Daimler Targets Group EBIT of Euro 6 Billion in Full-Year 2010

STUTTGART, Germany, July 27,2010; Recovering automotive markets around the world, strong growth in major car and commercial-vehicle markets, an attractive product portfolio and the implementation of efficiency improvements had a very positive effect on Daimler AG (stock-exchange symbol DAI) in the second quarter of 2010. As already announced on July 16, Group EBIT amounted to euro 2,104 million (Q2 2009: minus euro 1,005 million). "Our strategy is paying off: We have a very dynamic development of unit sales and revenue in all divisions. After what was already a very good first quarter, we achieved excellent results in the second quarter," stated Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars. Mercedes-Benz Cars and Daimler Trucks in particular posted significant improvements in their operating profit. Zetsche remains confident for the full year: "We anticipate significant revenue growth in 2010 and we are targeting EBIT from the ongoing business of euro 6 billion." The positive development of EBIT in the second quarter led to a significant improvement in net profit to euro 1,312 million (Q2 2009: net loss of euro 1,062 million). Earnings per share amounted to euro 1.18 (Q2 2009: loss per share of euro 0.99). Unit sales up by 27% in the second quarter In the second quarter of 2010, Daimler sold 496,500 cars and commercial vehicles worldwide, surpassing the prior-year volume by 27%. The Daimler Group's second-quarter revenue increased significantly from euro 19.6 billion in 2009 to euro 25.1 billion this year (+28%); adjusted for exchange-rate effects, revenue grew by 21%. The free cash flow of the industrial business was positive and increased substantially by euro 1.1 billion to euro 2.5 billion. At the end of the second quarter of 2010, Daimler employed 257,658 people worldwide (June 30, 2009: 257,427). Of that total, 163,507 were employed in Germany (June 30, 2009: 162,818). Due to the current order situation and the revival of demand around the world, short-time work was terminated as of June 30, 2010, with just a few small exceptions. Details of the divisions in the second quarter The Mercedes-Benz Cars division increased its unit sales by 19% to 342,500 vehicles. For the Mercedes-Benz brand, this was the strongest second quarter ever; its unit sales rose by 24% to 314,400 vehicles. For lifecycle reasons, sales of the smart fortwo decreased to 27,100 units (Q2 2009: 33,500). Mercedes-Benz Cars' revenue increased by 33% to euro 14.0 billion. EBIT rose by euro 1.7 billion to euro 1,376 million. The division's return on sales was 9.8% (Q2 2009: minus 3.2%). The very positive earnings trend was primarily the result of increased vehicle shipments, especially in China, as well as an improved product mix. The substantial improvement in profitability was also caused by better pricing, efficiency enhancements and slightly positive exchange-rate effects. Daimler Trucks increased its unit sales by 55% to 83,800 vehicles. All of the division's major markets contributed to this positive development, in particular Indonesia (+130%), the United States (+44%), Brazil (+50%) and Europe (+39%). Revenue of euro 5.9 billion was also well above the prior-year level (Q2 2009: euro 4.2 billion). The division also achieved a significant improvement in its operating performance, with EBIT of euro 300 million (Q2 2009: minus euro 508 million) and a return on sales of 5.1% (Q2 2009: minus 12.0%). The key factor for the earnings trend was the good development of unit sales. There were other positive effects from the measures taken to reduce costs, in particular from the repositioning of the subsidiaries Daimler Trucks North America and Mitsubishi Fuso Truck and Bus Corporation. The ongoing implementation of those programs reduced second-quarter EBIT by euro 14 million (Q2 2009: euro 217 million). Unit sales by Mercedes-Benz Vans increased by 42% to 59,400 vehicles. Second-quarter revenue of euro 2.0 billion was also well above last year's level (Q2 2009: euro 1.5 billion). EBIT amounted to euro 127 million (Q2 2009: minus euro 10 million) and the return on sales improved to 6.4% (Q2 2009: minus 0.7%). The division's earnings improvement was primarily the result of a strong increase in unit sales compared to the second quarter of last year. Negative exchange-rate effects were more than offset by sustained efficiency gains. Daimler Buses sold a total of 10,800 buses and chassis worldwide (Q2 2009: 8,300). Revenue of euro 1.2 billion was higher than in the prior-year quarter (euro 1.1 billion). EBIT also increased, to euro 79 million compared to euro 49 million in the second quarter of last year. The return on sales was 6.6% (Q2 2009: 4.4%). The main factors behind this earnings development were positive exchange-rate effects and higher revenue resulting from increased chassis shipments in Latin America. The contract volume of Daimler Financial Services increased to euro 63.8 billion at the end of the second quarter, which is 9% higher than at the end of 2009. Adjusted for exchange-rate effects, the division's portfolio remained stable. New business amounted to euro 7.9 billion (Q2 2009: euro 6.5 billion). EBIT improved substantially to euro 171 million (Q2 2009: euro 79 million). The earnings increase was mainly caused by lower risk expenses and higher interest margins. In addition, gains were realized in connection with the sale of non-automotive assets (euro 26 million). Expenses of euro 78 million were incurred for the repositioning of business activities in Germany. The reconciliation of the divisions' EBIT to Group EBIT reflects Daimler's proportionate share in the results of its equity-method investment in EADS, other gains or losses at the corporate level, and the effects on earnings of eliminating internal transactions between the divisions. The special items that affected Daimler's EBIT in the second quarter of 2010 are shown in the table on page 9. Source : http://www.theautochannel.com    (7/27/2010)