DaimlerChrysler on Target With Steps to Improve Earnings
* All first quarter results consistent with the figures announced at the
Annual Press Conference
* Revenues of Euro 35.5 billion/$31.2 billion (-13%), in comparative
terms -9%
* Operating Loss of Euro 3.8 billion/$3.3 billion (first quarter 2000:
Operating Profit Euro 2.5) due to operating losses at the Chrysler
Group and Freightliner and substantial non-recurring expenditure
totaling Euro 3.1 billion/$2.7 billion.
* Operating Loss without one-time effects -- Euro 0.6 billion/
$.53 billion (first quarter 2000: Operating Profit Euro 2.5 billion)
* Adjusted for one-time effects, Net Income totaled - Euro 0.4 billion/
-$.33 billion, or - Euro 0.37/-$.33 (Euro 1.69) per share
* Once again record sales, revenues and earnings at Mercedes-Benz
Passenger Cars & smart
* Implementation of the turnaround programs at the Chrysler Group and
Mitsubishi Motors proceeding according to plan
STUTTGART, Germany and AUBURN HILLS, Mich., April 25 Key
figures for DaimlerChrysler (stock symbol DCX) for the first quarter of 2001
are in line with those projected at the Annual Press Conference on February
26, 2001. Substantial non-recurring expenditure at the Chrysler Group and
Mitsubishi Motors reduced earnings by a total of Euro 3.1 billion/$2.7
billion. These one-time effects and operating losses at the Chrysler Group
and Freightliner led to an Operating Loss of almost Euro 3.8 billion/$3.3
billion (first quarter 2000: Operating Profit of +Euro 2.5 billion). Without
one-time effects the Operating Loss was Euro 0.6 billion/$.54 billion.
As expected, the absence of revenues from the aerospace activities -- with
the exception of the MTU Aero Engines business unit -- and debis IT Services,
both of which became part of new ventures in the course of 2000, and fewer
vehicle sales, led to a decrease in revenues. Revenues decreased by 13% to
Euro 35.5 billion/$31.2 billion. Adjusted for changes in the consolidated
group, revenues were 9% below the same period in 2000.
Lower earnings a result of substantial non-recurring expenditure
The decrease in earnings in the operative business and the large negative one-
time effects led to lower group earnings as well. Net income, including one-
time effects, was - Euro 2.4 billion/-$2.1 billion in the first quarter.
Excluding the one-time effects, net income of - Euro 0.4 billion/-$.33
billion, or - Euro 0.37/ -$.33 per share, were significantly below the level
of the previous year.
At the end of the first quarter of 2001, DaimlerChrysler had 410,500
employees worldwide (first quarter of 2000: 467,000). The decrease was
primarily due to the exclusion of employees of the former aerospace activities
and debis IT Services. In the operative areas, workforce reductions occurred
primarily at the Chrysler Group and Freightliner.
Turnaround programs proceeding according to plan
In order to re-establish Chrysler Group's long-term profitability,
DaimlerChrysler has introduced a comprehensive turnaround program. The
program is designed to reduce fixed and variable costs and generate additional
revenues. Mitsubishi Motors has also begun a turnaround program designed to
reduce fixed and variable costs as well as production capacities. This also
includes plans to eliminate 9,500 jobs. In view of the slump in the market
for heavy trucks in the U.S., it will be necessary to reduce production
capacities, workforce numbers and costs at Freightliner as well.
Outlook for the year 2001 as a whole
DaimlerChrysler currently expects to post revenues of Euro 145 billion/
$127.5 billion for the year 2001 as a whole. Due to the deconsolidation of
the former aerospace activities (with the exception of the MTU Aero Engines
business unit) and debis IT Services as well as the expected lower sales at
Chrysler Group and Freightliner, the revenue forecast is below last year's
figure of Euro 162.4 billion. In 2001, Operating Profit adjusted for one-time
effects are projected to be in the range of Euro 1.2 to Euro 1.7 billion/$1.1
to $1.5 billion, as announced before. Positive one-time effects from the sale
of shares in TEMIC, debitel and the sale of Adtranz will offset the one-time
charges at the Chrysler Group and Mitsubishi Motors. DaimlerChrysler is
confident that it can make a sustained improvement in earnings with the
measures being taken, and that as early as 2003, earnings will return to 1999
levels.
In the first quarter of 2001, the Mercedes-Benz Passenger Cars & smart
business increased revenues by 13% to Euro 11.2 billion/$9.8 billion.
Operating profit of Euro 0.7 billion/$.6 billion exceeded the high figure of
last year by 13%. Mercedes-Benz Passenger Cars sold 266,400 vehicles, an
increase of 10%, and was thus able to set a new sales record for the eighth
year in a row. Demand in the Western European markets outside Germany was
especially strong (+19%). But in Germany and the U.S., it was also once again
possible to surpass last year's high level by a small margin.
Smart sales increased by 36% to 25,100 vehicles in the first three months
of 2001. Following the successful introduction of the smart in Great Britain
and Greece, sales have now been extended to Japan as well.
In the first quarter, Chrysler Group registered a 10% drop in retail
sales, primarily because of the weaker U.S. market. Unit sales decreased 28%
to 660,900 vehicles. Together with the lower production level in the fourth
quarter of 2000 and in the first quarter of 2001 this led to a substantial
reduction in dealer inventories. At Euro 13.6 billion/$12.0 billion, revenues
remained below last year's high level. On a U.S. dollar basis, revenues
decreased by 33%. The significantly lower vehicle sales combined with higher
product-related costs led to an operating loss of Euro 1.4 billion/$1.2
billion. Sales of the PT Cruiser, which was introduced last year, remained
very strong. With 54,700 vehicles sold, this model registered a significant
increase in the first three months. In the first quarter of 2000, 8,100 units
were sold due to the initial launch of the product. Implementation of the
turnaround program is proceeding according to plan. Among salaried employees,
the majority of the workforce reductions have been made.
In the Commercial Vehicles business, sales decreased by 12% to 119,300
units in the first quarter. In the case of Mercedes-Benz trucks, sales of
26,200 units were at last year's level. Declines in Germany and the effects
of the financial crisis in Turkey were offset by generally positive results in
Western and Eastern Europe and overseas. Business at Freightliner, Sterling
and Thomas Built Buses was characterized above all by a NAFTA market for heavy
trucks that has shrunk by more than 50% since 1999. Sales at this business
unit were down nearly 50% to 25,100 units (2000: 47,500). Revenues at the
Commercial Vehicles business reached Euro 6.5 billion/$5.7 billion (2000: Euro
7.0 billion). The gains in Western Europe (+10%) only partially offset the
drop in revenues in the U.S. (-31%). An Operating Loss of Euro 0.1 billion/
$.1 billion was due mainly to the negative results at Freightliner.
Services achieved revenues of Euro 4.1 billion/$3.6 billion in the first
quarter, or 28% higher than last year when adjusted for debis IT Services.
Operating Profit of Euro 441 million/$388 million includes non-recurring
income of Euro 292 million/$257 million from the sale of the remaining debitel
shares. Adjusted for this one-time effect, operating profit was Euro 149
million/$131 million, compared to Euro 195 million last year. In financial
services, contract volume rose 16% to Euro 132.4 billion/$116.4 billion.
Other. The Rail Systems (Adtranz) business unit increased revenues by 6%
to Euro 752 million/$661 million in the first quarter. New orders reached
Euro 746 million/$656 million (first quarter of 2000: Euro 618 million). On
April 3, the European antitrust authorities approved the sale of Adtranz to
the international aviation and railway technology group Bombardier. The
business will be transferred to Bombardier on May 1, 2001.
Revenues at the Automotive Electronics (TEMIC) unit increased by 12% to
Euro 294 million/$259 million in the first quarter, whereas the volume of
orders received fell by 8% to Euro 276 million/$243 million. In an
acquisition subject to the approval by the appropriate committees and the
antitrust authorities, Continental AG has purchased a 60% stake in TEMIC,
effective April 1, 2001, and taken over the management of the company. The
transaction is expected to close in the second quarter of 2001.
MTU Aero Engines increased revenues by 26% to Euro 553 million/$486
million. At Euro 576 million/$507 million, the volume of new orders was less
than the amount last year, which was characterized by exceptionally large
contracts.
At EADS, in which DaimlerChrysler has a 33% stake, incoming orders
remained high in the first quarter and again significantly outpaced growth in
revenues. The current contract volume serves as a guarantee of employment for
more than five years. Airbus registered incoming orders for 117 aircraft
(2000: 59) in the first quarter. At the end of March, the volume of orders
stood at 1,660 aircraft.
For its 2001 financial year, which ends on March 31, 2002, Mitsubishi
Motors expects to break-even at an operating level. This will be accomplished
mainly through considerable reductions in fixed and materials costs and the
introduction of two new models in June and in the fall of this year. These
steps will substantially improve Mitsubishi Motors' competitive position. Now
that DaimlerChrysler has acquired 3.3% of Mitsubishi Motors' shares from
Volvo, new, global perspectives will be opened up for Mitsubishi Motors as a
result of cooperation with DaimlerChrysler in the field of commercial
vehicles.
Figures for the 1st Quarter 2001
DaimlerChrysler Group Q1 2001 Q1 2000 01:00
(Euro) U.S.-$ (Euro) Change(1)
Operating profit, in mill. (3,750) (3,298) 2,452 -253%
Operating profit, adjusted(2),
in mill. (610) (536) 2,452 -125%
Net income, in mill. (2,357) (2,073) 1,705 -238%
Net income, adjusted(2), in mill. (373) (328) 1,693 -122%
Earnings per share (EPS) (2.35) (2.07) 1.70 -238%
EPS, adjusted(2) (0.37) (0.33) 1.69 -122%
Revenues, in mill. 35,525 31,241 40,963 -13%
Employees 410,451 466,964 -12%
Operating Profit by Segments Q1 2001 Q1 2000 01:00
in millions (Euro) U.S.-$ (Euro) Change(1)
Mercedes-Benz Passenger Cars &
smart 670 589 591 +13%
Chrysler Group (4,456) (3,919) 1,353 -429%
Chrysler Group, adjusted(2) (1,409) (1,239) 1,353 -204%
Commercial Vehicles (138) (121) 258 -153%
Services 441 388 195 +126%
Services, adjusted(2) 149 131 195 -24%
Others (318) (280) 32 -1,094%
Others, adjusted(2) 67 59 32 +109%
Revenues by Segments Q1 2001 Q1 2000 01:00
in millions (Euro) U.S.-$ (Euro) Change(1)
Mercedes-Benz Passenger Cars &
smart 11,172 9,825 9,894 +13%
Chrysler Group 13,622 11,979 18,971 -28%
Commercial Vehicles 6,534 5,746 6,965 -6%
Services 4,050 3,562 3,956 +2%
Others 1,699 1,494 2,876 -41%
Unit Sales by Segments Q1 2001 Q1 2000 01:00
Mercedes-Benz Passenger Cars &
smart 291,500 260,400 +12%
Chrysler Group 660,900 923,600 -28%
Commercial Vehicles 119,300 136,200 -12%
1) based on euro figures
2) excluding one-time effects
Exchange rate used for conversion: euro 1 = U.S.-$ 0.8794 (Noon Buying
Rate of the Federal Reserve Bank of New York on March 30, 2001).
