Daimler achieved EBIT of €2,053 million in the second quarter of this year (Q2 2007: €2,134 million).

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Press Release

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’s interest in Chrysler (charges of €373 million).

Net profit amounted to €1,395 million (Q2 2007: €1,849 million), equivalent to earnings per share of €1.40 (Q2 2007: €1.74).

Unit sales up by 10% in the second quarter

In the second quarter of 2008, Daimler sold 566,500 cars and commercial vehicles worldwide, surpassing the figure for the prior-year period by 10%.

Daimler’s second-quarter revenue increased from €23.8 billion to €25.4 billion (+6%). Adjusted for exchange-rate effects and changes in the consolidated group, revenue growth amounted to 11%.
At the end of the second quarter of 2008, Daimler employed 274,999 people worldwide (end of Q2 2007: 271,486). Of this total, 168,342 were employed in Germany (end of Q2 2007: 166,581).

Details of the divisions in the first quarter of 2008

Mercedes-Benz Carsincreased 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. smart once again achieved a significant increase in unit sales of 24%, selling 39,500 vehicles. Revenue rose by 3% to €12.9 billion.

The division increased its EBIT by 1% to €1,212 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. Unfavorable exchange-rate effects, higher raw-material prices and higher costs for the development of technologies to reduce CO₂-emissions negatively affected EBIT in the second quarter of 2008.

Daimler Trucks

The Daimler Trucks division posted EBIT of €608 million, thus slightly exceeding its earnings in the second quarter of last year (€601 million). The result for the prior-year quarter was favorably affected by a special gain of €68 million realized on the sale of real-estate properties in Japan.
The division’s 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. There were negative effects on earnings, however, from the continued difficult economic environment in the United Statesand higher raw-material prices.

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.

Daimler Financial Services

EBIT of €183 million reported by Daimler Financial Services for the second quarter of 2008 was lower than the result for the prior-year period (Q2 2007: €220 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 €148 million (Q2 2007: €257 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 €262 million and Daimler Buses reported EBIT of €170 million.

The Mercedes-Benz Vans

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’s share of the earnings of EADS amounted to €32 million (Q2 2007: €95 million). Our interest in Chrysler negatively affected EBIT in the second quarter of 2008 by €373 million; this result includes proportional expenses of €93 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 €640 million. Tognum is included in the Vans, Buses, Other segment as of June 30, 2008 using the equity method of accounting. There was no earnings contribution from Tognum in the second quarter of 2008.

Outlook

Although the headwind for the automotive industry and also for Daimler has become stronger as a result of the slowdown of global growth and the weak economy in the United States, Daimler continues to assume that its divisions will be able to achieve their unit-sales targets for full-year 2008.

Based on the divisions’ 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. EBIT is therefore expected to be lower than in the prior year, with a return on sales in the magnitude of 8%.

Daimler Trucks sold 122,800 vehicles in the second quarter of 2008, significantly more than in the prior-year period (+10%), despite the ongoing weakness of the USeconomy. Revenue increased from €6.9 billion to €7.4 billion.

The Daimler Trucks division posted EBIT of €608 million, thus slightly exceeding its earnings in the second quarter of last year (€601 million). The result for the prior-year quarter was favorably affected by a special gain of €68 million realized on the sale of real-estate properties in Japan.

The division’s 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. There were negative effects on earnings, however, from the continued difficult economic environment in the United Statesand higher raw-material prices.

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.

Daimler Financial Services anticipates a moderate increase in its worldwide contract volume in full-year 2008. Despite the expenses connected with setting up its own financial services organization in North America, the division continues to assume that it will achieve a return on equity of at least 14% in the full year.

Due to strong demand for the Sprinter and the positive sales trend of the Vito/Viano, Mercedes-Benz Vans expects significant growth with a new unit-sales record in 2008.
Daimler Buses also expect to match the high level of unit sales achieved in the prior year once again.
The Daimler Group anticipates a slight increase in the total revenue in full-year 2008 (2007: €99.4 billion).

The Daimler Group

On the basis of the divisions’ projections, the Daimler Group expects to post EBIT from ongoing operations of more than €7 billion in 2008. Effects related to Chrysler are not included therein. Daimler had previously anticipated EBIT from ongoing operations of significantly above the prior year’s level (€7.7 billion).

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Micro-site created by CriticalMass

Thanks for the tip James.

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The case has been brought to a court in Portland, Oregon, where they seek an 8.6% royalty fee of the navigation systems price, which as we all know can cost up to $5000. In addition to the royalties, they are requesting to halt the sales of all systems that use their patents. Frank Evanshen, CEO of WordLogic, stated in an phone interview with Bloomberg: “We contacted them in 2005, and they have been aware of” the infringement. Will be interesting to watch this case. While I can guarantee you that Mercedes will not stop selling navi-systems anytimes soon, you might have to pay a bit more for them, you know, to cover the royalty fees.

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Mercedes-Benz Canada reached the half-way point of 2008 by beating the best first half ever, the best second quarter ever, and the best June ever. As their rivals falter, the three-pointed star continues to surge ahead.

Press release in full after the break.

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July 2, 2008

Mercedes-Benz Canada reports best June, best second quarter and strongest first half year sales ever

Mercedes-Benz Canada reported today its best June ever with a total of 2,516 units registered for the month. Second quarter results were also the best ever with 7,376 units delivered, up 1,645 units or 28.7% compared to second quarter 2007. The June results bring the year-to-date total to 12,125 units; an increase of 24.9% compared to last year at this time and the best sales for the first half of any year in the company’s history.

A total of 2,105 Mercedes-Benz vehicles were delivered in June, representing a gain of 669 units or a 46.6% increase compared to June 2007 and bringing year-to-date growth to 25.8%. A total of 411 smart fortwos were sold in June, bringing the year-to-date total to 1,964 units, up 20.2% from last year at this time. The combined Mercedes-Benz and smart sales of 2,516 units represents an increase of 613 units or gains of 32.2% for the month.

Very strong B-Class, C-Class, CLS-Class, S-Class, SL-Class, M-Class and GL-Class model sales contributed to June’s success. The next generation All-New C-Class accounted for an impressive 845 units. The M-Class and the GL-Class retail deliveries were up respectively by 36.5% and 54.2% in June. The company’s diesel sales ratio was 61.2% for the month while the permanent all-wheel drive 4MATIC™ units accounted for 61.9% of the overall passenger car and light truck sales (excluding smart).

Total Mercedes-Benz passenger car sales of 1651 units were ahead by 566 units, a 52.2% gain for the month and up 28.6% on a year-to-date basis.

On the luxury light truck side, the M-Class, R-Class and GL-Class performed very well again in June with 454 sales and a gain of 29.3% compared to June 2007 results. Light trucks have shown a growth of 17.1% so far this year with 2,285 units delivered.

On the pre-owned side, the company reported 604 Mercedes-Benz units for the month of June. For the first half of 2008 3,681 pre-owned units have been delivered to customers. This represents an 18.8% increase against year-to-date June 2007 results and is another record for Mercedes-Benz Canada.

Marcus Breitschwerdt, President and CEO of Mercedes-Benz Canada said,” We’ve reached the half way point of 2008 and Mercedes-Benz Canada continues to break records. Selling over 12,100 units in six months is a significant accomplishment that we should all be very proud of. These results speak volumes to our exciting product range and also our dedicated team of professionals who have worked hard to achieve these remarkable results. It also shows the tremendous positive impact of the huge investments into the dealerships and the network that our dealers and Mercedes-Benz Canada have made over the last year. The year-to-date accomplishment augurs well as we enter the second half of this very exciting year.”

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Year-to-date, U.S. sales of Mercedes-Benz are up 0.9% at 119,279.

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The volume features: Kocky feat Rosanna, Chris Lee, Moka Only, Joel Alme, Chords and Canada’s probably most famous lady Alanis Morissette.

Mixed Tape Music Magazine is broadcasted at Mercedes-Benz’ IPTV-station Mercedes-Benz.tv, so head over and check them out.

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