Mercedes-Benz AG — Call Transcript 2008

Apr 29, 2008

Conference Call Q1 2008 Results

Bodo Uebber

Member of the Board of Management Finance & Controlling and Daimler Financial Services

April 29, 2008

Summary Q1 2008

• Unit sales up 9%, marking new record levels at Mercedes-Benz Cars, Mercedes-Benz Vans and Daimler Buses
• Revenue increased slightly to €23.5 billion; adjusted for exchange-rate effects and changes in the consolidated Group, the increase was 4%

EBIT was €2.0 billion

• Increased EBIT at Mercedes-Benz Cars, offsetting lower earnings at Daimler Trucks and Daimler Financial Services
• Gain on sale of Potsdamer Platz of €0.4 billion
• Gain on transfer of EADS shares of €0.1 billion in Q1 2008 and €1.6 billion in Q1 2007
• Charges related to Chrysler of €0.5 billion, without any cash impact
• Net profit decreased from €2 billion to €1.3 billion
• Net liquidity of Industrial Business at €11.7 billion after share buyback of €2.7 billion during Q1 2008

Key financials

i b i l l i f € n o n s o – –	Q 1 2 0 0 7	Q 1 2 0 0 8
E B I T	3 3	2 0
N f i t t e p r o	2 0	3 1.
i i E h ( € ) a r n n g s p e r s a r e n	1. 8 9	1. 2 9
h f l i d i l b i F t r e e c a s o n s r a s n e s s w u u	2 9	1. 0
i i i i i i ( i ) N l d d l b d d t t t t e q u y n u s r a u s n e s s a p e r o e n	1 2 9	1 1. 7

Higher unit sales and revenue mainly reflect strong demand for the new C-Class and smart fortwo

Increase in EBIT results from higher unit sales and further efficiency improvements

Mercedes-Benz Cars

New Products

Lower unit sales reflect weak demand in the US and supplier bottlenecks in Germany

Daimler Trucks

Lower EBIT primarily reflects tough market environment in the US

Daimler Trucks

New Products

Growth at Mercedes-Benz Vans reflects continued strong demand for all models

Positive market environment in Latin America and high demand in Europe pushed unit sales

Vans, Buses, Other

Product highlights

Vans, Buses, Other

Status of Chrysler separation and financial impact

• Financial Services successfully separated
• International Chrysler sales organization separated and prepared for transfer
• Negative impact on EBIT in Q1 2008 of €0.5 billion without any cash impact
• Chrysler at-equity result of €-340 million, mainly reflecting developments in Q4/2007
  • ongoing result of €-246 million
  • special reporting items (mainly restructuring) of €-94 million

Impairment of rights related to residual values of Chrysler vehicles (€-151 million)

• Results are not indicative for US GAAP results to be reported by Chrysler Holding LLC due to significant valuation differences between US GAAP and IFRS
• Book value as of March 31, 2008: €547 million
• Guaranties provided by Daimler were reduced by \$0.3 to \$0.7 billion, the related collateral provided by Chrysler decreased by \$0.1 to \$0.4 billion

Daimler Financial Services

• Higher contract volume Set-up costs for a separate financial services organization in the NAFTA region Higher cost of risk Daimler Financial Services affected by set-up costs and higher cost of risk – in millions of € –214168 46

EBITQ1 2007

EBIT

Q1 2008

Key balance-sheet and financial figures

i b i l l i f € n o n s o – –	D 3 2 0 0 1 7 e c ,	M 3 2 0 0 8 1 a r. ,
D i l G a m e r r o u p
) 1 E i i t t q r a o u y	% 2 6 8	% 2 6 9
G l i i d i t r o s s q u y	1 7 1	1 1 7
i i I d l B t n u s r a u s n e s s
) 1 E i i t t q u y r a o	3 % 4 5	9 % 4 4
i i i N l d t t e q u y	1 2 9	1 1 7
f ( ) F h l J M h t r e e c a s o a n a r o a r c w u y	2 9	1 0
) Ex lu d ing d iv i d d 1 t c e n p ay m e n

Optimization of the capital structure

49.8 million shares have been bought back in Q1 2008, equivalent to an amount of €2.7 billion

Since August 2007, a total volume of 99.8 million shares has been bought back, corresponding to an amount of €6.2 billion

All shares were canceled

• Annual Meeting on April 9 approved a new share buyback program
• Optimization of capital structure will be continued, depending on the Group's cash flows and net liquidity as well as developments in the capital markets

Sales outlook FY 2008

Mercedes-Benz Cars

Unit sales are expected to surpass the record levels of 2007

Daimler Trucks

Rising unit sales are expected for FY 2008, reflecting positive developments in some Asian markets and Europe

Mercedes-Benz Vans

New sales record is expected for FY 2008 as a result of ongoing high demand for Sprinter vans and positive sales trend of Vito/Viano vans

Daimler Buses

Buses unit expects to match the high level of the prior year, reflecting a continuation of strong demand

Earnings outlook

Mercedes-Benz Carsexpects to achieve a further increase in EBIT in 2008

Daimler Trucks assumes earnings in FY 2008 to be higher than in the prior year

Daimler Financial Services assumes a return on equity of at least14% in 2008

For 2008, the Daimler Group expects EBIT from its ongoing business (excluding Chrysler) well-above the prior-year level; earnings forecasts confirmed for the divisions

Conference Call Q1 2008 Results

Questions & Answers

April 29, 2008

Special items affecting EBIT

f i i l l i € n m o n s o – –	Q 1 t t s a r e r u
	2 0 0 7	2 0 0 8
M d B C e r c e e s- e n a r s z
F i i l f l i t n a n c a s p p o r o r s p p e r s u u	( 8 2 )	–
O V B h t a n s, u s e s, e r
S l f l ( P d P l ) t t t t a e o r e a e s a e o s a m e r a z	–	4 4 9
f f G i l i h h i E A D S t t t t a n r e a n g o e r a n s e r o s a r e s n	1, 5 6 3	0 2 1
R i C h l t t t e s r c r n g p r o g r a m a r s e r u u y	–	( 9 ) 4
I i f i h d d d i d l l t t t m p a r m e n o r g s u e o r e u c e r e s u a v a u e s f C i h l h l o r y s e r v e c e s	–	( 1 5 1 )
R i E A D S t t t e s r u c u r n g p r o g r a m a	( ) 1 1 4	–
R i l i i t e c o n c a o n
N d l t e m a n a e m e n m o e w g	( ) 5 1	( ) 4 5

Liquidity

i i l l i f € n m o n s o – –	D 3 1 2 0 0 7 e c ,		h M 3 1 2 0 0 8 a r c ,
	G r o u p	I B	F S	G r o u p	I B	S F
C h d h i l t a s a n c a s e q a e n s u v	1 6 3 1 5,	1 4, 8 9 4	3 7 7	1 0, 2 2 8	9, 4 1 5	8 1 3
M k b l i i d t t a r e a e s e c u r e s a n d i t t e r m e p o s s	2 1, 4 4	2 6 1, 7	8 1 4	9 0 1, 4	3 8 6 1,	0 1 4
G l i i d i t r o s s q u y	0 1 7, 5 5	0 1 6 1 7 ,	8 8 5	8 1 1, 7 1	0 8 0 1 1 ,	9 1 7
i i i i i i F l l b l t t n a n c a a e s n e ,	( 9 ) 5 4 6 7 ,	( 0 9 ) 5 1 ,	( 9 9 8 ) 4 4 ,	( 0 9 3 ) 5 7 ,	( 8 9 ) 1, 6	( 9 0 ) 4 4 1 ,
M k l i d t t a r e v a u a o n a n f h d c u r r e n c y e g e s o r f i i l i b i l i i t n a n c n g a e s	1, 7 6 1	1, 7 6 1	0	2, 7 5 1	2, 7 5 1	0
l i i d i N t t e q u y	( 3 ) 6 1 5 1 ,	2, 9 2 1 1	( 9 0 3 ) 4 6 ,	( 3 8 ) 6 4 6 ,	1 1, 6 5 6	( 8 2 ) 4 1 4 ,

Funding status of pension and healthcare benefits

– continuing operations –

f i b i l l i € n o n s o – –	D 3 2 0 0 1 7 e c ,	M 3 2 0 0 8 1 a r. ,
f P i b i t e n s o n e n e s
f i i i B b l t t e n e o a o n s g	( 1 5 7 )	( ) 1 5 7
P l t a n a s s e s	1 3 8	2 1 7
d d F t t n e s a s u u	( ) 1 9	( 3 0 )
f i H l h b t t s e a c a r e e n e
B f i b l i i t t e n e o g a o n s	( ) 0 9	( ) 0 8
P l t a n a s s e s	0 1	-
i i R b M d A t t e m r s e m e n e c a r e c u	0 1	0 1
d d F t t n e s a s u u	( ) 0 7	( 0 ) 7

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 an economic downturn or slow economic growth in important economic regions, especially in Europe or North America; the effects of the subprime crisis which could result in a weaker demand for our products particularly in the U.S. but as well in the European market; changes in currency exchange rates and interest rates; the introduction of competing products and the possible lack of acceptance of our products or services; price increases in fuel, raw materials, and precious metals; disruption of production due to shortages of materials, labor strikes or supplier insolvencies; a decline in resale prices of used vehicles; the business outlook for Daimler Trucks, which may be affected if the U.S. and Japanese commercial vehicle markets experience a sustained weakness in demand for a longer period than expected; the effective implementation of cost reduction and efficiency optimization programs; the business outlook of Chrysler, in which we hold an equity interest, including its ability to successfully implement its restructuring plans; the business outlook of EADS, in which we hold an equity interest, including the financial effects of delays in and potentially lower volumes of future aircraft deliveries; 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.