Berlin, 14 April, 2010—In the past twelve months, Daimler AG (stock-exchange symbol DAI) has taken some important strategic actions in an extremely difficult environment and has thus created the right conditions for a successful future.
“We did not limit ourselves to simply trying to somehow keep our head above water in the crisis,” Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, told the approximately 5,000 assembled shareholders at the International Congress Centre (ICC) here today.
“We continued to do our strategic homework. Daimler is extremely well positioned in the race to shape the future of the automobile,” he stated.
The decisions that have been made since the last Annual Meeting add up to a coherent picture of Daimler’s strategy: “We are sharpening our brand profiles, spearheading technological transformation, growing in key markets, satisfying changed customer requirements and boosting our efficiency,” explained Dr. Zetsche.
The fact that Daimler can look to the future with confidence is shown by the figures for unit sales of Mercedes-Benz Cars in the first quarter of 2010. Worldwide, Group sales of the Mercedes-Benz brand rose by nearly 27 percent. Thanks to the increasing success of the new E-Class and S-Class, the model mix has also improved with a higher percentage of larger cars.
In the biggest export market, the USA, Mercedes-Benz sells more cars than any other German premium brand. In China, which is currently regarded as the most important market of the future, unit sales actually increased by 136 percent.
Dr. Zetsche: “In view of these numbers, our global sales target for the year is ambitious, but it’s also realistic: We plan to grow at around double the rate of the global passenger car market in full-year 2010.”
The Chairman of the Board of Management once again affirmed the outlook given at the annual press conference in February for the development of business in 2010.
The Daimler Group assumes that unit sales and revenue will increase this year, but that they will still be significantly lower than the good levels of 2008.
In total, Daimler anticipates Group EBIT from ongoing business operations of more than €2.3 billion, with all divisions making a positive EBIT contribution.
Dr. Zetsche sees the latest cooperation agreed upon with Renault-Nissan last week as an important step for the Group on the way to establish a “highly efficient business system.”
The agreement covers cooperation in four areas: Smart will offer a four-seat model based on a vehicle architecture developed jointly with its partner for the Twingo and the smart, thereby enhancing smart’s position as a young brand offering practical and attractive urban vehicles.
In addition, new small three and four-cylinder engines will be jointly developed. Cooperation will also take place in the area of small commercial vehicles. Mercedes-Benz Vans will supplement its portfolio with a completely new entry-level model. And Nissan will be supplied with large Mercedes-Benz gasoline and diesel engines for its luxury brand, Infiniti.
In terms of environmentally friendly products, Daimler aims to be the technological leader, a role it has had for a long time in the field of safety.
To help achieve this goal, the internal combustion engine will be further optimized and supplemented with hybrid modules, and fully electric vehicles with battery-powered drive systems or fuel cells will be developed and produced for emission-free driving.
In 2009, the CO2 (carbon dioxide) emissions of the cars sold by Daimler in the European Union fell by 13 grams to 160 g/km. Daimler’s goal is to reduce the CO2 emissions of its new-car fleet in the European Union to less than 140 g/km by the year 2012.
Daimler places priority on strong partnerships also in the field of sustainable mobility.
This includes its equity interest in Tesla, the cooperation with Evonik on lithium-ion technology, and the collaboration with RWE, Enel and Linde on the development of the required infrastructure for emission free driving.
The world is moving towards “Automobile 2.0.” “Many things that seemed to be permanently defined for almost a century are likely to change in the coming 10 or 20 years,” Zetsche pointed out.
This applies above all to drive technology.
“Oil is becoming scarcer and more expensive – and its combustion is contributing to global warming. Government regulations regarding emissions are therefore becoming stricter; customers are becoming more environment conscious and the cars are becoming more electric,” stated Dr. Zetsche.
The Chairman of the Board of Management of Daimler AG welcomes the fact that the German government wants to turn Germany into the leading market for electric mobility. “This is good policy,” stressed Dr Zetsche.
The “electric automobile summit meeting” planned for early May could be a first step in that direction. But it’s equally clear that it has to be followed by additional steps.
Dr Zetsche emphasised that the need for political action ranges from promoting research and creating the necessary infrastructure to the introduction of international standards and providing the right incentives for market launch.
“In general, we need the support of political decision-makers in order to complete the transition to electric driving. Working together will make us strong!”
Daimler presented its figures for the year 2009 in February. Unit sales decreased in all vehicle segments due to the global economic crisis, leading to a 20 percent fall in revenue to €78.9 billion.
As a result of the measures taken at the Group at an early stage to reduce costs by €5.3 billion and the additional efficiency enhancements in the context of the ongoing optimization programmes, effective action has been taken to counter falling earnings.
The Group posted an operating loss of €1.5 billion and a significant net loss of €2.6 billion.
In view of this unusual earnings situation, the Board of Management and the Supervisory Board decided that Daimler will, by way of exception, not pay a dividend for 2009, whereby that decision solely reflects last year’s business situation.
Dr. Zetsche: “We would have decided differently had we not been firmly convinced that our course of action was necessary. It is also in the long-term interest of our shareholders, because it raises the dividend payment potential from our retained income in the years to come.”
Daimler intends to resume paying a dividend for the current year. The goal remains to achieve a payout ratio in the magnitude of 40 percent of net profit.
Dr Zetsche told the assembled share holders that the automotive industry was undergoing a far-reaching transformation. He identified two main reasons:
The first was the financial and economic crisis and the historically unprecedented contraction of markets worldwide that followed.
The second, he observed, “involves our industry’s repositioning as it prepares for the post-petroleum era.
“Manufacturers, suppliers, and new cooperation partners alike are preparing to meet the fundamentally changed demands of future mobility,” adds Dr Zetsche.
The Chairman of the Board of Management observed further that although the financial and economic crisis never threatened Daimler’s existence, it did made its mark “on our results, especially in the first half of 2009.”
He described 2009 as a year in which many key automotive markets literally collapsed. Markets plummeted in some cases by 20 to 40 percent in countries where governments did not intervene to temporarily stimulate the demand of small cars. The downturn in truck markets was in certain instances even more dramatic.
In this difficult environment, Daimler recorded annual revenues of 79 billion euros, a decline of approximately 20 percent compared with 2008, Dr Zetsche announced.
He said: “The impact on our earnings is well known: Mercedes-Benz Cars and Daimler Trucks recorded extensive full-year losses, even though Mercedes became profitable again in the third quarter of 2009.”
Dr Zetsche said more important for the long term was the good news that Daimler was extremely “well positioned in the race to shape the future of the automobile.
“That’s because we did not limit ourselves to simply trying to ‘somehow’ keep our head above water during the crisis. Instead, we continued to do our strategic home work and laid important foundations for our post-crisis success. As much as auto markets clearly prevented us from achieving better results in 2009, we can still look ahead with confidence,” he said.