Daimler AG / Quarter Results
28.04.2009
Release of a Adhoc News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
* Net loss of EUR1,286 million (Q1 2008: net profit of EUR1,332 million)
* Revenue significantly below prior-year level at EUR18.7 billion
* Decreases in unit sales and revenue expected for full-year 2009
* Implementation of measures with the aim of saving EUR4 billion in 2009
* Gradual improvement in operating profitability expected during 2009,
but renewed significant operating loss in second quarter
* Mercedes-Benz Cars expects positive earnings again in second half of
this year
Stuttgart - The global financial and economic crisis and the resulting
difficult automotive markets placed a significant burden on the earnings of
the Daimler Group (stock-exchange abbreviation DAI) in the first quarter of
2009.
Daimler posted EBIT of minus EUR1,426 million for the first quarter of 2009
(Q1 2008: plus EUR1,976 million).
The significant decline in earnings primarily reflects the sharp drops in
unit sales at Mercedes-Benz Cars, Daimler Trucks and Mercedes-Benz Vans in
the first quarter of 2009. The measures already taken mitigated the decline
in earnings, but were far from sufficient to compensate for the effect of
th decrease in
Group revenue related to lower unit sales. Increased cost of risk at
Daimler Financial Services led to a fall in that division's operating
results.
Earnings in the first quarter of 2008 were positively affected by gains
realized on the sale of real estate properties at Potsdamer Platz (EUR449
million) and gains connected with the transfer of EADS shares (EUR102
million). There was an opposing effect from charges relating to Daimler's
equity interest in Chrysler (EUR491 million).
The Group posted a net loss for the period of EUR1,286 million (Q1 2008:
net profit of EUR1,332 million); earnings per share amounted to minus
EUR1.40 (Q1 2008: plus EUR1.29).
Unit sales down by 34% in the first quarter
In the first quarter of 2009, Daimler sold 332,300 cars and commercial
vehicles worldwide, which was 34% lower than in the same period of last
year.
The Daimler Group's first-quarter revenue decreased significantly from
EUR24.0 billion to EUR18.7 billion in 2009. Adjusted for exchange-rate
effects, revenue fell by 25%.
At the end of the first quarter of 2009, Daimler employed 263,819 people
worldwide (end of Q1 2008: 273,902). Of that total, 164,983 people were
employed in Germany (end of Q1 2008: 166,661).
The free cash flow of the industrial business was negative and fell
significantly by EUR2.2 billion to minus EUR1.1 billion.
The main reason for the decrease in the free cash flow was the development
of the divisions' earnings. In addition, the free cash flow of the
prior-year period included proceeds from the sale of real estate at
Potsdamer Platz and from the transfer of EADS shares totaling EUR1.4
billion. However, there were positive effects on the free cash flow of the
industrial business from the development of inventories.
Details of the divisions in the first quarter of 2009
Due to the ongoing contraction of worldwide automobile markets
and the model changeover of the high-volume E-Class, Mercedes-Benz Cars
sold 231,200 vehicles in the first quarter of 2009 (Q1 2008: 318,300).
First-quarter revenue decreased by 27% to EUR9.1 billion.
The division posted EBIT of minus EUR1,123 million in the first quarter,
which was significantly below the result of the prior-year quarter (plus
EUR1,152 million).
The decline in earnings is mainly a result of the significant decrease in
demand for automobiles and the resulting drop in unit sales. The
lifecycle-related replacement of the E-Class also had a negative impact on
sales. Earnings were additionally reduced by a shift in demand towards
smaller models and ongoing price pressure in automobile markets. The
decline in earnings was partially offset by the timely initiation of
cost-adjusting actions such as the introduction of short-time work at
plants in Germany.
Daimler Trucks sold 65,400 vehicles worldwide in the first quarter of 2009
(Q1 2008: 107,700). The significant decrease was caused by the worldwide
recession. Revenue decreased from EUR6.3 billion to EUR4.9 billion.
Due to the significant decline in unit sales, the division recorded EBIT of
minus EUR142 million, which was significantly below the EBIT of plus EUR403
million posted in the prior-year quarter. There was an additional negative
impact on EBIT in Q1 2009 of EUR45 million from the measures initiated in
2008 for the repositioning of Daimler Trucks North America. Positive
effects resulted from cost adjustments and further efficiency improvements.
The Trucks Europe/Latin America unit (Mercedes-Benz) sold 23,100 vehicles
in the first quarter (Q1 2008: 33,800), a decrease compared with the
prior-year quarter, as expected. Sales of 17,200 units by Trucks NAFTA
(Freightliner, Sterling, Western Star and Thomas Built Buses) were also
lower than in the prior-year period (Q1 2008: 27,500). Trucks Asia
(Mitsubishi Fuso) sold 25,100 vehicles in the first quarter (Q1 2008:
46,500).
The Daimler Group adjusted its segment reporting at the beginning of 2009.
The business activities of Mercedes-Benz Vans and Daimler Buses, which were
previously reported under Vans, Buses, Other, are now
presented separately.
Due to a severe market slump, Mercedes-Benz Vans' unit sales decreased to
28,800 vehicles in the first quarter (Q1 2008: 68,600). Revenue of EUR1.3
billion was also well below the figure for the prior-year period.
The Mercedes-Benz Vans division posted EBIT of minus EUR91 million (Q1
2008: plus EUR186 million). Positive effects resulted from efficiency
increases and the development of some currencies.
Despite the difficult market situation, Mercedes-Benz Vans continued to
defend its market leadership for medium-sized and large vans in Western
Europe, taking a market share of 16.7% (Q1 2008: 16.3%).
Daimler Buses sold 6,800 buses and chassis worldwide in the first quarter
of this year (Q1 2008: 9,200). As the decline in unit sales is almost
solely accounted for by lower volumes of chassis in Latin America, revenue
decreased at the much lower rate of 2% to EUR904 million. The division
achieved EBIT of EUR65 million (Q1 2008: EUR75 million).
At Daimler Financial Services, new business decreased by 12% compared with
the prior-year quarter to EUR5.9 billion. Contract volume amounted to
EUR62.0 billion at the end of the first quarter, which was 2% lower than at
the end of 2008.
The division posted first-quarter EBIT of minus EUR167 million (Q1 2008:
plus EUR168 million). The decline in earnings was primarily due to charges
resulting from further increases in risk provisions. An additional factor
is that the EBIT for the period includes losses from the sale of parts of
the non-automotive leasing portfolio. Furthermore, expansion of
Mercedes-Benz Bank's direct banking business entailed expenses, which had a
negative impact on first-quarter earnings.
The other business activities - in particular the equity holdings in
Chrysler, EADS and Tognum, which were previously allocated to Vans, Buses,
Other - have been included in 'Reconciliation' since the beginning of 2009.
In the first quarter of 2009, Daimler's share in the net profit of EADS
amounted to EUR83 million (Q1 2008: EUR22 million). The equity-method
inclusion of the 19.9% equity interest in Chrysler did not lead to any
further charges on earnings. In connection with the legal transfer of
Chrysler's international sales activities to Chrysler LLC and due to the
valuation of Chrysler-related assets, the Group recorded a total gain of
EUR40 million in the first quarter of 2009.
Outlook
Based on the divisions' planning, Daimler expects its total unit sales to
decrease significantly in the year 2009 (2008: 2.1 million vehicles).
Mercedes-Benz Cars has an up-to-date and competitive product range.
Mercedes-Benz Cars will not be able to avoid the expected weakness of major
sales markets and in particular of its main market segments. Overall, unit
sales in 2009 will therefore be lower than in the prior year. Lower volumes
are anticipated above all in the markets of the United States, Western
Europe and Japan, which have been particularly hard hit by the economic and
financial crisis. Unit sales should be partially stabilized by growth in
the emerging markets, however.
Mercedes-Benz Cars assumes it will at least maintain its market shares and
that the bottom of the EBIT curve was reached in the first quarter. Due in
particular to the cost-reducing measures and the launch of the new E-Class
in Europe and the US launch planned for June 2009, there should be a
gradual improvement in profitability over the next three quarters and
positive earnings in the second half of the year.
As a result of the global economic crisis, Daimler Trucks assumes that unit
sales will fall significantly in all its major markets in full-year 2009.
The division expects to maintain its shares of core markets, however. The
full impact of the significant drop in demand in all markets since the
beginning of this year will be felt as of the second quarter. Further
burdens on earnings are therefore anticipated, especially in the second
quarter.
Due to stagnating demand and the ongoing recession in major economies,
Mercedes-Benz Vans does not expect an improvement in unit sales in the
coming months. In line with the significant fall in demand in all markets,
further burdens on earnings are anticipated, particularly in the second
quarter.
Daimler Buses anticipates lower unit sales in 2009 than in the record year
2008. Nonetheless, the unit expects to achieve positive earnings, though
substantially lower than in 2008.
Daimler Financial Services anticipates rising credit defaults and higher
refinancing expenses in full-year 2009. The lowest point for earnings
should have been reached in the first quarter, however. Contract volume is
expected to decrease compared with 2008.
The Daimler Group's total revenue is likely to decrease significantly in
full-year 2009 (2008: EUR95.9 billion).
In order to alleviate the impact of the significant decline in unit sales
and revenue caused by the global financial and economic crisis, at short
notice Daimler has initiated measures designed to adjust costs and avoid
expenditure across all divisions and at the Group's headquarters. As well
as actions to reduce labor costs, this includes the reduction of fixed
costs and administrative expenses and further streamlining of the Group's
organizational structures. In addition, projects are being postponed if
they are not directly relevant to competitiveness.
The measures initiated supplement the existing efficiency-enhancing
programs and will be implemented at the Group in the coming months. As a
result, Daimler expects to achieve cost reductions or to avoid cost
increases in a total amount of EUR4 billion. Based on these measures, which
will have their full impact in the second half of the year, and due to the
launch of the new E-Class, the Daimler Group anticipates a gradual
improvement in operating profitability as the year progresses. Earnings in
the second quarter are expected to be significantly negative once again,
however.
Further information on Daimler is available on the internet:
www.media.daimler.com
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
improvement or a further deterioration of global economic conditions; a
continuation or worsening of the turmoil 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; 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.
About Daimler
Daimler AG, Stuttgart, with its businesses Mercedes-Benz Cars, Daimler
Trucks, Daimler Financial Services, Mercedes-Benz Vans and Daimler Buses,
is a globally leading producer of premium passenger cars and the global
market leader of heavy- and medium-duty trucks as well as buses. The
Daimler Financial Services division has a broad offering of financial
services, including vehicle financing, leasing, insurance and fleet
management. Daimler sells its products in nearly all the countries of the
world and has production facilities on five continents. The company's
founders, Gottlieb Daimler and Carl Benz, continued to make automotive
history following their invention of the automobile in 1886. As an
automotive pioneer, Daimler and its employees willingly accept an
obligation to act responsibly towards society and the environment and to
shape the future of safe and sustainable mobility with groundbreaking
technologies and high-quality products. The current brand portfolio
includes the world's most valuable automobile brand, Mercedes-Benz, as well
as smart, AMG, Maybach, Freightliner, Western Star, Mitsubishi Fuso, Setra,
Orion and Thomas Built Buses. The company is listed on the stock exchanges
in Frankfurt, New York and Stuttgart (stock exchange abbreviation DAI). In
2008, the Group sold 2.1 million vehicles and employed a workforce of over
270,000 people; revenue totaled EUR95.9 billion and EBIT amounted to EUR2.7
billion. Daimler is an automotive Group with a commitment to excellence,
and aims to achieve sustainable growth and industry-leading profitability.
DGAP 28.04.2009
---------------------------------------------------------------------------
Language: English
Issuer: Daimler AG
Mercedesstraße 137
70327 Stuttgart
Deutschland
Phone: +49 (0)711-17 413 61
Fax: +49 (0)711-17 413 72
E-mail: ir.dai@daimler.com
Internet: http://www.daimler.com
ISIN: DE0007100000
WKN: 710000
Indices: DAX, EURO STOXX 50
Listed: Regulierter Markt in Frankfurt (Prime Standard), Stuttgart;
Freiverkehr in Berlin, Hannover, München, Hamburg,
Düsseldorf; Foreign Exchange(s) NYSE
End of News DGAP News-Service
---------------------------------------------------------------------------
DGAP-Adhoc: Daimler AG: Daimler posts EBIT of minus EUR1,426 million in first quarter of 2009
| Source: EQS Group AG