Daimler-Benz Boosts Revenues to April by 22 Percent
27 May 1998
Daimler-Benz Boosts Revenues to April by 22 Percent
-- Juergen E. Schrempp: "Daimler-Benz is pursuing a strategy of profitable
growth and thereby safeguarding jobs"
-- Forecast of revenues for full year 1998 increased to DM 140 billion
-- Capital increase from June 12 to 25, 1998
STUTTGART, Germany, May 27 -- Daimler-Benz reports strong
growth during the first four months of 1998. In the period from January
through April, the company boosted revenues -- calculated on a comparable
basis -- to DM 43.8 billion, up 22 percent on the volume for the same period
last year (DM 35.9 billion). As Daimler-Benz reported in Stuttgart at its
102nd annual shareholders meeting on May 27, 1998, the strongest growth was
recorded in the U.S.A., where revenues rose by 38 percent to DM 10.3 billion.
"Daimler-Benz will continue to grow profitably in 1998," said Daimler-Benz
Chairman Juergen E. Schrempp at the start of his address to shareholders in
Stuttgart's Hanns-Martin Schleyer Hall. "That is why we have increased our
forecast of revenues for this year to DM 140 billion. This performance will
permit us to create more jobs and offer additional trainee positions."
Addressing the proposed merger with U.S. automobile manufacturer Chrysler,
Schrempp said: "DaimlerChrysler AG will be the world's third largest
motor-vehicle manufacturer, and will have a better global position than any
other car maker. With our combined financial and technological strengths, and
with our excellently educated and trained employees, we meet all the
prerequisites to be the automotive industry's pacesetter in the 21st century.
The product lines of the two companies complement each other ideally, and our
geographical presence is a perfect match. The merger into DaimlerChrysler
means growth that will safeguard jobs as well as create new ones."
Shareholders will not take any decisions on the proposed merger between
Daimler-Benz and Chrysler at the annual meeting. As already planned, both
Daimler-Benz and Chrysler shareholders will be asked to approve the proposal
at extraordinary shareholder meetings scheduled for fall of this year.
Five thousand new jobs - trainee numbers again to rise by 10 percent
Based on the continuing market success, Daimler-Benz will be able to take
on around 5,000 new employees in the course of 1998, having already created
12,300 new jobs last year. In addition, traineeships at Daimler-Benz are
again set to rise by 10 percent, an increase that will take the number of new
trainees hired in the current year to 3,300.
Strong growth at all divisions
The Mercedes-Benz product offensive continues to have an extremely
positive impact on sales at the Passenger Cars Division. In the months from
January through April 1998, revenues rose to almost DM 19.9 billion, an
increase of 23 percent on the volume for the same period last year
(DM 16.2 billion). Over the same period, worldwide sales rose by 25 percent
to 273,300 Mercedes-Benz vehicles (last year: 219,500), a performance largely
boosted by the new models CLK, SLK and the M-class. Thanks to an increase in
production capacity for the successful SLK roadster, deliveries to customers
increased to 18,900 vehicles, a rise of 58 percent on the volume for the same
period last year (11,900). In the first 10 weeks since deliveries of the
modified Mercedes-Benz A-class commenced, some 18,700 vehicles are already on
their way to customers.
Revenues in the Mercedes-Benz, Freightliner, Setra and Sterling brands at
the Commercial Vehicles Division rose to DM 14.1 billion, an increase of
23 percent on the volume for the same period last year (DM 11.4 billion).
Particularly successful performers during the first four months of the year
have been those overseas companies operating in the NAFTA region, where
revenues rose by 29 percent to DM 4 billion as compared to DM 3.7 billion for
Germany, an increase of 15 percent. In total, sales increased to
148,400 commercial vehicles, up by 22 percent on the volume for the same
period last year (121,300), with fairly even growth recorded across the entire
range of the product series.
Revenues at the Aerospace Division rose from DM 3.9 billion to
DM 4.6 billion, an increase of 18 percent largely generated by positive
developments in the European and North American markets. Incoming orders at
Dasa soared by 191 percent to reach DM 10.3 billion, a performance that
reflects the extremely lively demand in the civil aircraft sector, where
orders received increased fivefold to DM 3.9 billion.
With revenues up to DM 5.7 billion, an increase of 21 percent on the
volume for the same period last year (DM 4.7 billion), the Services Division
continues to show strong growth. This trend was particularly pronounced in EU
countries and in the NAFTA region. Workforce numbers at Daimler-Benz
InterServices (debis) again registered strong growth, increasing in the first
four months of 1998 by 10 percent to over 16,400 employees.
At the Directly Managed Businesses, Adtranz boosted revenues by almost
11 percent to DM 0.9 billion (representing the 50 percent share of
Daimler-Benz), while Automotive Electronics increased by 54 percent to
DM 0.5 billion and MTU Diesel Engines by nine percent also to DM 0.5 billion.
Special pay-out and capital increase scheduled for June
Today's annual meeting of Daimler-Benz shareholders is to take a decision
on the proposed special pay-out, announced in March 1998. The purpose of the
special pay-out is to pass on to shareholders retained earnings of
DM 7.4 billion. The DM 2.9 billion reduction in corporation tax generated by
the transfer will also be handed on to shareholders. As a result of this
special pay-out, shareholders will receive a sum of DM 20 per share in
addition to this year's dividend of DM 1.60 per share. Shareholders liable to
pay tax in Germany will also receive a corporation tax credit of DM 8.57 per
share over and above the special pay-out sum as well as DM 0.69 in addition to
the dividend of DM 1,60. The dividend is to be paid on May 28, 1998, with
payment of the special pay-out to follow on June 15, 1998.
As already announced, the subsequent capital increase is intended to
replenish company equity distributed in the special pay-out. Daimler-Benz
will offer shareholders to participate in the capital increase from June 12 to
25, 1998. Trading in subscription rights will end on June 23. Shareholders
therefore have the opportunity to reinvest part of the special pay-out of
DM 20 per share they receive in Daimler-Benz stock and thus continue to
benefit from the company's good prospects.
The subsequent capital increase should see a sum of around DM 7.4 billion
-- about the same amount as the retained earnings distributed to shareholders
-- flow back into the company's equity. By participating in the rights issue,
shareholders can maintain their stake in the company without, as a general
rule, having to invest more money than that received as a result of the
special pay-out.
The dates for the Daimler-Benz special pay-out and subsequent capital
increase at a glance:
May 27, 1998 Daimler-Benz annual shareholders meeting takes decision
on special pay-out
May 28, 1998 Payment of the dividend of DM 1.60 per share;
Ex-dividend-date for both dividend and special pay-out
of DM 20 per share
June 5, 1998 At close of trading in Germany: release of details on
the capital increase (subscription ratio and price)
From June 8, 1998 Rights offering sent to Daimler-Benz shareholders
June 12, 1998 Start of subscription period and trading in
subscription rights
June 15, 1998 Payment of DM 20 per share special pay-out
June 23, 1998 End of trading in subscription rights
June 25, 1998 End of subscription period