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Conference Call
Q3 and January-September 2009 Results


Bodo Uebber

Member of the Board of Management
Finance & Controlli...
Automotive market slump in triad markets


             Passenger Cars
             Passenger Cars                        ...
Sales have stabilized
– Group sales in thousands of units –

       Mercedes-Benz Cars
       Mercedes-Benz Cars          ...
Key financials


– in billions of € –                             Q1 2009   Q2 2009   Q3 2009

Revenue                    ...
Changes in net liquidity - industrial business
– in billions of € –
                                                      ...
Mercedes-Benz Cars

Turnaround achieved, back to positive figures
in Q3 2009
– EBIT in millions of € –


       1,000


  ...
Mercedes-Benz Cars

Model mix improved by launch of new E-Class and
new-generation S-Class
– Group sales in thousands of u...
Mercedes-Benz Cars

Product highlights
 E-Class station wagon        Mercedes-Benz SLS AMG




 B-Class F-CELL            ...
Daimler Trucks

Weak demand and repositioning in NAFTA and Asia
impact earnings, but low point has been passed in Q2
– EBI...
Daimler Trucks

Incoming orders show signs of recovery in the truck
business
– Incoming orders in thousands of units –


 ...
Daimler Trucks

Product highlights
   Mercedes-Benz Actros Safety Truck   Freightliner Business Class M2 112 NG




   Fre...
Mercedes-Benz Vans

Break-even achieved through countermeasures and
slight market recovery
– EBIT in millions of € –


   ...
Mercedes-Benz Vans

Product highlights

   Mercedes-Benz Sprinter BlueEFFICIENCY




                                     ...
Daimler Buses

Daimler Buses maintain profitability despite lower
unit sales in major markets
– EBIT in millions of € –


...
Daimler Buses

Product highlights
    Mercedes-Benz Citaro LÜ                             Setra TopClass 400




    Orion...
Daimler Financial Services

Financial Services portfolio decreases after its peak
at the end of September 2008
– Contract ...
Daimler Financial Services

Financial Services affected by higher cost of risk

– EBIT in millions of € –


       250
   ...
Further improvement in Group EBIT from ongoing
business

– in billions of € –                       Q1 2009   Q2 2009   Q3...
Daimler approaches short, medium & long term need
for action
                                                             ...
Assumptions for automotive markets in 2009

  Car markets
     •   Worldwide market expected to contract by approximately ...
Outlook 2009 for Daimler unit sales


   Mercedes-Benz Cars
       •   Q4 2009 unit sales expected to be above Q3 due to t...
Outlook 2009 for EBIT
  Mercedes-Benz Cars
   •   Q4 2009 EBIT expected to show a moderate improvement compared to Q3
   •...
Conference Call
Q3 and January-September 2009 Results


Questions & Answers




October 27, 2009
                        D...
Group EBIT in Q3 2009
– in millions of € –




                  913            (1,557)




     648
                Reass...
Mercedes-Benz Cars

Positive effect from full availability of new E-Class
and more favorable sales structure
– in millions...
Daimler Trucks

Weak demand for trucks affected EBIT
– in millions of € –



                                            -...
Mercedes-Benz Vans

Break-even achieved due to countermeasures despite
significant market decline
– in millions of € –

  ...
Daimler Buses

Decrease in EBIT due to lower sales volume in major
markets
– in millions of € –

                         ...
Daimler Financial Services

Financial Services affected by higher cost of risk
– in millions of € –



                   ...
Countermeasures to stabilize earnings and cash flow
                       Target                                         ...
Special items affecting EBIT

– in millions of € –                                 3rd quarter       January to Sept.
    ...
Key balance-sheet figures


 – in billions of € –   June 30, 2009   Sept. 30, 2009

 Daimler Group

    Equity ratio      ...
Liquidity

– in millions of € –              June 30, 2009                  September 30, 2009

                        Gr...
Financing liabilities (nominal)

                                                              thereof maturing in
       ...
Funding status of pension and healthcare benefits

– in billions of € –            June 30, 2009   Sept. 30, 2009
Pension ...
Research & development costs


                 Q2 2009                                           Q3 2009
              – ...
Daimler Financial Services


Economic crisis is reflected by higher net credit
losses*


1.2%
1.0%
                       ...
Disclaimer
This document contains forward-looking statements that reflect our current views about future events. The words...
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Q3 Earning report of Daimler AG

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Transcript of "Q3 Earning report of Daimler AG"

  1. 1. Conference Call Q3 and January-September 2009 Results Bodo Uebber Member of the Board of Management Finance & Controlling and Daimler Financial Services October 27, 2009 Date (year-month-day) 1
  2. 2. Automotive market slump in triad markets Passenger Cars Passenger Cars Trucks Trucks Vans Vans in millions of units in thousands of units in thousands of units Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 40 1200 2000 36.0 35.7 34.9 1,029 1800 1,719 35 1,618 1,652 1000 956 30.7 1600 1,496 30 -10% to -15% 822 6.0 1400 800 741 305 25 -32% to -37% 1200 162 7.4 344 20 600 -35% to -45% 1000 7.3 180 800 15 8.6 400 428 234 600 10 7.0 201 99 400 278 200 106 5 8.7 200 419 6.4 198 255 123 0 0 0 '05 '06 '07 '08 '09* '05 '06 '07 '08 '09* '05 '06 '07 '08 '09* *Q3 ’09 based on estimates *Q3 ’09 based on estimates *Q3 ’09 based on estimates 2
  3. 3. Sales have stabilized – Group sales in thousands of units – Mercedes-Benz Cars Mercedes-Benz Cars Daimler Trucks Daimler Trucks 400 150 120 300 90 200 60 100 30 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 2008 2009 Mercedes-Benz Vans Mercedes-Benz Vans Daimler Buses Daimler Buses 100 12 10 80 8 60 6 40 4 20 2 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 2008 2009 3
  4. 4. Key financials – in billions of € – Q1 2009 Q2 2009 Q3 2009 Revenue 18.7 19.6 19.3 EBIT (1.4) (1.0) 0.5 EBIT excluding special reporting items (1.4) (0.4) 0.4 Net profit (1.3) (1.1) 0.1 Free cash flow industrial business (1.1) 1.4 2.0 Net liquidity industrial business (period-end) 3.7 4.6 6.7 4
  5. 5. Changes in net liquidity - industrial business – in billions of € – 2.0 6.7 1.4 (0.6) 4.6 Working capital 1.9 3.7 reduction +1.6 Sales, earnings 3.1 (1.1) Working capital and other reduction +2.5 cash flow Sales, earnings impact -0.2 and other Taxes leveraged cash flow leases +0.6 impact -1.1 Working capital reduction +1.3 Sales, earnings and other cash flow impact -2.4 Net liquidity Free cash Capital Net liquidity Free cash Dividend Net liquidity Free cash Net liquidity industrial flow increase industrial flow payment industrial flow industrial 12/31/2008 industrial 3/31/2009 industrial 6/30/2009 industrial 9/30/2009 business business business 5
  6. 6. Mercedes-Benz Cars Turnaround achieved, back to positive figures in Q3 2009 – EBIT in millions of € – 1,000 500 355 112 0 -500 (359) (340) -1,000 (1,123) -1,500 Q3 Q4 Q1 Q2 Q3 2008 2009 6
  7. 7. Mercedes-Benz Cars Model mix improved by launch of new E-Class and new-generation S-Class – Group sales in thousands of units* – 400 351 350 315 314 300 284 286 271 250 230 200 smart M-/R-/G-/GL-/GLK-Class 150 A-/B-Class C-Class 100 E-Class S-Class 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 *Excluding Mitsubishi vehicles produced and/or sold in South Africa 7
  8. 8. Mercedes-Benz Cars Product highlights E-Class station wagon Mercedes-Benz SLS AMG B-Class F-CELL New-generation S-Class 8
  9. 9. Daimler Trucks Weak demand and repositioning in NAFTA and Asia impact earnings, but low point has been passed in Q2 – EBIT in millions of € – 600 510 400 200 86 0 -200 (142) (127) -400 -600 (508) Q3 Q4 Q1 Q2 Q3 2008 2009 9
  10. 10. Daimler Trucks Incoming orders show signs of recovery in the truck business – Incoming orders in thousands of units – 140 122 120 112 102 100 80 73 75 60 56 40 Trucks Asia 40 Trucks NAFTA 20 Trucks EU/LA 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 10
  11. 11. Daimler Trucks Product highlights Mercedes-Benz Actros Safety Truck Freightliner Business Class M2 112 NG Freightliner Cascadia BlueTec Mitsubishi Fuso Canter Eco Hybrid 11
  12. 12. Mercedes-Benz Vans Break-even achieved through countermeasures and slight market recovery – EBIT in millions of € – 300 212 200 158 100 1 0 (10) -100 (91) -200 Q3 Q4 Q1 Q2 Q3 2008 2009 12
  13. 13. Mercedes-Benz Vans Product highlights Mercedes-Benz Sprinter BlueEFFICIENCY 13
  14. 14. Daimler Buses Daimler Buses maintain profitability despite lower unit sales in major markets – EBIT in millions of € – 120 100 92 80 69 65 60 49 40 23 20 0 Q3 Q4 Q1 Q2 Q3 2008 2009 14
  15. 15. Daimler Buses Product highlights Mercedes-Benz Citaro LÜ Setra TopClass 400 Orion VII Diesel-Electric Hybrid Mercedes-Benz Citaro FuelCELL-Hybrid 15
  16. 16. Daimler Financial Services Financial Services portfolio decreases after its peak at the end of September 2008 – Contract volume in billions of € – 70 65 63.9 63.4 62.0 60.4 60.3 60 58.3 58.7 55 50 45 40 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 16
  17. 17. Daimler Financial Services Financial Services affected by higher cost of risk – EBIT in millions of € – 250 200 173 153 150 101 100 79 50 0 -50 -100 -150 -200 (167) Q3 Q4 Q1 Q2 Q3 2008 2009 17
  18. 18. Further improvement in Group EBIT from ongoing business – in billions of € – Q1 2009 Q2 2009 Q3 2009 EBIT Daimler Group (as reported) (1.4) (1.0) 0.5 EBIT (excluding special reporting items) - Group (1.4) (0.4) 0.4 - Mercedes-Benz Cars (1.1) (0.3) 0.4 - Daimler Trucks (0.1) (0.3) (0.1) - Mercedes-Benz Vans (0.1) (0.0) 0.0 - Daimler Buses 0.1 0.0 0.0 - Daimler Financial Services (0.2) 0.1 0.1 18
  19. 19. Daimler approaches short, medium & long term need for action Topics On-going Daimler Excellence Process • Brand management Shape and invest into • Green technology 3 strategic key areas • Product portfolio • BRIC • Capacity optimization Drive structural • Efficiency programs 2 competitiveness • Cooperations Manage • Cash flow measures 1 the crisis • Labor cost measures • Funding short medium long term 19
  20. 20. Assumptions for automotive markets in 2009 Car markets • Worldwide market expected to contract by approximately 10% • China will be the only major market with increased volume Truck markets • Continued depressed demand for medium- and heavy-duty trucks globally • Western Europe -40% to -50% • NAFTA -30% to -40% • Japan -45% to -55% • Brazilian market shows first signs of recovery Van markets • Only slight improvement expected for the rest of the year Bus markets • City bus market expected to be stable in 2009 • Ongoing difficult market for coaches and chassis 20
  21. 21. Outlook 2009 for Daimler unit sales Mercedes-Benz Cars • Q4 2009 unit sales expected to be above Q3 due to the new E-Class station wagon and full availability of the E-Class sedan Daimler Trucks • Q4 2009 unit sales expected to stay at the low level of Q3 Mercedes-Benz Vans • Q4 2009 unit sales expected to increase slightly compared to the previous quarters Daimler Buses • Q4 2009 unit sales expected to increase mainly due to higher deliveries in connection with major orders 21
  22. 22. Outlook 2009 for EBIT Mercedes-Benz Cars • Q4 2009 EBIT expected to show a moderate improvement compared to Q3 • Results from ongoing business should benefit from higher unit sales and efficiency improvements Daimler Trucks • Weak demand in most important markets and less favorable regional mix will lead to lower earnings from ongoing business in Q4 • Business repositioning will lead to charges also in Q4 Mercedes-Benz Vans • The division will break even also in Q4 2009 Daimler Buses • Solid Q4 2009 EBIT expected Daimler Financial Services • Continuing positive earnings expected for Q4 2009 Daimler Group • The Group expects to achieve a positive EBIT from ongoing business in Q4 2009 • However, the Group is monitoring dealer and supplier risks which could impact Q4 earnings 22
  23. 23. Conference Call Q3 and January-September 2009 Results Questions & Answers October 27, 2009 Date (year-month-day) 23
  24. 24. Group EBIT in Q3 2009 – in millions of € – 913 (1,557) 648 Reassessment 403 (72) 105 470 of residual values 449 Chrysler 399 30 Cars (160) Cars 76 Cars (122) Trucks (1,066) Trucks (5) Trucks 437 Vans (266) Buses (34) Buses (65) Actual Special Volume/ Foreign Other Financial Others Actual Q3 2008 reporting Structure/ exchange cost Services Q3 2009 items Net pricing rates changes 24
  25. 25. Mercedes-Benz Cars Positive effect from full availability of new E-Class and more favorable sales structure – in millions of € – + 243 355 - Full availability of new E-Class sedan and coupe - More favorable sales structure - Countermeasures 112 - Reassessment of residual values in Q3 2008 - Lower unit sales EBIT EBIT Q3 2008 Q3 2009 25
  26. 26. Daimler Trucks Weak demand for trucks affected EBIT – in millions of € – - 637 510 - Countermeasures - Adjustment of provisions for the repositioning of Daimler Trucks North America - Lower unit sales - Charges from the realignment of MFTBC (127) EBIT EBIT Q3 2008 Q3 2009 26
  27. 27. Mercedes-Benz Vans Break-even achieved due to countermeasures despite significant market decline – in millions of € – - 211 212 - Countermeasures - Significantly lower unit sales in all major markets 1 EBIT EBIT Q3 2008 Q3 2009 27
  28. 28. Daimler Buses Decrease in EBIT due to lower sales volume in major markets – in millions of € – - 69 92 - Countermeasures - Decrease in unit sales and less favorable model mix 23 - Exchange-rate effects EBIT EBIT Q3 2008 Q3 2009 28
  29. 29. Daimler Financial Services Financial Services affected by higher cost of risk – in millions of € – - 72 173 - Countermeasures 101 - Higher cost of risk - Cost of liquidity measures EBIT EBIT Q3 2008 Q3 2009 29
  30. 30. Countermeasures to stabilize earnings and cash flow Target Achieved by FY 2009 09/09 Total EBIT impact: €4 bn €3.5 bn Safeguard positive net pricing Earlier market launch of new E-Class sedan in the U.S. Net proceeds 20% 13% Optimization of pricing potential of extras/packages and fuel-efficiency features Short-time work in production and other functions Personnel costs 40% Reduced working time and labor costs at 39% Daimler AG Achieving lower prices based on declining raw material Material costs 15% market prices 12% Accelerated implementation of module strategy Cutting expenses and reducing spending Further overhead 25% Prioritization of investment projects 36% Optimization of non-productive materials 30
  31. 31. Special items affecting EBIT – in millions of € – 3rd quarter January to Sept. 2008 2009 2008 2009 Mercedes-Benz Cars Reassessment of residual values (449) – (449) – Daimler Trucks Realignment of Mitsubishi Fuso Truck and Bus – (13) – (217) Corporation Repositioning of Daimler Trucks North America – 10 – (48) Reconciliation Sale of real estate – – 449 – Transfer of shares in EADS (7) – 130 – Equity-method result Chrysler (351) – (1,047) – Other gains/(expenses) related to Chrysler – 48 (168) (299) New management model (61) – (169) – 31
  32. 32. Key balance-sheet figures – in billions of € – June 30, 2009 Sept. 30, 2009 Daimler Group Equity ratio 23.3% 24.2% Gross liquidity 18.8 17.6 Industrial business Equity ratio 39.8% 40.6% Net liquidity 4.6 6.7 32
  33. 33. Liquidity – in millions of € – June 30, 2009 September 30, 2009 Group IB FS Group IB FS Cash and cash 13,928 9,432 4,496 11,498 8,688 2,810 equivalents Marketable securities 4,888 3,954 934 6,143 4,559 1,584 and term deposits Gross liquidity 18,816 13,386 5,430 17,641 13,247 4,394 Financing liabilities (62,496) (8,814) (53,682) (58,560) (6,533) (52,027) (nominal) Net liquidity (43,680) 4,572 (48,252) (40,919) 6,714 (47,633) 33
  34. 34. Financing liabilities (nominal) thereof maturing in Sept. 30, Q4 Q1 Q2 Q3 – in billions of € – 2009 2009 2010 2010 2010 Bonds 29.6 1.4 2.9 3.5 0.2 Bank loans 14.2 3.2 1.0 1.2 0.9 ABS 0.7 0.1 0.1 0.1 0.1 Commercial paper 0.4 0.4 0.0 0.0 0.0 Account deposits 12.6 5.2 * 3.7 0.6 0.3 Other 1.0 0.1 0.1 0.1 0.1 Total 58.6 9.3 7.8 5.3 1.6 * Thereof €4.5 bn daily cash accounts 34
  35. 35. Funding status of pension and healthcare benefits – in billions of € – June 30, 2009 Sept. 30, 2009 Pension benefits Benefit obligations (15.2) (15.3) Plan assets 9.9 10.4 Funded status (5.3) (4.9) Healthcare benefits Benefit obligations (1.0) (1.0) Plan assets 0.0 0.0 Reimbursement Medicare Act 0.1 0.1 Funded status (0.9) (0.9) 35
  36. 36. Research & development costs Q2 2009 Q3 2009 – in millions of € – – in millions of € – 1,160 358 1,055 327 160 962 158 886 Total R&D of which Amorti- Recognized in Total R&D of which Amorti- Recognized in capitalized zation P&L capitalized zation P&L 36
  37. 37. Daimler Financial Services Economic crisis is reflected by higher net credit losses* 1.2% 1.0% 0.82%** 0.8% 0.69% 0.68% 0.6% 0.50% 0.53% 0.43% 0.39% 0.4% 0.2% 0.0% 2003 2004 2005 2006 2007 2008 YTD 2009 * percent of global automotive portfolio, subject to credit risk ** annualized rate 37
  38. 38. Disclaimer This document contains forward-looking statements that reflect our current views about future events. The words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should” and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including a lack of or a considerable delay in improvement or a further deterioration of global economic conditions; a continuation or worsening of the tense situation in the credit and financial markets, which could result in ongoing high borrowing costs or limit our funding flexibility; changes in currency exchange rates and interest rates; the introduction of competing, fuel-efficient products and the possible lack of acceptance of our products or services, which may limit our ability to adequately utilize our production capacities or raise prices; price increases in fuel, raw materials and precious metals; disruption of production due to shortages of materials, labor strikes, or supplier insolvencies; a further decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization programs at all of our segments, including the repositioning of our truck activities in the NAFTA region and in Asia; the business outlook of companies in which we hold an equity interest, most notably EADS; changes in laws, regulations and government policies, particularly those relating to vehicle emissions, fuel economy and safety; the resolution of pending governmental investigations and the outcome of pending or threatened future legal proceedings; and other risks and uncertainties, some of which we describe under the heading “Risk Report” in Daimler’s most recent Annual Report and under the headings “Risk Factors” and “Legal Proceedings” in Daimler’s most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission. If any of these risks and uncertainties materialize, or if the assumptions underlying any of our forward- looking statements prove incorrect, then our 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. Any forward-looking statement speaks only as of the date on which it is made. 38
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