audit by our IT specialists

of the propriety of the IT systems affected and related

interfaces to ensure the completeness and correctness

of the data, the audit also included the audit of auto-

matic controls for data entry and data processing. The

main focus of our audit was the evaluation of the

methodical approach in the definition of risk categories

and the determination of default probabilities and loss

rates that are derived from historical data. We took into

account the impact of Covid-19 in conjunction with the

audit of the macroeconomic scenarios and the down-

stream adjustments. We obtained an understanding of

this based on a risk-oriented selection of credit portfo-

lios. We satisfied ourselves with regard to the appropri-

ateness of significant risk parameters based on the

results of a validation performed by Mercedes-Benz

Mobility and evaluated the adjustments of the parame-

ters to the current market situation. In this connection,

we audited the data supporting the validations on the

basis of a conscious sample.

33ꢉ

Annual Report 2021 · Mercedes-Benz Group

Further Information

Measurement of the Provision for

Product Warranties

Our Audit Approach

Our audit procedures included among other things the

evaluation of the process to calculate the provision for

product warranties and the evaluation of the relevant

assumptions and their derivation for the measurement

of the provision. These include primarily assumptions

on expected susceptibility to and the course of damage,

and in addition the monetary value of the damage per

vehicle based on actual warranty, guarantee and good-

will losses. Based on historical analyses, we assessed

the accuracy of the forecasts of past warranty, guaran-

tee and goodwill costs. We also checked that updated

assessments of the future repair costs and procedures

were taken into account. We obtained an understanding

for the underlying numbers of vehicles through the

actual unit sales.

Please refer with regard to the accounting policies and

methods applied to the notes to the consolidated finan-

cial statements in Note 1 “Significant accounting poli-

cies” and Note 2 “Accounting estimates and manage-

ment judgments”. Further information on the guarantees

and product warranties can be found in the notes to the

consolidated financial statements in Note 24 “provi-

sions for other risks” and in the comments in the com-

bined management report in the section entitled “Com-

pany-specific risks and opportunities – Warranty and

goodwill cases”.

The Risk for the Consolidated Financial Statements

The provision for product warranties amounts to

€ꢉ,78ꢉ million and is included in the provisions for other Our Observations

risks.

The calculation methods and the assumptions made are

appropriate.

The Mercedes-Benz Group faces various claims under

product guarantees, or grants various kinds of product

warranties, which are entered into for the error-free

functioning of a Mercedes-Benz Group product sold or

service rendered over a defined period of time. In order

to confirm or reassess future guarantee, warranty and

goodwill expenses, continuously updated information

on the nature and volume and the remedying of faults

that have occurred is recorded and analyzed at the level

of the business unit, model series, damage key and

sales year.

Significant uncertainty for the calculation of the provi-

sion arises with regard to the future loss event. The risk

for the consolidated financial statements is that the

provision is not properly measured.

337

Annual Report 2021 · Mercedes-Benz Group

Further Information

Reflection in the Financial Statements of

Legal Proceedings

The allegation is raised in class actions in various juris-

dictions, including the USA, Canada or the Netherlands,

against the Mercedes-Benz Group and individual sub-

sidiaries that devices are used in Mercedes-Benz diesel

vehicles that impermissibly impair the effectiveness of

emission control systems in reducing nitrogen-oxide

Please refer with regard to the accounting policies and

methods applied to the notes to the consolidated finan-

cial statements Note 1 “Significant accounting policies”

and Note 2 “Accounting estimates and management

judgments”. Further information on the legal proceed-

ings can be found in the notes to the consolidated

financial statements in Note 24 “Provisions for other

risks”, Note 31 “Legal proceedings” and in the combined

management report in the section entitled “Legal and

tax risks and opportunities – legal risks”.

(NO ) emissions and cause excessive emissions. In

x

addition, the plaintiffs contend that consumers were

deliberately misled in connection with the advertising

for Mercedes-Benz diesel vehicles.

In Germany, a large number of customers of diesel vehi-

cles have filed claims for damages or the reversal of

purchase agreements. They contend that the vehicles

are equipped with impermissible defeat devices and/or

report impermissibly high emission or consumption fig-

The Risk for the Consolidated Financial Statements

Mercedes-Benz Group AG and its subsidiaries face vari-

ous legal proceedings, claims and governmental investi- ures.

gations and administrative orders (legal proceedings) on

a wide range of topics, including for example vehicle

safety, emissions, fuel economy, financial services,

dealer, supplier and other contractual relationships,

Furthermore, investors in Germany have filed claims on

account of the alleged violation of disclosure require-

ments. The investors contend among other things that

intellectual property rights, product warranties, environ- the Mercedes-Benz Group failed to publish insider

mental matters, antitrust matters (including actions for

damages) and shareholder matters. Legal proceedings

relating to products deal with claims on account of

alleged vehicle defects, some of which are asserted by

way of a class action lawsuit. If the outcome of such

legal proceedings is detrimental to the Mercedes-Benz

Group, the Group may be required to pay substantial

compensatory and punitive damages or fines. In addi-

tion, service actions, recall campaigns or other costly

actions may have to be undertaken.

knowledge in connection with the emissions behavior of

its Mercedes-Benz diesel vehicles immediately, and

moreover made erroneous and misleading claims. In

addition, they allege that the purchase price of the

financial instruments of Mercedes-Benz Group AG

(especially shares) acquired by them would have been

lower if Mercedes-Benz Group had reported in accord-

ance with its obligations.

b) Diesel emissions behavior: administrative proceed-

ings in the Mercedes-Benz Cars & Vans segment

Whether the recognition of a provision and, if so, in

what amount it is necessary on account of legal pro-

Various federal and state authorities and further institu-

ceedings is dependent to a high degree on discretionary tions worldwide are proceeding actively against the

estimates and assumptions by the legal representatives. Mercedes-Benz Group in the form of inquiries, investi-

In view of this and the monetary amounts involved with

regard to the risks, the following legal proceedings of

the Mercedes-Benz Group are in our opinion of particu-

lar importance.

gations, proceedings and/or directives. These activities

relate in particular to test results and emission control

systems in Mercedes-Benz-diesel vehicles and/or the

interactions of the Mercedes-Benz Group with the rele-

vant authorities and related legal questions and impli-

cations, for instance also under applicable environmen-

tal, criminal and antitrust law.

a) Diesel emission behavior: class action and other law-

suits in the USA, Canada, Germany and other countries

in the Mercedes-Benz Cars & Vans segment

338

Annual Report 2021 · Mercedes-Benz Group

Further Information

The Mercedes-Benz Group recognized provisions for

legal proceedings as of December 31, 2021. The recogni-

tion of provisions for legal proceedings is conditional on

Where agreement has been reached in the meantime

regarding individual matters, we compared the amounts

originally estimated with the final obligations and in this

the existence of a present external obligation, which will way obtained an impression of the quality of the esti-

probably lead to an outflow of resources embodying

economic benefits and can be reliably estimated. The

amount provided is thereby determined in accordance

with the best possible estimate of the settlement

amount. The recognition and measurement of the rec-

ognized provisions for legal proceedings are based on

mates.

Finally, we evaluated the appropriateness of the

description of the aforementioned legal proceedings in

the notes to the consolidated financial statements.

discretionary assessments and assumptions by the legal Our Observations

representatives.

The discretionary assessments and assumptions of the

legal representatives are appropriate.

The risk for the consolidated financial statements is that

provisions for legal proceedings are not set up or are

inadequate.

Our Audit Approach

Our audit procedures comprised firstly an evaluation of

the process established by the Company to ensure the

recording of the risks, the estimation of the outcome of

the proceedings and the reflection in the financial state-

ments of the legal proceedings. Secondly, we held dis-

cussions with the internal legal department and with

further departments familiar with the matters under dis-

pute, and with the Company’s external advisors and

attorneys, in order to obtain explanations on the devel-

opments and the reasons that had led to the respective

estimations. In addition, we evaluated the underlying

documents and minutes and the calculations for the

respective provisions. The assessments of the legal rep-

resentatives regarding the developments in the areas

referred to were made available to us by the Company

in writing. In addition, we interviewed the Company’s

legal representatives. As of the reporting date, assess-

ments were available from external attorneys on the rel-

evant proceedings, which support the assessment of

the risks by the legal representatives.

339

Annual Report 2021 · Mercedes-Benz Group

Further Information

Other information

Responsibilities of the Legal Representatives and

the Supervisory Board for the Consolidated Financial

Statements and the Combined Management Report

The legal representatives are responsible for the prepa-

ration of the consolidated financial statements that

comply, in all material respects, with IFRSs as adopted

by the EU and the additional requirements of German

commercial law pursuant to Section 315e paragraph 1

HGB and that the consolidated financial statements, in

compliance with these requirements, give a true and fair

view of the assets, liabilities, financial position and

financial performance of the Group. In addition, the

legal representatives are responsible for such internal

control as they have determined necessary to enable

the preparation of consolidated financial statements

that are free from material misstatement, whether due

to fraud or error.

The legal representatives and the Supervisory Board are

responsible for the other information. The other infor-

mation comprises the following elements of the com-

bined management report, the content of which we

have not audited:

–

the combined declaration on corporate management,

which is referred to in the combined management

report.

–

the disclosures in the combined management report

on EU taxonomy extraneous to management reports

in the tables

  

B.32, B.33 and B.34 and marked

as unaudited are marked as having been reviewed

with limited certainty.

The other information also includes the remaining parts

of the annual report.

In preparing the consolidated financial statements, the

legal representatives are responsible for assessing the

Group’s ability to continue as a going concern. They are

also responsible for disclosing, as applicable, matters

related to going concern. In addition, they are responsi-

ble for financial reporting based on the going concern

basis of accounting unless there is an intention to liqui-

date the Group or to cease operations, or there is no

realistic alternative but to do so.

The other information does not comprise the consoli-

dated financial statements, the audited disclosures in

the management report and our related auditor’s report.

Our opinions on the consolidated financial statements

and on the combined management report do not cover

the other information, and consequently we do not

express an opinion or any other form of assurance con-

clusion thereon.

Furthermore, the legal representatives are responsible

for the preparation of the combined management report

that, as a whole, provides an appropriate view of the

Group`s position and is, in all material respects, con-

sistent with the consolidated financial statements, com-

plies with German legal requirements, and appropriately

presents the opportunities and risks of future develop-

ment. In addition, the legal representatives are respon-

sible for such arrangements and measures (systems) as

they have considered necessary to enable the prepara-

tion of a combined management report that is in

accordance with the applicable German legal require-

ments, and to be able to provide sufficient appropriate

evidence for the assertions in the combined manage-

ment report.

In connection with our audit, our responsibility is to

read the other information and, in so doing, to consider

whether the other information

–

is materially inconsistent with the consolidated finan-

cial statements, with the management report informa-

tion audited for content or our knowledge obtained in

the audit, or

–

otherwise appears to be materially misstated.

340

Annual Report 2021 · Mercedes-Benz Group

Further Information

The Supervisory Board is responsible for overseeing the

resulting from error, as fraud may involve collusion,

forgery, intentional omissions, misrepresentations, or

the override of internal control.

Group`s financial reporting process for the preparation

of the consolidated financial statements and the com-

bined management report.

–

obtain an understanding of internal control relevant to

the audit of the consolidated financial statements and

of arrangements and measures (systems) relevant to

the audit of the combined management report in

order to design audit procedures that are appropriate

in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of these

systems.

Auditor’s Responsibilities for the Audit

of the Consolidated Financial Statements

and of the Combined Management Report

Our objectives are to obtain reasonable assurance

about whether the consolidated financial statements as

a whole are free from material misstatement, whether

due to fraud or error, and whether the combined man-

agement report as a whole provides an appropriate view

of the Group´s position and, in all material respects, is

consistent with the consolidated financial statements

and the knowledge obtained in the audit, complies with

the German legal requirements and appropriately pre-

– evaluate the appropriateness of accounting policies

used by management and the reasonableness of esti-

mates made by management and related disclosures.

sents the opportunities and risks of future development, – conclude on the appropriateness of the use by the

as well as to issue an auditor’s report that includes our

opinions on the consolidated financial statements and

on the combined management report.

legal representatives of the going concern basis of

accounting and, based on the audit evidence

obtained, whether a material uncertainty exists

related to events or conditions that may cast signifi-

cant doubt on the Group`s ability to continue as a

going concern. If we conclude that a material uncer-

tainty exists, we are required to draw attention in the

auditor’s report to the related disclosures in the con-

solidated financial statements and in the combined

management report or, if such disclosures are inade-

quate, to modify our respective opinions. Our conclu-

sions are based on the audit evidence obtained up to

the date of our auditor’s report. However, future

events or conditions may cause the Group to cease to

be able to continue as a going concern.

Reasonable assurance is a high level of assurance, but

is not a guarantee, that an audit conducted in accord-

ance with Section 317 HGB and the EU Audit Regulation

and in compliance with German Generally Accepted

Standards for Financial Statement Audits promulgated

by the Institut der Wirtschaftsprüfer (IDW) and supple-

mentary compliance with the ISAs will always detect a

material misstatement. Misstatements can arise from

fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected

to influence the economic decisions of users taken on

the basis of these consolidated financial statements

and this combined management report.

– evaluate the overall presentation, structure and con-

tent of the consolidated financial statements, includ-

ing the disclosures, and whether the consolidated

financial statements present the underlying transac-

tions and events in a manner that the consolidated

financial statements give a true and fair view of the

assets, liabilities, financial position and financial per-

formance of the Group in compliance with IFRSs as

adopted by the EU and the additional requirements of

German commercial law pursuant to Section 315e par-

agraph 1 HGB.

We exercise professional judgment and maintain pro-

fessional skepticism throughout the audit. We also

–

identify and assess the risks of material misstatement

of the consolidated financial statements and of the

combined management report, whether due to fraud

or error, design and perform audit procedures respon-

sive to those risks, and obtain audit evidence that is

sufficient and appropriate to provide a basis for our

opinions. The risk of not detecting a material mis-

statement resulting from fraud is higher than for one

341

Annual Report 2021 · Mercedes-Benz Group

Further Information

–

obtain sufficient appropriate audit evidence regarding

We communicate with those charged with governance

regarding, among other matters, the planned scope and

timing of the audit and significant audit findings, includ-

ing any significant deficiencies in internal control that

we identify during our audit.

the financial information of the entities or business

activities within the Group to express opinions on the

consolidated financial statements and on the com-

bined management report. We are responsible for the

direction, supervision and performance of the group

audit. We remain solely responsible for our opinions.

We also provide those charged with governance with a

statement that we have complied with the relevant

independence requirements and communicate with

them all relationships and other matters that may rea-

sonably be thought to bear on our independence, and

where applicable, the related safeguards.

–

evaluate the consistency of the combined manage-

ment report with the consolidated financial state-

ments, its conformity with (German) law, and the view

of the Group’s position it provides.

perform audit procedures on the prospective informa- From the matters communicated with those charged

tion presented by the legal representatives in the

combined management report. On the basis of suffi-

cient appropriate audit evidence, we evaluate, in par-

ticular, the significant assumptions used by the legal

representatives as a basis for the prospective infor-

mation and evaluate the proper derivation of the pro-

spective information from these assumptions. We do

not express a separate opinion on the prospective

information and on the assumptions used as a basis.

There is a substantial unavoidable risk that future

events will differ materially from the prospective

information.

with governance, we determine those matters that were

of most significance in the audit of the consolidated

financial statements of the current period and are there-

fore the key audit matters. We describe these matters in

our auditor’s report unless laws or other legal regula-

tions preclude public disclosure of the matter.

342

Annual Report 2021 · Mercedes-Benz Group

Further Information

Other Legal and Regulatory Requirements

We conducted our assurance work on the rendering of

the consolidated financial statements and of the com-

bined management report contained in the file and

identified in accordance with Section 317 paragraph 3a

HGB and the IDW Assurance Standard: Assurance Work

on the Electronic Rendering of Financial Statements and

Management Reports Prepared for Publication Purposes

in accordance with Section 317 paragraph 3a HGB (IDW

PS 410 (10.2021)) conducive to the understanding of the

report at an international level and the International

Standard on Assurance Engagements 3000 (Revised).

Our responsibility in accordance therewith is further

described below. Our audit firm applies IDW Standard

on Quality Management 1: Requirements for Quality

Management in Audit Firms (IDW QS 1).

Report on the Assurance in accordance with Section

3

1ꢇ paragraph 3a HGB on the Electronic Rendering of

the Consolidated Financial Statements and the Com-

bined Management Report Prepared for Publication

Purposes

We have performed assurance work in accordance with

Section 317 paragraph 3a HGB to obtain reasonable

assurance about whether the rendering of the consoli-

dated financial statements and the combined manage-

ment report (hereinafter the “ESEF documents”)

contained in the file that can be downloaded by the

issuer from the electronic client portal with access

protection “mercedesbenzgroupag-2021-12-31-de.zip”

(SHA25ꢉ-Hashwert: 37ee71a111ꢉaꢉc3a33141ꢉ

5

3c9ꢉ0a9e58ꢉ18b174e9ab351ꢉ2ꢉdꢉ190ꢉ10bb77da),

The Company’s legal representatives are responsible for

the preparation of the ESEF documents, including the

electronic rendering of the consolidated financial state-

ments and the combined management report, in

accordance with Section 328 paragraph 1 sentence 4

item 1 HGB and for the tagging of the consolidated

and prepared for publication purposes complies in all

material respects with the requirements of Section 328

paragraph 1 HGB for the electronic reporting format

(“ESEF format”). In accordance with German legal

requirements, this assurance only extends to the con-

version of the information contained in the consolidated financial statements in accordance with Section 328

financial statements and the combined management

report into the ESEF format and therefore relates neither

paragraph 1 sentence 4 item 2 HGB.

to the information contained in these renderings nor any In addition, the Company’s legal representatives are

other information contained in the file identified above.

responsible for such internal controls that they have

considered necessary to enable the preparation of ESEF

documents that are free from material intentional or

unintentional non-compliance with the requirements of

Section 328 paragraph 1 HGB for the electronic report-

ing format.

In our opinion, the rendering of the consolidated finan-

cial statements and the combined management report

contained in the electronic file and made available for

publication purposes complies in all material respects

with the requirements of Section 328 paragraph 1 HGB

for the electronic reporting format. Beyond this assur-

ance opinion and our audit opinion on the accompany-

ing consolidated financial statements and the accompa-

nying combined management report for the financial

year from January 1 to December 31, 2021 contained in

the “Report on the Audit of the Consolidated Financial

Statements and the Combined Management Report”

above, we do not express any assurance opinion on the

information contained within these renderings or on the

other information contained in the file identified above.

The Supervisory Board is responsible for overseeing the

preparation of the ESEF documents as part of the finan-

cial reporting process.

343

Annual Report 2021 · Mercedes-Benz Group

Further Information

Our objective is to obtain reasonable assurance about

Further Information pursuant to Article 1ꢅ of the EU

whether the ESEF documents are free from material

intentional or unintentional non-compliance with the

requirements of Section 328 paragraph 1 HGB. We exer-

cise professional judgement and maintain professional

skepticism throughout the assurance work. We also:

Audit Regulation

We were elected as group auditor by the Annual Share-

holders’ Meeting on March 31, 2021. We were engaged

by the Supervisory Board on July 1ꢉ, 2021. We have

been the group auditor of Mercedes-Benz Group AG

without interruption since the financial year 1998.

–

identify and assess the risks of material intentional or

unintentional non-compliance with the requirements

of Section 328 paragraph 1 HGB, design and perform

assurance procedures responsive to those risks, and

obtain assurance evidence that is sufficient and

appropriate to provide a basis for our assurance opin-

ion.

We declare that the opinions expressed in this auditor’s

report are consistent with the additional report to the

audit committee pursuant to Article 11 of the EU Audit

Regulation (long-form audit report).

Other matter – Use of the Auditor’s Report

–

obtain an understanding of internal control relevant to Our auditor´s report must always be read together with

the assurance on the ESEF documents in order to

design assurance procedures that are appropriate in

the circumstances, but not for the purpose of

expressing an assurance opinion on the effectiveness

of these controls.

the audited consolidated financial statements and the

audited combined management report as well as the

examined ESEF documents. The consolidated financial

statements and combined management report con-

verted to the ESEF format – including the versions to be

published in the German Federal Gazette (Bundesan-

evaluate the technical validity of the ESEF documents, zeiger) – are merely electronic renderings of the audited

i.e. whether the electronic file made available contain- consolidated financial statements and the audited

ing the ESEF documents meets the requirements of

the Delegated Regulation (EU) 2019/815, as amended

as at the reporting date, on the technical specification

for this electronic file.

group management report and do not take their place.

In particular, the ESEF report and our assurance opinion

contained therein are to be used solely together with

the examined ESEF documents made available in elec-

tronic form.

–

evaluate whether the ESEF documents provide an

XHTML rendering with content equivalent to the

audited consolidated financial statements and the

audited group management report.

German Public Auditor responsible for

the engagement

The German Public Auditor responsible for the

engagement is Alexander Bock.

evaluate whether the tagging of the ESEF documents

with Inline XBRL technology (iXBRL) in accordance

with the requirements of Articles 4 and ꢉ of the Dele-

gated Regulation (EU) 2019/815, as amended as at the

reporting date, enables an appropriate and complete

machine-readable XBRL copy of the XHTML rendering.

Stuttgart, March 10, 2022

KPMG AG

Wirtschaftsprüfungsgesellschaft

(Original German version signed by:)

Sailer

Bock

Wirtschaftsprüfer

(German Public Auditor)

344

Annual Report 2021 · Mercedes-Benz Group

Further Information

Key Figures Mercedes-Benz Group

(Continuing and discontinued operations)

2

02ꢀ

ꢀꢁꢀꢁ

ꢀꢁꢀꢄ/ꢀꢁꢀꢁ

% change

€

amounts in millions

Unit sales

2,75ꢀ,ꢂ66

ꢀ67,97ꢀ

29,069

ꢀ9,2ꢂ0

2ꢂ,ꢂ96

2ꢀ.50

ꢀ,ꢅꢆꢁ,ꢆꢁꢀ

ꢄꢃꢆ,ꢂꢁꢇ

6,6ꢁꢂ

-ꢂ

+9^ꢂ

Revenue

EBIT

+ꢂꢁ0

+ꢀ2ꢂ

+ꢁ8ꢁ

+5ꢂꢁ

+270

+ꢁ

Adjusted EBIT

ꢅ,6ꢆꢄ

Net profit

ꢆ,ꢁꢁꢇ

Earnings per share (in €)²

Dividend per share (in €)

Free cash flow of the industrial business

Adjusted free cash flow of the industrial business

Net liquidity of the industrial business (December 31)

Investments in property, plant and equipment

Research and development expenditure

Employees (December 31)³

ꢂ.ꢂꢇ

5.00

ꢄ.ꢂꢃ

8,606

ꢅ,ꢀꢃꢇ

ꢀ0,882

2ꢀ,005

ꢁ,579

ꢇ,ꢄꢃꢃ

+ꢀ9

+ꢀ8

-20

ꢄꢈ,ꢅꢃꢃ

ꢃ,ꢈꢆꢄ

9,ꢀ05

ꢅ,6ꢄꢆ

+6

ꢀ72,ꢁ25

ꢀꢈꢃ,ꢇꢆꢂ

-ꢂ8

1

2

3

Adjusted for exchange rate effects, increase in revenue from continuing operations by 11 %.

Based on net profit attributable to shareholders of Mercedes-Benz Group AG.

Active workforce without holiday workers; as at 31/12/2021 excluding employees of the spun-off Daimler commercial vehicle business.

E.01

Share price index

2

00

80

1

60

40

1

20

100

80

60

40

31/12/2019

31/12/2020

STOXX Europe Auto Index

31/12/2021

Mercedes-Benz Group AG*

DAX

*

When the spin-off and hive-down of the Daimler commercial vehicle business took effect, the historical share prices were retroactively adjusted by a factor of 0.83945 for the period

until December 9, 2021.

345

Annual Report 2021 · Mercedes-Benz Group

Further Information

Key Figures for the Divisions

2

02ꢀ

ꢀꢁꢀꢁ

ꢀꢁꢀꢄ/ꢀꢁꢀꢁ

% change

€

amounts in millions

Mercedes-Benz Cars & Vans

Unit sales

2,ꢂꢂ0,ꢀ69

ꢀ09,6ꢁ8

ꢀꢂ,626

ꢀꢂ,9ꢀꢁ

ꢀ2.ꢁ

ꢀ,ꢆ6ꢄ,ꢅꢅꢆ

ꢇꢅ,ꢃꢈ6

ꢃ,ꢄꢈꢀ

6,ꢅꢁꢀ

ꢃ.ꢀ

-5

+ꢀꢀ

+ꢀ6ꢂ

+ꢀ05

.

Revenue

EBIT

Adjusted EBIT

Return on sales (in %)

Adjusted return on sales (in %)

CFBIT

ꢀ2.7

6.ꢇ

.

ꢀ0,ꢀ70

ꢀ2,295

0.9

ꢈ,ꢁꢆꢅ

ꢈ,ꢇꢄꢈ

ꢄ.ꢀ

+ꢁꢁ

+55

.

Adjusted CFBIT

Adjusted cash conversion rate¹

Investments in property, plant and equipment

Research and development expenditure

thereof capitalised development costs

ꢂ,787

7,695

2,262

ꢀꢀ5

ꢆ,ꢅ6ꢀ

ꢈ,ꢄꢇꢇ

ꢀ,ꢂꢇꢄ

ꢄꢂ6

-22

+7

-5

CO

2

emissions of the new car fleet in Europe in accordance with WLTP (in g/km)

-ꢀ5

-2

Employees (December 31)²

ꢀ58,228

ꢄ6ꢀ,ꢄꢀꢁ

Mercedes-Benz Mobility

Revenue

27,9ꢁꢀ

ꢂ,ꢁ9ꢂ

ꢂ,ꢁꢁ9

22.ꢂ

ꢀꢈ,6ꢇꢇ

ꢄ,ꢆꢂ6

ꢄ,ꢃꢇꢃ

ꢇ.ꢅ

+ꢀ

+ꢀꢁꢂ

+ꢀꢀ6

.

EBIT

Adjusted EBIT

Return on equity (in %)

Adjusted return on equity (in %)

New business

22.0

ꢄꢁ.ꢇ

.

6ꢂ,6ꢂꢀ

ꢀꢂꢂ,687

78

6ꢈ,ꢈꢅ6

ꢄꢃꢁ,ꢃꢃꢂ

ꢂꢇ

-6

Contract volume (December 31)

Investments in property, plant and equipment

Employees (December 31)²

-ꢀꢀ

+ꢀ00

-ꢀ5

9,5ꢂꢀ

ꢄꢄ,ꢀꢃꢂ

1

2

The adjusted cash conversion rate is the ratio of adjusted CFBIT to adjusted EBIT.

Active workforce without holiday workers.

34ꢉ

Annual Report 2021 · Mercedes-Benz Group

Further Information

Information on the Internet

Further information about the Mercedes-Benz share

can be found in the Investors section at

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group.mercedes-benz.com/investors

Annual and interim reports as well as company financial

statements are available there. In addition, you can find

the latest news, the financial calendar, presentations,

various overviews of key figures, information on the

share price and additional services.

We make all annual and interim reports only available

online to download as PDF files.

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group.mercedes-benz.com/investors/reports-news

Further information is available at

group.mercedes-benz.com/en

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Mercedes-Benz Group AG

054ꢉ Stuttgart

Investor Relations

Fax +49 711 17 94075

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Tel. +49 711 17 0

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Investor Relations

347

Mercedes-Benz Group AG, Mercedesstraße 120, 70372 Stuttgart, Germany