Mercedes-Benz AG — Call Transcript 2010

Apr 27, 2010

Conference Call Q1 2010 Results

Bodo Uebber

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

April 27, 2010

Highlights Q1 2010

• World economy continued recovery path in Q1
• Market success of our attractive product portfolio
• Strong performance with EBIT of €1.2 billion driven by very positive development of Mercedes-Benz Cars and Daimler Trucks
• Net profit improved to €0.6 billion
• Positive free cash flow led to slight increase in net liquidity of industrial business
• Strategic cooperation with Renault-Nissan agreed on April 7, 2010

Strategic cooperation with Renault-Nissan agreed

F i j h b l h d t t t o r c o n c r e e c o o p e r a o n p r o e c s a e e e n a n c e u v u :	M k t a r e l h a n c u
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S f i i i i f l M d B d N d I t t • u p p y o e r c e e s- e n z e n g n e s a n r a n s m s s o n s o s s a n a n n	i i i t 2 0 1 3 n
C h i l h i f i d t t t • o m m o n e c e a r c e c r e o r c a n s a n v u y v i f i f i i h d- d t t s a r n g o p o w e r r a n c o m p o n e n s o r m s z e v a n s	2 0 1 2 2 0 1 4
A d d i i l l h h l d i h i d t t t t t o n a y, c r o s s- s a r e o n g o s u p p o r e c o o p e r a o n a g r e e

Car markets development in the last 15 months

– in thousands of units –

Key financials

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

Changes in net liquidity industrial business

– in billions of € –

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

– Group sales in thousands of units *

* Excluding Mitsubishi vehicles produced and/or sold in South Africa

Strong performance in EBIT due to higher volume, more favorable model mix and better margins

– EBIT in millions of €, return on sales in % –

Mercedes-Benz Cars

Product highlights

Incoming orders show signs of recovery in the truck business

– Incoming orders in thousands of units –

Daimler Trucks

Positive EBIT despite overall weak markets

– EBIT in millions of €, return on sales in % –

Daimler Trucks

Product highlights

EBIT increased in line with higher unit sales

– EBIT in millions of €, return on sales in % –

Product highlights

Continued good performance despite less favorable model mix

– EBIT in millions of €, return on sales in % –

Daimler Buses

Product highlights

Strict risk management pays off at Daimler Financial Services

– EBIT in millions of € –

Strategy pays off, Group on track

– EBIT in millions of € –

Assumptions for automotive markets in 2010

Car markets

• •Worldwide market expected to grow by approximately 3 to 4%
• •Growth potential in particular in China and North America

Truck markets

• • Demand for medium- and heavy-duty trucks expected to increase globally, driven by Latin America, North America and Asia
• •Europe: slightly higher than 2009
• •NAFTA region: +10%
• •Brazil: +20 to 25%
• •Japan: +20 to 30%

Van markets

•Positive market development expected from low level

Bus markets

• Growing worldwide market primarily driven by Latin American markets, while Western European bus markets are expected to decline

Outlook 2010 for Daimler sales

Mercedes-Benz Cars

• •Unit sales should grow at around double the rate of the global market
• •Demand stimulated by attractive and competitive product portfolio

Daimler Trucks

• •2010 unit sales expected to increase from low level
• • Main drivers are increased demand in Latin America and market recovery in North America and Japan

Mercedes-Benz Vans

•Positive unit sales development should continue

Daimler Buses

•Higher unit sales anticipated due to market growth in Latin America

Outlook 2010 for EBIT

Mercedes-Benz Cars

• •Results from ongoing business should benefit from higher unit sales and improved margins
• •EBIT from the ongoing business of €2.5 to 3 billion expected

Daimler Trucks

• Profit of €500 to 700 million expected, driven by the ongoing repositioning and efficiency programs and slight volume growth

Mercedes-Benz Vans

•Should achieve EBIT of approximately €250 million

Daimler Buses

•EBIT of approximately €180 million expected

Daimler Financial Services

•EBIT from the ongoing business of more than €500 million expected

Daimler Group

• •We expect Daimler to post EBIT from the ongoing business of more than €4 billion
• • For the reconciliation between the sum of the segments and the Group, charges of €200 million are expected
• • We still have a cautious look at the development of the automotive markets and continue to monitor risks along the automotive value chain

Conference Call Q1 2010 Results

Questions & Answers

Group EBIT increased in Q1 2010 due to higher unit sales, improved model mix and cost situation

in millions of € -

Special items affecting EBIT / A400M

1st Quarter

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

A 0 0 M i l i i f 4 t t t t m a r r a n s p o r a r c r a y	( 2 3 ) 7 *

* Charges related to the A400M military transport aircraft of EADS are not considered in the calculation of EBIT from ongoing business

Net profit and earnings per share

Key balance-sheet and financial figures

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

Liquidity

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

i i i i i i F l b l t n a n c n g a e s i ( l ) n o m n a	( 5 7, 3 0 1 )	( 4, 5 2 3 )	( 5 2, 7 7 8 )	( 5 7, 1 1 8 )	( 4, 3 8 1 )	( 5 2, 7 3 7 )
-----------------------------------------------------------------------------------------------------------------------------------------------	----------------------------------	-----------------------------	----------------------------------	----------------------------------	-----------------------------	----------------------------------

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

Financing liabilities (nominal)

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

* Thereof €5.2 bn daily cash accounts

Funding status of pension and healthcare benefits

	i P e n s o n	f i b t e n e s	f i H l h b t t e a c a r e e n e s
in i io f b l l € ns o – –	D 3 1, e c. 2 0 0 9	M 3 1, a r. 2 0 0 1	D 3 1, e c. 2 0 0 9	M 3 1, a r. 2 0 0 1
B f i b l i i t t e n e o a o n s g	( 1 6 ) 5	( 6 ) 1 7	( 1. 0 )	( ) 1. 1
P l t a n a s s e s	1 0 6	1 0 8	0 0	0 0
i i R b M d A t t e m u r s e m e n e c a r e c			0 1	0 1
F d d t t e s s u n a u	( 9 ) 5	( 9 ) 5	( 0 9 )	( 0 ) 1.
i i P r o v s o n s	3 1	3 3	0 9	0 9
f F d d i i i i t t n e p o s o n n e o p r o s o n s u v	( 2 8 )	( 2 6 )	0 0	( 0 ) 1

Research & development costs

– in millions of € –

Q1 2009 Q1 2010

Net credit losses* remain on relatively high level

* 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 further improvement or a renewed deterioration of global economic conditions, in particular a renewed decline of consumer demand and investment activity in Western Europe or the United States, or a downturn in major Asian economies; a continuation or worsening of the tense situation in the credit and financial markets, which could result in a renewed increase in borrowing costs or limit our funding flexibility; changes in currency exchange rates or interest rates; the ability to continue to offer fuel-efficient and environmentally friendly products; a permanent shift in consumer preference towards smaller, lower margin vehicles; 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; the successful implementation of the strategic cooperation with Renault, 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.