STUTTGART, Germany, July 23, 2014 /PRNewswire/ --

• Confirmed outlook for full-year: significant growth anticipated in unit sales, revenue and EBIT from ongoing business
• Dr. Dieter Zetsche: "We are growing profitably, our strategy is bearing fruit. We are steadily continuing along our path. Supported by our product offensive and the successful continuation of our efficiency programs, we have an optimistic view of the future."
• Second-quarter unit sales up by 4% to 628,900 vehicles
• Revenue up 6% to €31.5 billion (Q2 2013: €29.7 billion)
• EBIT from ongoing business up 12% to €2.5 billion (Q2 2013: €2.2 billion)
• EBIT including special items of €3.1 billion (Q2 2013: €5.2 billion)
• Net profit of €2.2 billion (Q2 2013: €4.6 billion)

Daimler AG (stock-exchange symbol: DAI) is continuing along its path of profitable growth. In the second quarter of 2014, the Group achieved new record levels of unit sales and revenue and significantly increased its operating profit from the ongoing business. Worldwide, 628,900 passenger cars and commercial vehicles were sold from April through June, which is 4% more than in the same period of last year. Second-quarter revenue increased by 6% to €31.5 billion. Adjusted for exchange-rate effects, revenue grew by 11%. EBIT from the ongoing business rose at a higher rate than revenue, by 12% to €2.5 billion. Net profit amounted to €2.2 billion; net profit in the prior-year quarter of €4.6 billion was positively affected by the sale of EADS shares.

"We are growing profitably, our strategy is bearing fruit," stated Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars. "We are steadily continuing along our path. We are satisfied with the second quarter and continue to work consequently on structural improvements. Unit sales, revenue and EBIT from the ongoing business will all increase significantly in the year 2014. Supported by our product offensive and the successful continuation of our efficiency programs, we look to the future with optimism."

The significant increase in EBIT from the ongoing business in the second quarter reflects the very positive development of the divisions' unit sales and revenue, a better model mix and further efficiency gains. Exchange-rate effects once again had a negative impact on operating profit. Including special items, second-quarter EBIT amounted to €3.1 billion (Q2 2013:
€5.2 billion). In the prior-year period, EBIT was boosted by approximately €3.2 billion from the remeasurement and sale of EADS shares.

"Our business situation is very positive in mid-2014," stated Bodo Uebber, member of the Board of Management of Daimler AG for Finance & Controlling and Financial Services. "With our new products and the results of operations of Mercedes-Benz Cars and Daimler Trucks, we showed in the second quarter that we are maintaining a high rate of growth while improving our profitability. In the second half of this year, EBIT from the ongoing business will be higher than in the first half. But in view of the volatile environment, we are monitoring the sales markets and financial markets very closely. With our sound capital resources, we are well prepared for fluctuations."

Compared to the prior-year period income-tax expense increased in the second quarter by €264 million to €739 million as the gain on the remeasurement and sale of the EADS shares in 2013 was largely tax free. Of the Group's net profit, an amount of €92 million was attributable to non-controlling interest for the second quarter (Q2 2013: €1,749 million). Net profit attributable to the shareholders of Daimler AG therefore amounted to €2.1 billion (Q2 2013: €2.8 billion); earnings per share reached €1.97 (Q2 2013: €2.65).

Daimler once again utilized the attractive conditions in the international money and capital markets for refinancing in the second quarter of 2014. The net liquidity of the industrial business amounted to €12.7 billion at the end of the second quarter 2014 (Q2 2013: €11.3 billion). The free cash flow of the industrial business profited from the earnings contributions of the automotive divisions and amounted to €0.8 billion in the reported quarter (Q2 2013: €3.5 billion); the prior-year figure includes proceeds of €2.2 billion from the sale of the remaining EADS shares.

At the end of the second quarter of 2014, Daimler employed 280,829 (end of 2013: 274,616; end of June 2013: 276,044). Of that total, 170,649 were employed in Germany (end of 2013: 167,447; end of June 2013: 167,926); this includes the positive effects of employing vacation workers due to the good demand situation. From today's perspective, Daimler assumes that the number of employees worldwide will remain stable in 2014 compared with the end of 2013.

Details of the divisions

Mercedes-Benz Cars achieved a new record for unit sales in the second quarter of 2014 and profited from its globally balanced sales structure. Total sales by the car division grew by 3% to 418,700 units. In a volatile European market environment, Mercedes-Benz Cars performed very well and was able to increase its share of nearly all markets. In the United States, the biggest sales market, the division was more successful than ever before with sales of 81,900 units, representing growth of 7% compared to prior year. In China, Mercedes-Benz Cars continued its strong development and increased its unit sales by 13% to 68,100 vehicles.

Due to the higher-value model mix resulting from the worldwide availability of the S-Class, revenue increased at a higher rate than unit sales, by 9% to €17.8 billion. The Mercedes-Benz Cars division's second-quarter EBIT of €1,409 million was significantly higher than the prior-year figure of €1,041 million. Return on sales improved significantly to 7.9% (Q2 2013: 6.4%).

The positive earnings development of the Daimler Group's largest division primarily reflects the ongoing growth in unit sales, especially in China and the United States. There was strong demand for the S-Class and the E-Class, as well as for the expanded range of compact cars, which enabled Mercedes-Benz Cars to achieve better pricing. Efficiency measures from the "Fit for Leadership" program also had a positive impact on earnings, while there were negative effects on earnings from expenses for the launch of new models, capacity expansions, advance expenditure for new technologies and exchange-rate effects.

Unit sales by Daimler Trucks developed very differently from one region to another also in the second quarter. Worldwide, sales of 126,100 trucks were 2% higher than in the prior-year period. In the NAFTA region, increased demand for fuel-efficient and low-emission trucks led to growth in sales of 18% to 41,100 units. In Western Europe, sales of 13,200 units were 7% lower than in the second quarter of last year, primarily due to purchases being brought forward because of the introduction of Euro VI emission limits at the end of 2013. In Latin America, the current economic situation continued to have a negative impact on demand for trucks. Contrary to the weak development of overall demand, Daimler Trucks increased its market share in Brazil.

Daimler Trucks second-quarter revenue of €8.0 billion was at the prior-year level. The division's EBIT increased to €455 million (Q2 2013: €434 million) and its return on sales rose to 5.7% (Q2 2013: 5.4%). The significant increase in unit sales in the NAFTA region and reduced warranty expenses were the main drivers of the stronger earnings, while ongoing weak demand in Latin America and exchange-rate effects had a negative impact. The implementation of the "Daimler Trucks #1" efficiency measures had a positive effect on earnings.

Mercedes-Benz Vans significantly increased its unit sales in the second quarter of 2014 by 9% to 76,000 vehicles. Revenue rose by 2% to €2.5 billion. The division achieved EBIT of €242 million (Q2 2013: €204 million) and its return on sales increased to 9.7% (Q2 2013: 8.4%).

Operating profit in the second quarter of this year was influenced by the very positive development of unit sales, which reflects the significant increase in demand especially in Europe and the NAFTA region. Earnings were negatively affected, however, by expenses for the market launch of the new V-Class multipurpose vehicle and the new Vito. Exchange rate effects had an additional negative impact. EBIT profited from a positive effect of €61 million from the reversal of an impairment of Daimler's investment in the joint venture Fujian Benz Automotive Corporation (FBAC).

Daimler Buses achieved growth in unit sales compared with the prior-year period of 2%, selling 8,100 complete buses and bus chassis in the second quarter of 2014, thanks to increased demand in Western Europe. Revenue amounted to €1.0 billion (Q2 2013: €0.9 billion). Daimler Buses almost doubled its EBIT of €50 million compared to the prior-year period (Q2 2013: €27 million). The division's return on sales was 4.8% (Q2 2013: 2.9%).

The improvement in EBIT compared with the prior-year quarter was partially due to the more favorable model mix caused by higher sales of complete buses. Efficiency enhancements also had a positive impact on earnings.

At Daimler Financial Services, new business increased compared with the second quarter of last year by 12% to €11.5 billion. Contract volume reached €88.1 billion at the end of June, representing growth of 5% compared with the end of 2013. With second-quarter EBIT of €336 million, the Daimler Financial Services division surpassed its prior-year earnings of €319 million. The insurance business continued its very positive development.

The reconciliation of the divisions' EBIT to Group EBIT comprises income and expenses at the corporate level as well as effects on earnings from the elimination of intra-group transactions between the divisions.

Items at the corporate level resulted in income of €594 million (Q2 2013: €3,189 million). This primarily reflects the remeasurement of the shareholding in Tesla Motors (around 4%) of €718 million, resulting from the end of the significant influence on that company. An expense of €68 million was recognized for hedging the Tesla shares against price fluctuations. The second quarter of 2013 was affected by a gain of €3.2 billion on the remeasurement and sale of Daimler's shares in EADS. The elimination of intra-group transactions resulted in income of €9 million in the second quarter of 2014 (Q2 2013: €28 million).

Capital expenditure and research activities

The Daimler Group invested €2.1 billion in property, plant and equipment in the first half of this year (Q1-2 2013: €2.1 billion). Most of that investment volume, €1.6 billion, was at the Mercedes-Benz Cars division (Q1-2 2013: €1.6 billion). The main area of capital expenditure was on production preparations for new models, in particular the new C-Class family, the CLA Shooting Brake and the new models from AMG and smart, as well as investments for new transmissions and engine versions. Daimler also invested in the expansion of its international production and component plants.

The Daimler Group's research and development spending in the first half of the year amounted to €2.7 billion (Q1-2 2013: €2.7 billion). Approximately two thirds of the research and development spending was at the Mercedes-Benz Cars segment. The main areas were new vehicle models, highly fuel-efficient and environmentally friendly drive systems, and new safety technologies.

Daimler expects its research and development expenditure also to be slightly higher than the prior-year figure of €5.5 billion. Key projects include the successor models of the E-Class and M-Class and the next generation of compact cars. In the cars business, the company is also investing substantial amounts in new economical engines with low emissions, alternative drive systems and innovative safety technologies. Increased fuel efficiency and further reductions in engine emissions are important areas of research and development also at the other automotive divisions.

Outlook for the markets

After the world economy continued its general upward trend in the second quarter of 2014, economic risks have increased at the beginning of the third quarter, due in particular to increased political risks. It can still be assumed that the economies of the industrialized countries will grow faster than last year, while the economies of some important emerging markets (except China) will remain below their growth potential.

According to current assessments, worldwide demand for cars is likely to grow by around 4% this year. Once again, the most important growth driver will be the Chinese market, which is expected to expand at a double-digit rate also this year. The US market will also deliver significant contribution to growth. After several years of a contracting overall market, demand in Western Europe will also increase again moderately. In Japan, the negative effect of the increase in value-added tax this spring was considerably less pronounced than had been assumed. In the major emerging markets (excluding China), Daimler continues to assume that the lack of economic dynamism will also have an impact on the development of demand for cars.

From today's perspective, global demand for medium- and heavy-duty trucks in the year 2014 can only be expected at around the level of last year. With the exception of the North American market, difficult conditions are still anticipated for most of the major markets.

Daimler assumes that overall demand in Europe for medium-sized and large vans will recover slightly in 2014. For small vans, a market volume in Europe in the magnitude of the previous year is anticipated. In the United States, the Group expects demand for large vans to increase significantly in the year 2014, and a further revival of demand is expected also in China. In Latin America, Daimler assumes that the market for large vans will contract in the full year.

The market volume for buses in Western Europe in 2014 is likely to be slightly above the level of the previous year. Due to the difficult economic situation in Brazil and Argentina, demand is expected to decrease significantly in Latin America.

Outlook for the divisions

On the basis of the divisions' planning, Daimler expects its total unit sales to increase significantly in the year 2014.

After the strongest half-year in the company's history, Mercedes-Benz Cars assumes that it will significantly increase its unit sales also in full-year 2014 and will set a new sales record. In the upcoming vacation time, production will be supported by approximately 7,600 vacation workers in order to meet the strong demand in good time. Following the market launch in Europe of the C-Class sedan and the GLA (a compact SUV), the division will continue its model offensive in the coming months and years. The upcoming market launch of the C-Class sedan in the high-volume markets of the United States and China will provide another significant growth boost. The wagon version of the C-Class will accelerate this momentum as soon as it is launched on the European market in September. Mercedes-Benz is setting another milestone on the way to emission-free mobility with the S 500 PLUG-IN HYBRID, which is based on the modular hybrid system. In the fall, Mercedes-Benz Cars will expand its luxury segment with the S-Class coupé. The new smart fortwo and smart forfour had their world premieres in July and will be available on the market as of November.

Daimler Trucks anticipates a slight increase in overall unit sales in the year 2014. In Western Europe, the demand situation will remain difficult until the end of this year because of purchases brought forward to the year 2013 due to the introduction of the new Euro VI emission regulations. But Daimler Trucks will further strengthen its good market position with the new Mercedes-Benz model range. The politically tense situation in Eastern Europe entails sales risks. In the Brazilian market, a further significant drop in demand is anticipated due to the currently difficult economic situation. The extensive optimization measures now being taken, which involve the investment of approximately €300 million until the end of 2015, mainly in the production facilities and new products, should further strengthen the market position. In the NAFTA region, unit sales should develop positively in view of the expected market growth and should be significantly higher than in the year 2013. In Japan, Daimler Trucks will participate in the anticipated market growth. In India, the expanded BharatBenz model range will make an important contribution to growth in unit sales. Additional growth opportunities will result from the integrated "Asia Business Model": Vehicles of the FUSO brand from India will increasingly be sold in the growth markets of Africa and Southeast Asia.

Mercedes-Benz Vans anticipates a significant increase in unit sales in full-year 2014. Significant growth in unit sales of mid-sized and large vans is expected in Europe, where the new Sprinter as well as the new Vito and the V-Class will stimulate additional demand. Unit sales in Latin America are likely to be lower, however, due to the difficult economic situation there. A further increase in unit sales of the small van Citan is anticipated.

Daimler Buses expects unit sales in the year 2014 to be slightly lower than in the previous year. In Western Europe, the division anticipates significant expansion of its business with complete buses this year. Due to the further worsening economic situation in Brazil and Argentina, slightly weaker unit sales of bus chassis are expected in Latin America.

Daimler Financial Services anticipates significant growth in new business and contract volume in 2014. The key growth drivers are the market developments in the automotive divisions, product offensives and effective marketing directed at younger target groups, the expansion of business especially in Asia, the further development of online sales channels, and the expansion of innovative mobility services on the "moovel" Internet platform.

Outlook for the Group

Daimler assumes that its Group revenue will increase significantly in the year 2014. Above-average growth rates are anticipated in North America and China. On the basis of the anticipated market development, the aforementioned factors and the planning of the divisions, Daimler assumes that EBIT from the ongoing business will increase significantly in 2014. For the second half-year of 2014, Daimler expects the EBIT from ongoing business above the level of the first half-year 2014.

For the individual divisions, Daimler aims to achieve the following EBIT targets from the ongoing business in full-year 2014:

– Mercedes-Benz Cars: significantly above the prior-year level,

– Daimler Trucks: significantly above the prior-year level,

– Mercedes-Benz Vans: at the prior-year level,

– Daimler Buses: significantly above the prior-year level and

– Daimler Financial Services: slightly above the prior-year level.

The remeasurement at fair value of the equity interest in Tesla Motors and the hedge of its share price resulted in an EBIT contribution of €0.65 billion in the second quarter, which is not attributable to the ongoing business. The sale of the equity interest in Rolls-Royce Power Systems Holding GmbH (RRPSH) is expected to result in a contribution to earnings of around €1.0 billion in the second half of the year, which also will not be allocated to EBIT from the ongoing business.

In order to achieve its ambitious growth targets, Daimler has initiated efficiency programs at all the divisions. "Until the end of this year, we will accomplish the announced steps in achieving our goals", emphasized Dieter Zetsche. "The efficiency programs are showing effects across all the divisions. We will structurally secure the programs and develop them consequently. In addition, we are working at all sites to increase our flexibility," stated Zetsche.

The Mercedes-Benz Cars division will improve its cost position by approximately €2 billion with the "Fit for Leadership" program, and will enhance its efficiency with long-term structural optimizations. After approximately 40% of the total planned savings volume was achieved in the year 2013, 70-80% is targeted for this year. With the "Daimler Trucks #1" program, 30% of the target of €1.6 billion was realized last year and 70-80% is to be achieved by the end of 2014. The positive impact of all the divisions' efficiency programs on EBIT in a total amount of approximately
€4 billion will be fully realized by 2015.

"We will secure Daimler's long-term growth with targeted investments in new products and in our facilities," added Bodo Uebber. "Financial discipline will continue to be a key criterion for our actions."

In late June, Daimler and the Renault-Nissan alliance decided to significantly expand their cooperation, which started in 2010. The two partners will together invest a total of approximately €1 billion in the construction of a shared plant in Mexico with an annual capacity of 300,000 vehicles, where Mercedes-Benz vehicles will be produced as of 2018. In addition, Mercedes-Benz and Infiniti will collaborate on the development of next-generation compact cars. Also at the end of June, Daimler and Infiniti started the joint production of four-cylinder gasoline engines for the Mercedes-Benz C-Class and the Infiniti Q50 in Decherd in Tennessee, USA.

Within the context of the Mercedes-Benz 2020 growth strategy, Daimler will increasingly emphasize its sales presence in inner cities in order to make direct contact with existing and potential customers. In June 2014, the first "Mercedes me" store in Germany opened in Hamburg. By 2020, the number of brand outlets in urban areas is to be doubled to more than 40. Daimler will bring together all existing and future services and mobility packages under the "Mercedes me" brand. Online sales of vehicles are also an integral component of the new sales and marketing initiative. In early December 2013, Mercedes-Benz became the first premium manufacturer to offer new cars on the Internet. The digital sales channel is a supplement to traditional retailing and is intended above all to appeal to younger customers and persons used to Internet shopping.

Mercedes-Benz presented the world's first truck that can drive autonomously this July. The Future Truck 2025 allows autonomous driving for trucks at speeds up to 80 kilometers per hour, thus providing a glimpse in advance of the IAA Commercial Vehicles (Hanover Motor Show) at long-distance trucks of tomorrow and future transport systems. This is based on the intelligent networking of all existing safety systems, supplemented by cameras, radar sensors and the possibility of communication between vehicles. Technically, implementation on the roads is conceivable within five years, but due to the complex situation of heavy commercial vehicles, a timeframe of ten years is realistic.

Special items

The special items shown in the table affected EBIT in the second quarters of 2014 and 2013.

Further information from Daimler is available at:
www.media.daimler.comand www.daimler.com

Forward-looking statements:
This document contains forward-looking statements that reflect our current views about future events. The words "anticipate," "assume," "believe," "estimate," "expect," "intend," "may," "can," "could," "plan," "project," "should" and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a decline of demand in our most important markets; a worsening of the sovereign-debt crisis in the euro zone; an increase in political tension in Eastern Europe; a deterioration of our refinancing possibilities on the credit and financial markets; events of force majeure including natural disasters, acts of terrorism, political unrest, industrial accidents and their effects on our sales, purchasing, production or financial services activities; changes in currency exchange rates; a shift in consumer preferences towards smaller, lower-margin vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilize our production capacities; price increases for fuel or raw materials; disruption of production due to shortages of materials, labor strikes or supplier insolvencies; a decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization measures; the business outlook for companies in which we hold a significant equity interest; the successful implementation of strategic cooperations and joint ventures; changes in laws, regulations and government policies, particularly those relating to vehicle emissions, fuel economy and safety; the resolution of pending government investigations and the conclusion of pending or threatened future legal proceedings; and other risks and uncertainties, some of which we describe under the heading "Risk and Opportunity Report" in the current Annual Report. If any of these risks and uncertainties materializes or if the assumptions underlying any of our forward-looking statements prove to be incorrect, the 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 since they are based solely on the circumstances at the date of publication.

About Daimler
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 financing, leasing, fleet management, insurance and innovative mobility services. The company's founders, Gottlieb Daimler and Carl Benz, made history with the invention of the automobile in the year 1886. As a pioneer of automotive engineering, Daimler continues to shape the future of mobility today: The Group's focus is on innovative and green technologies as well as on safe and superior automobiles that appeal to and fascinate its customers. For many years now, Daimler has been investing continually in the development of alternative drive systems with the goal of making emission-free driving possible in the long term. So in addition to vehicles with hybrid drive, Daimler now has the broadest range of locally emission-free electric vehicles powered by batteries and fuel cells. 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 premium automotive brand, Mercedes-Benz, the brands smart, Freightliner, Western Star, BharatBenz, Fuso, Setra and Thomas Built Buses. The company is listed on the stock exchanges of Frankfurt and Stuttgart (stock exchange symbol DAI). In 2013, the Group sold 2.35 million vehicles and employed a workforce of 274,616 people; revenue totaled €118.0 billion and EBIT amounted to €10.8 billion.

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SOURCE Daimler Corporate Communications