Mercedes-Benz AG — Call Transcript 2009

Oct 28, 2009

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

Automotive market slump in triad markets

Sales have stabilized

Group sales in thousands of units –

Key financials

i b i l l i f € n o n s o – –	Q 2 0 0 9 1	Q 2 2 0 0 9	Q 3 2 0 0 9
R e v e n u e	1 8 7	6 1 9	9 3 1
E B I T	( ) 1 4	( ) 1 0	0 5
E B I T l d i i l i i t t e x c u n g s p e c a r e p o r n g e m s	( 1 4 )	( 0 4 )	0 4
f i N t t e p r o	( ) 1 3	( ) 1 1	0 1
F h f l i d i l b i t r e e c a s o w n u s r a u s n e s s	( ) 1 1	1 4	2 0
N l i i d i i d i l b i t t t ( i d- d ) e q u y n u s r a u s n e s s p e r o e n	3 7	6 4	6 7

Changes in net liquidity - industrial business

Turnaround achieved, back to positive figures in Q3 2009

EBIT in millions of € –

Model mix improved by launch of new E-Class and new-generation S-Class

Group sales in thousands of units *–

Product highlights

Weak demand and repositioning in NAFTA and Asia impact earnings, but low point has been passed in Q2

EBIT in millions of € –

Incoming orders show signs of recovery in the truck business

Incoming orders in thousands of units –

Product highlights

Break-even achieved through countermeasures and slight market recovery

EBIT in millions of € –

Product highlights

Daimler Buses maintain profitability despite lower unit sales in major markets

EBIT in millions of € –

Daimler Buses

Product highlights

Financial Services portfolio decreases after its peak at the end of September 2008

Contract volume in billions of € –

Financial Services affected by higher cost of risk

EBIT in millions of € –

Further improvement in Group EBIT from ongoing business

i i i f b l l € n o n s o – –	Q 1 2 0 0 9	Q 2 2 0 0 9	Q 3 2 0 0 9
E B I T D i l G ( d ) t a m e r r o u p a s r e p o r e	( ) 1 4	( 0 ) 1	0 5
i i i i E B I T ( l d l ) t t e c n s p e c a r e p o r n e m s x u g g
G r o u p -	( 1 4 )	( 0 4 )	0 4
C M d B e r c e e s- e n a r s z -	( ) 1 1	( ) 0 3	0 4
D i l T k a m e r r c s u -	( ) 0 1	( ) 0 3	( 0 ) 1
M d B V e r c e e s- e n a n s z -	( ) 0 1	( ) 0 0	0 0
D i l B a m e r u s e s -	0 1	0 0	0 0
D i l F i i l S i a m e r n a n c a e r v c e s -	( ) 0 2	0 1	0 1

Daimler approaches short, medium & long term need for action

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

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

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

Conference Call Q3 and January-September 2009 Results

Questions & Answers

Group EBIT in Q3 2009

Positive effect from full availability of new E-Class and more favorable sales structure

in millions of € –

EBITQ3 2008

Weak demand for trucks affected EBIT

Break-even achieved due to countermeasures despite significant market decline

Decrease in EBIT due to lower sales volume in major markets

Financial Services affected by higher cost of risk

EBITQ3 2008

Countermeasures to stabilize earnings and cash flow

	T t a r g e F Y 2 0 0 9		A h i d b c e v e y / 0 9 0 9
i T l E B I T t t o c a m p a :	€ b 4 n		€ 3 b 5 n
N d t e p r o c e e s	2 0 %	S f d i i i i t t a e g u a r p o s v e n e p r c n g E l i k l h f E- C l d i h U S t t a r e r m a r e a n c o n e a s s s e a n n e u w f f O i i i i i i l / k t t t t t p m z a o n o p r c n g p o e n a o e x r a s p a c a g e s d f l- f f i i f t a n e e c e n c e a r e s u y u	3 % 1
P l t e r s o n n e c o s s	4 0 %	S h i k i d i d h f i t- t t t t o r m e o r n p r o c o n a n o e r n c o n s w u u i i R d d k d l b t t t e u c e w o r n g m e a n a o r c o s s a D i l A G a m e r	3 9 %
M i l t t a e r a c o s s	1 % 5	A h i i l i b d d l i i i l t c e v n g o w e r p r c e s a s e o n e c n n g r a w m a e r a k i t m a r e p r c e s A l d i l i f d l t t t t t c c e e r a e m p e m e n a o n o m o u e s r a e g y	1 2 %
F h h d t r e r o e r e a u v	2 % 5	C i d d i d i t t n e p e n s e s a n r e c n s p e n n u g x u g g f P i i i i i j t t t t t r o r z a o n o n v e s m e n p r o e c s O i i i f d i i l t t t t p m a o n o n o n- p r o c e m a e r a s z u v	3 6 %

Special items affecting EBIT

i i l l i f € n m o n s o – –	3 d t r q u a r e r		J S t t. a n u a r y o e p
	2 0 0 8	2 0 0 9		2 0 0 9
C M d B e r c e e s- e n z a r s
f R i d l l t e a s s e s s m e n o r e s u a v a u e s	( 4 4 9 )	–	( 4 4 9 )	–
D i l T k a m e r r c s u
R l i f M i b i h i F T k d B t t e a n m e n o s s s o r c a n s g u u u u C i t o r p o r a o n	–	( ) 1 3	–	( ) 2 1 7
R i i i f D i l T k N h A i t t e p o s o n n g o a m e r r u c s o r m e r c a	–	1 0	–	( 4 8 )
R i l i i t e c o n c a o n
S l f l t t a e o r e a e s a e	–	–	4 4 9	–
f f i A S T h E D r a n s e r o s a r e s n	( ) 7	–	1 3 0	–
E i h d l C h l t t t q -m e o r e s r s e r u y u y	( ) 3 5 1	–	( ) 1, 0 4 7	–
O h i / ( ) l d C h l t t t e r g a n s e x p e n s e s r e a e o r y s e r	–	4 8	( 1 6 8 )	( 2 9 9 )
N d l t e w m a n a g e m e n m o e	( 6 ) 1	–	( 6 9 ) 1	–

Key balance-sheet figures

i i i f b l l € n o n s o – –	J 3 0 2 0 0 9 u n e ,	S 3 0 2 0 0 9 t e p ,
D i l G a m e r r o u p
i i E t t q r a o u y	2 3 3 %	% 2 4 2
G i i i l d t r o s s q u y	1 8 8	1 7 6
i i I d l b t n s r a s n e s s u u
i i E t t q r a o u y	% 3 9 8	% 4 0 6
N l i i d i t t e q u y	6 4	6 7

Liquidity

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

i i i N l d t t e q u y	( ) 4 3, 6 8 0	4 5 7 2 ,	( ) 4 8, 2 5 2	( ) 4 0, 9 1 9	6, 7 1 4	( ) 4 7, 6 3 3
----------------------------------------------------------	----------------------------------	-----------------------	----------------------------------	----------------------------------	-------------------	----------------------------------

Financing liabilities (nominal)

		f i i h t t e r e o m a u r n g n
i b i l l i f € n o n s o – –	S 3 0 t. e p , 2 0 0 9	Q 4 2 0 0 9	Q 1 2 0 0 1	Q 2 2 0 0 1	Q 3 2 0 0 1
B d o n s	2 9 6	1 4	2 9	3 5	0 2
B k l a n o a n s	1 4 2	3 2	0 1	2 1	0 9
S A B	0 7	0 1	0 1	0 1	0 1
C i l o m m e r c a p a p e r	0 4	0 4	0 0	0 0	0 0
A d i t t c c o u n e p o s s	6 1 2	* 5 2	3 7	0 6	0 3
O h t e r	1 0	0 1	0 1	0 1	0 1
T l t o a	8 6 5	9 3	8 7	3 5	1 6

* Thereof €4.5 bn daily cash accounts

Funding status of pension and healthcare benefits

i b i l l i f € n o n s o – –	J 3 0 2 0 0 9 u n e ,	S 3 0 2 0 0 9 t e p ,
i f i P b t e n s o n e n e s
B f i b l i i t t e n e o g a o n s	( ) 1 5 2	( 3 ) 1 5
P l t a n a s s e s	9 9	0 1 4
F d d t t n e s a s u u	( 3 ) 5	( 4 9 )
f H l h b i t t e a c a r e e n e s
B f i b l i i t t e n e o g a o n s	( ) 1 0	( 0 ) 1
P l t a n a s s e s	0 0	0 0
R i b M d i A t t e m u r s e m e n e c a r e c	0 1	0 1
d d F t t n e s a s u u	( ) 0 9	( ) 0 9

Research & development costs

Economic crisis is reflected by higher net credit losses*

* percent of global automotive portfolio, subject to credit risk

** annualized rate

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 forwardlooking 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.