STUTTGART, Germany, Oct. 28 /PRNewswire-FirstCall/ -- In the third quarter of 2010, Daimler AG (stock-exchange symbol DAI) continued its excellent performance of the first half of the year. The automotive group achieved EBIT of euro 2,418 million for the reporting period (Q3 2009: euro 470 million). This repeated positive result was aided by the worldwide recovery of automobile markets, an attractive product range and sustained efficiency improvements.
Daimler assumes it will be able to continue along this successful path also in the fourth quarter. Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: "Of course, the world economy is not yet as stable as it was before the recession, but we are confident that we will continue to operate successfully in our markets." For the year 2010, the Daimler Group now anticipates EBIT from its ongoing business of more than euro 7.0 billion.
In the third quarter of 2010, EBIT was boosted by a gain of euro 183 million that was realized upon the adjustment of health-care and pension benefits at the US subsidiary, Daimler Trucks North America. In addition, the positive verdict in a lawsuit involving Daimler led to a gain of euro 218 million. The special factors affecting earnings in the third quarter are shown in the table below.
The good EBIT trend led to a significant improvement in net profit to euro 1,610 million (Q3 2009: euro 56 million). Earnings per share improved accordingly to euro 1.44 (Q3 2009: euro 0.04).
Unit sales up by 23% in the third quarter
In the third quarter of 2010, Daimler sold 475,100 cars and commercial vehicles worldwide, surpassing the prior-year figure by 23%.
The Daimler Group's third-quarter revenue of euro 25.1 billion was 30% higher than in the prior-year quarter; adjusted for exchange-rate effects, revenue grew by 22%.
The free cash flow of the industrial business for the period of January through September increased by a significant euro 3.1 billion to euro 5.3 billion.
At the end of the third quarter of 2010, Daimler employed 259,943 people worldwide (Q3 2009: 256,857). Of that total, 164,589 were employed in Germany (Q3 2009: 163,538).
Details of the divisions in the third quarter
Mercedes-Benz Cars increased its unit sales once again in the third quarter: by 17% to 317,500 vehicles. Revenue rose by 33% to euro 13.7 billion.
The division achieved third-quarter EBIT of euro 1,299 million, which is an increase of euro 944 million compared to the prior-year quarter, continuing the positive trend of the first half of the year (Q3 2009: EBIT of euro 355 million). The return on sales improved from 3.5% to 9.5%.
Also in the third quarter, the excellent earnings resulted primarily from the high level of unit sales, especially in China and the United States, as well as from an advantageous product mix. There were positive effects also from better pricing and from the advantageous development of exchange rates and warranty expenses. There were negative effects from increased research and development expenditure.
Daimler Trucks increased its unit sales substantially to 94,800 vehicles, compared with 66,100 in the third quarter of last year. Revenue rose by 47% to euro 6.4 billion.
The division posted EBIT of euro 500 million, improving on the result for the prior-year period by euro 627 million (Q3 2009: EBIT of minus euro 127 million). The return on sales amounted to 7.8% (Q3 2009: minus 2.9%).
The positive earnings trend was mainly a result of the good development of unit sales in all major markets. Sustained efficiency improvements, in particular from the repositioning of the subsidiaries Daimler Trucks North America and Mitsubishi Fuso Truck and Bus Corporation, also had a positive impact on the development of EBIT. An additional factor at Daimler Trucks North America was a gain of euro 183 million from the adjustment of health-care and pension benefits. There were opposing effects from charges relating to the revaluation of long-term warranty and service obligations as well as an increase in research and development costs.
Mercedes-Benz Vans sold a total of 53,700 vehicles in the third quarter (Q3 2009: 40,100). Revenue of euro 1.9 billion was also significantly higher than in the prior-year period (Q3 2009: euro 1.6 billion).
The division reported an operating profit of euro 122 million (Q3 2009: euro 1 million). The return on sales amounted to 6.4%, compared with 0.1% in the prior-year period. The significant earnings improvement resulted primarily from the substantial increase in unit sales compared with the third quarter of last year. Sustained efficiency gains also had a positive impact on EBIT.
Daimler Buses increased its unit sales by 9% to 9,100 buses and bus chassis. As this growth resulted solely from the continuing positive development of chassis sales, revenue was slightly below the prior-year level at euro 1,007 million (Q3 2009: euro 1,024 million).
The division achieved EBIT of euro 11 million (Q3 2009: euro 23 million) and a return on sales of 1.1% (Q3 2009: 2.2%). This earnings development is mainly due to the unfavorable model mix; deliveries of bus chassis increased while unit sales of complete buses decreased.
Daimler Financial Services' contract volume increased to euro 61.1 billion at the end of the third quarter, which is 5% above the level at the end of 2009. Adjusted for exchange-rate effects, the portfolio remained stable. New business increased to euro 7.3 billion (Q3 2009: euro 6.0 billion).
The division significantly improved its operating profit to euro 317 million (Q3 2009: euro 101 million). This increase in earnings was mainly caused by lower expenses for risk provisions and higher interest margins.
The reconciliation of the divisions' EBIT to Group EBIT takes into account Daimler's proportionate share of its equity-method investment in EADS, other gains or losses at the corporate level, and the effects on earnings of eliminating intra-Group transactions between the divisions.
Based on the divisions' planning, Daimler expects total unit sales and Group revenue to increase significantly in full-year 2010 (2009: 1.6 million vehicles and euro 78.9 billion).
In view of the good business developments in all divisions, the Daimler Group is targeting EBIT from its ongoing business of more than euro 7.0 billion in 2010.
This expectation is based on the assumption of continued stable economic developments and the ongoing market success of the Group's products. The biggest risks are seen in the high volatility of the international financial markets and the possible worsening of the macroeconomic environment.
The divisions' expectations for EBIT from the ongoing business in 2010 are as follows:
- Mercedes-Benz Cars expects to achieve EBIT of approximately euro 4.5 billion.
- Daimler Trucks anticipates EBIT of more than euro 1.1 billion.
- Mercedes-Benz Vans assumes it will achieve EBIT of approximately euro 430 million.
- Daimler Buses expects to post EBIT of approximately euro 180 million.
- Daimler Financial Services anticipates EBIT of more than euro 900 million.
Mercedes-Benz Cars will continue to profit during the rest of this year from the success of its current product range, above all from the new E-Class models. Unit sales will be boosted also by the new super sports car Mercedes-Benz SLS AMG and by the new generations of the R-Class and the CL-Class. Since the third quarter of 2010, Mercedes-Benz automobiles have been successively equipped with the new and particularly fuel-efficient six and eight cylinder gasoline engines. For the smart brand, an increase in demand is anticipated following the launch of a new generation of the smart fortwo. On the basis of an attractive and competitive range of vehicles, the division assumes that unit sales of the Mercedes-Benz brand will increase by a double-digit rate in 2010.
The global market revival will continue to have a positive impact on unit sales at Daimler Trucks. Increased unit sales are anticipated above all in Europe, Indonesia, Brazil and the United States. The division expects significant sales impetus from the new Mercedes-Benz trucks Axor and Atego. The new Atego and the Atego BlueTec Hybrid were voted Truck of the Year 2011 at Germany's IAA Commercial Vehicles trade fair. In the United States, the engines of the new generation of heavy-duty engines offered with BLUETEC technology to fulfill the EPA10 emission regulations are leading to rising demand for Freightliner trucks. The presentation of the new Fuso Canter in the fourth quarter will generate further sales growth for the Trucks Asia unit.
Against the backdrop of rising demand and the market recovery in the vans business, as well as the launch of the new generation of Vito and Viano models, Mercedes-Benz Vans expects a significant increase in unit sales compared with 2009.
Daimler Buses anticipates growth in unit sales in 2010, primarily due to the development of chassis sales in Latin American markets. In Western Europe, however, unit sales will remain below the prior-year level for market reasons.
Daimler Financial Services assumes that worldwide credit-risk costs will decrease in full-year 2010. Adjusted for exchange-rate effects, contract volume is expected to show a stable development in the fourth quarter.
Due to the upturn in demand, the Daimler Group's worldwide workforce will grow slightly compared with the end of 2009.
The special factors listed in the following table affected EBIT in the third quarters of 2010 and 2009:
Special factors affecting EBIT
In millions of euros
Repositioning of Daimler Trucks North America
Repositioning of Mitsubishi Fuso Truck and Bus Corporation
Adjustment of health-care and pension benefits
Daimler Financial Services
Sale of non-automotive assets
Gain related to a legal proceeding
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 slowdown in the recovery of the global economy 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 renewed worsening of the situation in the credit and financial markets, which could result in an 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 renewed 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-Nissan, 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.
Daimler AG is one of the world's most successful automotive companies. With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services, the Daimler Group is one of the biggest producers of premium cars and the world's biggest manufacturer of commercial vehicles with a global reach. Daimler Financial Services provides its customers with a full range of automotive financial services including financing, leasing, insurance and fleet management.
The company's founders, Gottlieb Daimler and Carl Benz, made history with the invention of the automobile in the year 1886. As an automotive pioneer, Daimler continues to shape the future of mobility. The Group applies innovative and green technologies to produce safe and superior vehicles which fascinate and delight its customers. With the development of alternative drive systems, Daimler is the only vehicle producer investing in hybrid drive, electric motors and fuel-cell systems, with the goal of achieving emission-free mobility in the long term. This is just one example of how Daimler willingly accepts the challenge of meeting its responsibility towards society and the environment.
Daimler sells its vehicles and services in nearly all the countries of the world and has production facilities on five continents. Its current brand portfolio includes, in addition to the world's most valuable automotive brand, Mercedes-Benz, the brands smart, Maybach, Freightliner, Western Star, Fuso, Setra, Orion and Thomas Built Buses. The company is listed on the stock exchanges of Frankfurt and Stuttgart (stock exchange symbol DAI). In 2009, the Group sold 1.6 million vehicles and employed a workforce of more than 256,000 people; revenue totaled euro 78.9 billion and EBIT amounted minus euro 1.5 billion.
Figures for the 3rd quarter and the first nine months 2010
amounts in euros
Revenue, in millions
+ 30 %
+ 24 %
EBIT, in millions
+ 414 %
Net profit (loss), in millions
Earnings (loss) per share (EPS)
Employees (September 30)
+ 1 %
+ 1 %
EBIT by Divisions/Segments
in millions of euros
+ 266 %
- 52 %
- 4 %
Daimler Financial Services
+ 214 %
+ 44 %
Revenue by Divisions/Segments
in millions of euros
+ 33 %
+ 31 %
+ 47 %
+ 27 %
+ 19 %
+ 28 %
- 2 %
+ 6 %
Daimler Financial Services
+ 14 %
+ 6 %
- 48 %
- 51 %
+ 23 %
+ 24 %
+ 17 %
+ 19 %
+ 44 %
+ 34 %
+ 34 %
+ 44 %
+ 9 %
+ 21 %
SOURCE Daimler Corporate Communications