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Daimler CEO Zetsche at the Annual Meeting: 'We Intend to Remain a Strong Company Also in Times of Weak Markets'

Posted on: Wednesday, 8 April 2009, 01:35 CDT

- 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 euro per share

BERLIN, April 8 /PRNewswire-FirstCall/ -- 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 euro. Operating profit on continuing operations amounted to 6.2 billion euro. Including all special factors, in particular the charges on earnings of 3.2 billion euro from the remaining 19.9% equity interest in Chrysler, operating profit amounted to just 2.7 billion euro. Net profit for the year 2008 was 1.4 billion euro.

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 euro per share be distributed (prior year: 2.00 euro). 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.

Further information on Daimler is available on the Internet: www.media.daimler.com

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 lack of improvement or a further deterioration of global economic conditions; a continuation or worsening of the turmoil in the credit and financial markets, which could result in ongoing high borrowing costs or limit our funding flexibility; changes in currency exchange rates and interest rates; 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 further 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; the business outlook of Chrysler, in which we hold an equity interest and some of whose obligations we have guaranteed; the business outlook of companies in which we hold an equity interest, most notably EADS; 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.

About Daimler

Daimler AG, Stuttgart, with its Mercedes-Benz Cars, Daimler Trucks and Daimler Financial Services divisions and the Mercedes-Benz Vans and Daimler Buses units, is a globally leading supplier of premium automobiles and the world's market leader for heavy-duty and medium-duty trucks as well as buses. Daimler Financial Services provides a full range of financial services including financing, leasing, insurance and fleet management.

Daimler sells its products in nearly all the countries of the world and has production facilities on five continents. The founders of the company, Gottlieb Daimler and Carl Benz, made history with the invention of the automobile in 1886 thereafter. As a pioneer of automobile production, Daimler feels inspired and obliged to fulfill its responsibility to society and the environment and to make future mobility safe and sustainable - with groundbreaking technologies and high-quality products. Today's brand portfolio includes not only Mercedes-Benz, the world's most valuable automotive brand, but also the brands smart, AMG, Maybach, Freightliner, Western Star, Mitsubishi Fuso, Setra, Orion and Thomas Built Buses. The company is listed on the stock exchanges in Frankfurt, New York and Stuttgart (stock-exchange abbreviation DAI).

In the year 2008, the Daimler Group employed more than 270,000 people and sold 2.1 million vehicles. Total revenue amounted to 95.9 billion euro and EBIT was 2.7 billion euro. As a company that constantly aims to deliver first-class performance, Daimler strives to achieve sustainable growth and profitability at the level of the best in the industry.

SOURCE Daimler Communications

Source: PR Newswire

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