German Car Zone

OFFICIAL PRESS RELEASE

Berlin, Germany, Apr 08, 2009

- Cost cutting and efficiency programs in all divisions

- Nearly every third Mercedes-Benz automobile is meanwhile a “five-liter car”

- Shareholders to decide on dividend of €0.60 per share

Daimler AG (stock exchange abbreviation: DAI) will take all the required measures in order to emerge strengthened from the current economic crisis. “We intend to remain a strong company also in times of weak markets,” states Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, according to the speech text published in advance of the Annual Meeting attended by approximately 6,600 shareholders at the International Congress Center in Berlin on Wednesday.


Daimler intends to manage the crisis means of rigid cost management, reduced labor costs and reduced working capital, as well as by maintaining financial flexibility and executing further efficiency programs in all divisions.

In the first quarter of 2009, Daimler drastically intensified the actions introduced last autumn to reduce the costs of business travel, consultancy fees and general overheads. Wage rises have been limited to the portion specified by the collective bargaining agreement, while executives have had to accept substantial salary reductions of nearly 30%. The company announced additional savings measures last week. Negotiations with the employee representatives are to be concluded by the end of April.

According to Dr. Dieter Zetsche, automobile markets will not pass through the worst of the recession until the second half of 2009 at the earliest.

Despite the crisis, Daimler continues to make targeted investments in key technologies for the future of the automotive industry. Dr. Dieter Zetsche: “Although the crisis is forcing us to cut costs wherever we can, we will not jeopardize our future by reducing essential investment.”

By 2012, Daimler intends to reduce the average CO2 emissions of its new car fleet in Europe to less than 140 grams per kilometer, thus fulfilling the EU targets. 24 Mercedes-Benz Cars models already emit less than 140 grams of CO2 per kilometer, and nearly every third car is meanwhile in the so-called “five-liter category.” Thanks to this progress, at least 50% of all cars sold in Germany in 2009 will profit from the country’s new system of vehicle taxation.

Daimler is preparing for a distinct decline in business volumes this year. Revenue is likely to be significantly lower than in the prior year in all automotive divisions and further substantial burdens on Group earnings are anticipated. A more detailed statement on earnings will not be possible until the development of the world economy and the relevant markets can be better assessed. The Group will publish its financial results for the first quarter of 2009 on April 28, 2009, whereby a significant loss is anticipated for the first quarter. Daimler expects a gradual improvement in the earnings situation as the year progresses, with contributions from the full availability of the new Mercedes-Benz E-Class and the crisis management that has been initiated.

In the Annual Report 2008, which was published on February 17, the Company reported Group revenue for the year of €95.9 billion. Operating profit on continuing operations amounted to €6.2 billion. Including all special factors, in particular the charges on earnings of €3.2 billion from the remaining 19.9% equity interest in Chrysler, operating profit amounted to just €2.7 billion. Net profit for the year 2008 was €1.4 billion.

From an accounting perspective, Daimler already significantly reduced its Chrysler-related risk exposure in 2008. Furthermore, the 22 Chrysler sales companies outside the NAFTA region that continued to be temporarily managed by Daimler were successfully transferred to Chrysler Holding LLC effective March 31, 2009. This transfer was part of the agreement concluded with Cerberus in 2007.

The Board of Management and the Supervisory Board will recommend to today’s Annual Meeting that a dividend of €0.60 per share be distributed (prior year: €2.00).

The main reasons for the dividend adjustment are the level of earnings achieved in 2008 and the difficulty in estimating the future development of the world economy and the automotive markets.


Mercedes-Benz-Blog -- Unmistakable. Unique. Classy. Mercedes-Benz.: Daimler CEO Zetsche at the Annual Meeting: “We intend to remain a strong company also in times of weak markets”


M