Daimler Achieves EBIT Of 鈧?,053 Million

Daimler Achieves EBIT Of 鈧?,053 Million

Daimler achieved EBIT of 鈧?,053 million in the second quarter of this year (Q2 2007: 鈧?,134 million). The Mercedes-Benz Cars and Daimler Trucks divisions were able to slightly increase their earnings. The Mercedes-Benz Vans and Daimler Buses units also achieved higher EBIT. The decrease in Group earnings was mainly related to Daimler鈥檚 interest in Chrysler (charges of 鈧?73 million). Net profit amounted to 鈧?,395 million (Q2 2007: 鈧?,849 million), equivalent to earnings per share of 鈧?.40 (Q2 2007: 鈧?.74). Mercedes-Benz Cars increased its unit sales by 11% in the second quarter. Unit sales of Mercedes-Benz brand vehicles grew by 9% to a new record of 312,000 vehicles. 24%, selling 39,500 vehicles. Revenue rose by 3% to 鈧?2.9 billion. The division increased its EBIT by 1% to 鈧?,212 million. The slight increase in earnings was partially due to the positive unit-sales trends for both the Mercedes-Benz and the smart brands. The good development of unit sales was primarily driven by the C-Class models and the smart fortwo.

Additional contributions to the improved earnings came from ongoing growth in car sales in the emerging markets, especially China and Russia, and from further efficiency improvements. The Daimler Trucks division posted EBIT of 鈧?08 million, thus slightly exceeding its earnings in the second quarter of last year (鈧?01 million). The result for the prior-year quarter was favorably affected by a special gain of 鈧?8 million realized on the sale of real-estate properties in Japan. The division鈥檚 improved earnings are mainly the result of the good development of unit sales in Europe, Latin America and some other markets, a positive product mix, and efficiency improvements. Trucks Europe/Latin America (Mercedes-Benz) increased its unit sales by a further 17% to 46,500 vehicles, thus setting another record. Trucks NAFTA (Freightliner, Sterling, Western Star, Thomas Built Buses) increased its unit sales by 11%. The figure for the prior-year quarter had been impacted by a drop in demand due to stricter emission regulations in the United States and Canada. The unit sales attained by Trucks Asia (Mitsubishi Fuso) increased from 47,800 to 49,200 vehicles.

EBIT of 鈧?83 million reported by Daimler Financial Services for the second quarter of 2008 was lower than the result for the prior-year period (Q2 2007: 鈧?20 million). The decrease in earnings was mainly due to higher cost of risk compared to the low levels of the prior-year quarter. Furthermore, there were higher expenses related to setting up the new financial services organization in the NAFTA region following the separation from Chrysler. There was a positive impact on earnings, however, from the increased contract volume. The second-quarter EBIT of the Vans, Buses, Other segment amounted to 鈧?48 million (Q2 2007: 鈧?57 million). Mercedes-Benz Vans and Daimler Buses benefited from the continued very positive development of unit sales and both achieved higher earnings. Mercedes-Benz Vans reported EBIT of 鈧?62 million and Daimler Buses reported EBIT of 鈧?70 million. Daimler Buses sold 11,100 buses and chassis, thus surpassing the very high prior-year sales level by 7% and setting a new unit-sales record. Daimler鈥檚 share of the earnings of EADS amounted to 鈧?2 million (Q2 2007: 鈧?5 million).

Our interest in Chrysler negatively affected EBIT in the second quarter of 2008 by 鈧?73 million; this result includes proportional expenses of 鈧?3 million resulting from the restructuring measures at Chrysler. As the Group generally applies the equity method of accounting for its interests in EADS and Chrysler with a three-month time lag, these figures mainly reflect the developments in the first quarter of this year. The results in connection with our interest in EADS and Chrysler are not cash effective. The results for Chrysler are by no means indicative for the results to be reported by Chrysler Holding LLC due to substantial valuation differences between US-GAAP used by Chrysler and IFRS accounting used by Daimler. During the second quarter, Daimler acquired 22.3% of the shares in Tognum AG from EQT, a Swedish financial investor, and an additional 2.2% through the stock market for a total of 鈧?40 million. Tognum is included in the Vans, Buses, Other segment as of June 30, 2008 using the equity method of accounting. Based on the divisions鈥?planning, Daimler expects total unit sales to increase in the year 2008 (2007: 2.1 million vehicles).

Mercedes-Benz Cars expects to increase unit sales in the year 2008. The full availability of the new C-Class sedan and station wagon as well as the new smart fortwo will make a big contribution to this sales increase. In the second half of the year, we expect new sales stimulus from the recently introduced A- and B-Class models, the CLS, SLK, SL and the new CLC. The launch of the refreshed M-Class and especially the new GLK in late 2008 will also provide additional sales momentum in the following year. However, for lifecycle reasons, the division expects unit sales of the E-Class to fall somewhat, as this car is in its last full model year. In view of the worsening economic environment, production output will be adjusted compared with the previous planning. The changed market outlook, rising raw-material prices and ongoing negative exchange-rate effects will also lead to burdens on earnings that cannot be fully offset by our significant efficiency improvements and higher unit sales.