DaimlerChrysler Profit Improvement in the Second Quarter in
Line With Plan
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-- After a loss in the first quarter, second-quarter Operating Profit
adjusted for one-time effects of $0.6 billion (Q2 2000: $2.2 billion)
-- Net Income adjusted for one-time effects of $0.5 billion (Q2 2000:
$1.5 billion); adjusted earnings per share of $0.45 (Q2 2000: $1.47)
-- Continued success for Mercedes-Benz Passenger Cars & smart
-- Significantly improved operating performance at Chrysler Group due to
the increase in Unit Sales over the first quarter and implementation of
turnaround plan
-- Commercial Vehicles division substantially impacted by situation in
North America
STUTTGART, Germany and AUBURN HILLS, Mich., July 20 After
a loss in the first quarter, DaimlerChrysler again achieved a
positive result in the second quarter of 2001. This is primarily a result of
the substantial reduction of losses at Chrysler Group, which fulfilled all of
the milestones set for the first half of 2001.
The Group's Operating Profit, including a one-time effect of $0.2 billion
as a result of the gain in the sale of 60% of the shares in TEMIC, the
automotive electronics subsidiary, was $0.8 billion (Q2 2000: $2.2 billion).
Net Income, including one-time effects, was $0.6 billion (Q2 2000: $1.5
billion) and Earnings Per Share were $0.62 (Q2 2000: $1.47). Excluding one-
time effects, Net Income was $0.5 billion (Q2 2000: $1.5 billion) or $0.45
(Q2 2000: $1.47) per share.
1.3 million vehicles sold worldwide
DaimlerChrysler sold 1.3 million vehicles worldwide in the second quarter
of 2001 (Q2 2000: 1.3 million). While Mercedes-Benz Passenger Cars & smart
achieved a 6% increase in unit sales, Chrysler Group reported a 4% decline in
shipments to dealers due to market conditions in North America. As a result
of the fall in demand for heavy trucks in North America, the Commercial
Vehicles division also reported a decline in unit sales of 12%.
As expected, the overall Group Revenues fell in the second quarter by 5%
to $35.1 billion. This is due to the fact that the prior year's figures
included the Revenues of Dasa, debis Systemhaus and Automotive Electronics
(TEMIC). From May 2001, Adtranz was also deconsolidated. Adjusted for these
changes in the consolidated Group, Revenues were 3% higher than in the
previous year.
In the first half of 2001, Group Revenues of $65.2 billion were 9% lower
than in the first six months of 2000. Adjusted for changes in the
consolidated group, Revenues decreased by 3%. Operating Profit, adjusted for
one-time effects, was $0.1 billion (1st half of 2000: $4.3 billion). There
was adjusted Net Income of $0.1 billion (H1 2000: $2.9 billion) and adjusted
Earnings Per Share of $0.14 (H1 2000: $2.91).
Improved Commercial Vehicles position in Asia
In the period under review, DaimlerChrysler significantly improved its
strategic position in the Commercial Vehicles business in Asia. Through the
acquisition of Volvo's 3.3% equity interest in Mitsubishi Motors (MMC),
including all rights and product development work from the previous
cooperation between MMC and Volvo in the area of commercial vehicles,
DaimlerChrysler has substantially strengthened its competitive position. The
transaction was completed in June 2001.
At the end of June, DaimlerChrysler announced a joint venture with Hyundai
Motor in South Korea to produce Mercedes-Benz diesel engines for commercial
vehicles. This is the first cooperation with Hyundai Motor in the field of
commercial vehicles.
Mercedes-Benz Passenger Cars & smart with increased Unit Sales, Revenues
and Operating Profit
The Mercedes-Benz Passenger Cars & smart division continued its growth
course in the second quarter, despite the generally softening automobile
market. Unit sales increased by 6% to 328,800 vehicles, while revenues were
up 10% to $10.6 billion and Operating Profit, excluding one-time effects, rose
by 10% to $703 million.
Worldwide, 295,100 Mercedes-Benz cars were sold, 7% more than in the
second quarter of 2000. Due to the high demand for the division's cars,
particularly for the C-Class sedans, sport coupes and station wagons,
Mercedes-Benz unit sales in Western Europe increased by 11% to 197,800
vehicles. In the contracting German market, a growth rate of 7% to 109,000
vehicles was particularly impressive. This resulted in Mercedes-Benz's market
share rising to 12%. In the U.S. and Japan, Mercedes-Benz did not quite equal
the high sales levels of the prior year. But, due to the availability of all
C-Class variants, growth is expected for those markets in the second half of
the year.
There were unit sales of 33,700 smart cars, which was slightly more than
the very high figure in the previous year.
Chrysler Group's turnaround proceeds according to plan
As a result of cost savings achieved by the turnaround plan and the
increase in Unit Sales over the first quarter, Chrysler Group's Operating Loss
excluding one-time effects of -$0.1 billion was a significant improvement over
the previous quarter (-$1.2 billion).
But there was a negative impact from continuing high U.S. industry
marketing costs and a decline in unit sales compared with the previous year.
Second-quarter shipments to dealers fell by 4% compared with the previous year
to 821,000 vehicles. Revenues of $15.5 billion were 1% higher than in the
year before. Measured on a US dollar basis Revenues declined by 5%.
After declines in April and May, Chrysler Group in June recorded a 1%
increase over the June 2000 figure in retail sales in the U.S.
Sales of the successful Chrysler PT Cruiser were still high, with
shipments of 44,400 vehicles in the second quarter, and there was a strong 16%
increase in unit sales of minivans. In April, Chrysler Group started
production of the new Jeep Liberty in the newly constructed assembly plant in
Toledo, Ohio. By the end of June, dealers had already ordered 60,000 units,
which is an even better sales start than with the Chrysler PT Cruiser.
Performance of Commercial Vehicles impacted by situation in North America
The Commercial Vehicles division reported a 12% decline in unit sales to
127,900 vehicles in the second quarter. Revenues of $6.2 billion were 5%
below the previous year's figure. After a loss in the first quarter,
Operating Profit, excluding one-time effects, of $108 million, was positive
again (Q2 2000: $344 million), but still affected by the difficult situation
in North America.
At Freightliner, the new management is accelerating and expanding the
company's turnaround plan. This restructuring plan will be presented this
fall.
At Freightliner, Sterling and Thomas Built Buses Unit Sales fell by 35% to
28,500 vehicles as a result of the decrease in the market for heavy trucks in
North America.
Due to reduced market demand in Europe and the collapse of the markets in
Turkey and Argentina, unit sales of 26,100 Mercedes-Benz trucks did not equal
the previous year's figure (-14%). The difficult market situation in Turkey
was also the reason why sales of Mercedes-Benz and Setra buses declined by 4%
to 7,200 units.
The Mercedes-Benz Vans unit continued its positive business trend, with
unit sales increasing by 2% to 62,700 vehicles.
Refocus for Services
DaimlerChrysler Services generated second-quarter revenues of $3.7
billion; excluding IT Services, revenues were 14% higher than in the year
before. As a result of the fall in demand for both heavy trucks and used-
vehicle prices in North America, Operating Profit of $86 million was lower
than in the year before. Contract volume rose to $119.8 billion (end of Q2
2000: $100.6 billion), of which $11 billion resulted from exchange-rate
movements.
In February 2001, DaimlerChrysler Services initiated a project to refocus
the division and to increase its profitability. One of the ways in which this
will be done is by further improving the cooperation between Financial
Services and the vehicle divisions' sales departments.
Mitsubishi Motors Corporation
As had been expected, in the first quarter of the company's financial
year, which began on April 1, 2001, unit sales by Mitsubishi vehicles declined
significantly. As part of the turnaround plan, the new management has
implemented cost-cutting measures as well as a new organizational and
management structure. Breakeven is anticipated in the current financial year.
Other businesses
MTU Aero Engines increased its revenues by 28% to $638 million. It
reported particularly strong increases in the sale and maintenance of engines
for civil aircraft and of gas turbines.
The European Aeronautic Defence and Space Company (EADS), in which
DaimlerChrysler has a stake of 33%, had an order backlog of about $144 billion
at the end of the second quarter. These orders ensure employment for the next
six years.
Outlook for full-year 2001
Based on the developments expected for the international automotive
markets and on current exchange rates, DaimlerChrysler assumes that Operating
Profit, adjusted for one-time effects, for full-year 2001 will be within the
announced range of $1.0-1.4 billion.
Mercedes-Benz Passenger Cars & smart will again exceed the previous year's
high figures for unit sales, revenues and earnings, due to an extremely
attractive product range, which will be upgraded again in the fall with the
new SL roadster and the revised M-Class.
Weaker demand for automobiles in the U.S. will lead to a distinct decline
in unit sales by Chrysler Group. The continuation of difficult market
conditions remains a major challenge.
There will be a decline in unit sales and revenues for the Commercial
Vehicles division as a result of the market slump in North America and the
market downturn in Western Europe. Operating Profit will decrease
significantly because of the situation in North America. This fall the
division will further expand its attractive product range with the Vaneo
compact van and the new Mercedes-Benz Axor range of trucks.
The Services division is expected to generate revenues at a similar level
to last year. Operating profit, excluding one-time effects, will probably be
lower than the level achieved in 2000.
This document contains forward-looking statements that reflect the current
views of DaimlerChrysler management with respect to future events. The words
"anticipate," "believe," "estimate," "expect," "intend," "may," "plan,"
"project" and "should" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to risks and
uncertainties, including, but not limited to: changes in general economic and
business conditions, especially an economic downturn in Europe or North
America; changes in currency exchange rates and interest rates; introduction
of competing products; lack of acceptance of new products or services,
including increased competitive pressures on the general level of sales
incentives and pricing flexibility; inability to implement the turnaround
plans for Chrysler Group, Freightliner and Mitsubishi Motors promptly and
successfully, especially an inability to meet revenue enhancement, efficiency
and cost reduction initiatives; and decline in resale prices of used vehicles.
If any of these or other risks and uncertainties occur (some of which are
described under the heading "Risk Factors" in DaimlerChrysler's most recent
Annual Report on Form 20-F filed with the Securities and Exchange Commission),
or if the assumptions underlying any of these statements prove incorrect, then
actual results may be materially different from those expressed or implied by
such statements. DaimlerChrysler does not intend or assume any obligation to
update these forward-looking statements.
Figures for the 2nd Quarter 2001/First Half-Year 2001
U.S. dollar figures - convenience translation
All values, including the 2000 figures, are converted from
euro figures with the exchange rate of euro 1= U.S.-$ 0.8474
(Noon Buying Rate of the Federal Reserve Bank of New York on June 29, 2001).
DaimlerChrysler Group Q2 Q2 Change YTD YTD Change
values in U.S.-$ 2001 2000 01:00 2001 2000 01:00
Operating profit,
in millions 791 2,225 -64% (2,386) 4,303 - .
Operating profit,
adjusted(1), in
millions 614 2,225 -72% 97 4,303 -98%
Net income,
in millions 619 1,481 -58% (1,378) 2,926 - .
Net income,
adjusted(1),
in millions 453 1,481 -69% 137 2,916 -95%
Earnings per
share (EPS) 0.62 1.47 -58% (1.37) 2.92 - .
EPS, adjusted(1) 0.45 1.47 -70% 0.14 2.91 -95%
Revenues,
in millions 35,128 37,064 -5% 65,232 71,776 -9%
Employees 382,558 474,849 -19% 382,558 474,849 -19%
Operating Profit
by Segments(1)
in millions Q2 Q2 Change YTD YTD Change
of U.S.-$ 2001 2000 01:00 2001 2000 01:00
Mercedes-Benz
Passenger Cars &
smart 703 638 +10% 1,271 1,139 +12%
Chrysler Group (125) 986 - . (1,319) 2,132 - .
Commercial Vehicles 108 344 -69% (9) 563 - .
Services 86 186 -54% 212 352 -40%
Others (48) 132 - . 8 159 -95%
Revenues by Segments
in millions Q2 Q2 Change YTD YTD Change
of U.S.-$ 2001 2000 01:00 2001 2000 01:00
Mercedes-Benz
Passenger Cars &
smart 10,592 9,671 +10% 20,059 18,056 +11%
Chrysler Group 15,457 15,285 +1% 27,001 31,361 -14%
Commercial Vehicles 6,206 6,531 -5% 11,742 12,433 -6%
Services 3,663 3,885 -6% 7,095 7,238 -2%
Others 988 3,377 -71% 2,428 5,814 -58%
Unit Sales
by Segments Q2 2001 Q2 2000 01:00 YTD 2001 YTD 2000 01:00
Mercedes-Benz
Passenger Cars &
smart 328,800 309,700 +6% 620,300 570,100 +9%
Chrysler Group 821,000 851,100 -4% 1,481,900 1,774,700 -16%
Commercial
Vehicles 127,900 145,100 -12% 247,100 281,300 -12%
1) excluding one-time effects
