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Q3 Earning report of Daimler AG
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. 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
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. 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. 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. 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
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. 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. 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. 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
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. 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. 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. 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. 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. 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. 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. Conference Call
Q3 and January-September 2009 Results
Questions & Answers
October 27, 2009
Date (year-month-day) 23
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. 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. 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. 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. 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. 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. 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. 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. 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. 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
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. 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. 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. 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