Mercedes-Benz Finans Danmark A/S

Ledelsesberetning

2024 2023 2022 2021 2020 DKKmDKKmDKKmDKKmDKKmKey figures Profit/loss Revenue 840726 594538507Operating profit 123117 114109103Net profit for the year9855968580Net financials 1891482898Balance sheet Investment in property, plant and equipment 1,7239641,069957633Total assets 6,4635,4114,8344,9155,395Equity 367323 322351266Ratios Net profit ratio before tax 14.6%16,1%19.1% 20.3%20.4%Return on assets 2.1%2.3%2.3%2.1%1.9%Solvency ratio 5.7%6.0%6.7%7.1%4.9%Return on equity 28.4%16.9% 28.6% 27.6%31.2%Average number of employees 2222222324Reference for calculation of Ratios is made to definitions and terms under accounting policies in note 1. Development in activities and financial position Operating profit amounted to DKK 122.8 million (2023: DKK 117.2 million), which is an increase in comparison to last year's result. In last year's outlook the company expected the profit to be lower than in 2023. Mainly the higher leasing portfolio contributed to the increased profit. The credit reserves for bad and doubtful debts are on a lower level in 2024 compared to 2023 due to low cost of risk and write offs in 2024. The portfolio quality is sound, which is a result of a tight debt recovery process, and a consistent underwriting policy during the last years. Refinancing costs has increased due to growing a portfolio throughout the year. New business increased in 2024. The main reason for the business growth was the successful Private Lease campaign, which was focused on battery electric vehicles. The Company's total assets increased to DKK 6.5 billion (2023: DKK 5.4 billion). Capital resources At 31 December 2024, the Company's equity amounted to DKK 366.6 million (31 December 2023: DKK 322.8 million) corresponding to a solvency ratio of 5.7% (31 December 2023: 6.0%). Management considers the Company's capital resources to be satisfactory. Outlook The Company has made investments to further improve processes and systems. This will further enhance the Company's value propositions towards costumers and dealers. The Company's assets are planned to be on a slightly higher level in 2025. The management expects accordingly a higher interest result. However, the credit risk costs are, after the low level in 2024, expected to be on a long-term average which is higher than the 2024 credit cost. The operating profit is expected below the 2024 level. Special risks TheCompany'srisks primarily include credit risks, market risks and liquidity risks.Credit risks The decisive basis for decision for the Company's credit granting is the borrower's repayment ability. In order to further minimise the risk, the majority of the Company's credits are also hedged through underlying assets subject to restrictions on title. Significant fluctuations in the market prices of the underlying assets will therefore affect the Company's credit risk. The Company's risk diversification is sound. This is a result of the fact that the Company has relatively few large-scale borrowers and the majority of customers have commitments including only one or a few cars. Market risksThe Company's most significant market risks are interest rate and liquidity risk. For both risk areas, the Company is following the matched funded principle to minimise the exposure. The existing portfolio is analysed and the expected new volume is simulated on a monthly basis to determine the funding requirements. The majority of the Company's loans and leases consist of lease agreements where the interest rate and lease payment, respectively, are adjusted in relation to the development of the short-term market rate. Similarly, the Company's refinancing consists of loan arrangements adjusted in relation to the development in the short-term market rate. The Company is continuously matching the Company's loans and depreciation of leases to refinancing with similar terms. Funding is raised primarily through Mercedes-Benz AG Group. Alternatively and when terms and conditions are favourable, funding through external banks is sought. Liquidity risksMercedes-Benz Finans Danmark A/S funds itself with Mercedes-Benz group internal financing and external bank loans. The structure of the funding is done in a way to eliminate any liquidity risk. Mercedes-Benz Finans Danmark A/S runs a monthly Asset Liability Management analysis takes into account the run-off of the portfolio and the financial liabilities as well as non-interest bearing assets and liabilities. Based on those results as well as the new acquisitions in the Company’s portfolios the funding is determined and executed.

Beskrivelse af virksomhedens væsentligste aktiviteter

Principal activities The Company's principal activities comprise credit granting in the form of financing and leasing of new and used Mercedes-Benz cars and vans as well as other makes of vehicles marketed by Mercedes-Benz authorised dealers.