DaimlerChrysler Reports Approximate First Year Revenues
28 December 1998
DaimlerChrysler Starts First Year with Record Figures; Group Revenues of Approximately $148 / DM 260 Billion -- An Increase of 13%
AUBURN HILLS, Mich. and STUTTGART, Germany, Dec. 27 --
DaimlerChrysler today issued the following:
-- Earnings for 1998 expected to be well above combined 1997 figures.
-- Eaton, Schrempp: "1999 expected to show substantial positive effects
of the merger."
DaimlerChrysler is expected to start its first business year with strong
increases in revenues, sales and earnings figures. Group revenues were up 13%
to approximately $148 / DM 260 billion, compared to the pro forma combined
figures for the former Daimler-Benz and Chrysler operations (1997 revenues of
$127.1 / DM 229.3 billion).
According to first preliminary figures, unit sales in the automotive
businesses of the DaimlerChrysler group will reach a total of approximately
4.4 million. Of this figure, over 3.0 million are from the Chrysler, Dodge,
Plymouth, and Jeep(R) car and truck brands, far more than 850,000 units are
from the Mercedes-Benz and smart passenger car brands, and 480,000 by the
commercial vehicles division of the group, including the Mercedes-Benz,
Freightliner, Setra and Sterling brands.
The 1998 earnings are also expected to reach a significantly higher level
than the pro forma combined individual figures for 1997, DaimlerChrysler said
in a first annual review.
The DaimlerChrysler Chairmen, Robert J. Eaton and Jurgen E. Schrempp, gave
a confident forecast for 1999: "The coming year is expected to show the first
substantial positive effects of the merger. Our integration teams are well on
their way to defining and beginning the synergy projects which will be
reflected in the 1999 business figures."
In 1998, DaimlerChrysler invested approximately $16.5 / DM 29 billion in
research and development and in property, plant and equipment, thus securing
profitable growth over the long term and continuing to be the most innovative
company in the automotive and transportation industry.
DaimlerChrysler will publish preliminary earnings figures for the 1998
business year in late February or early March 1999. The annual balance sheet
press conference and publication for the full annual report, on the basis of
the combined group, are scheduled for March 31, 1999. DaimlerChrysler
anticipates that quarterly results will be published within the first
four weeks after the respective quarterly period has ended.
Workforce increased by 13,000
Thanks to the continued market success of its products, the number of
employees grew by an additional 13,000 to 434,000 worldwide in 1998. More
than half of the workforce is located in Germany, one third in the U.S., and
the rest in other regions of the world.
Merger achieved in record time
With the first trading of its shares on the worldwide stock exchanges
beginning on November 17, 1998, only six months after the announcement,
DaimlerChrysler completed the merger in record time. Daimler-Benz and
Chrysler had started confidential negotiations about the merger in mid-January
1998. Huge support for this merger was proven by the shareholders' vote in
both the extraordinary shareholders meetings and the exchange offer, where
more than 98% of the Daimler-Benz shares have been tendered into
DaimlerChrysler shares enduring participation in the growth prospects of the
merged group.
Passenger Cars Mercedes-Benz, smart -- a year of many successes
Mercedes-Benz passenger cars set many new records during the year.
DaimlerChrysler posted revenues of more than $34 / DM 60 billion. Detailed
sales figures for the 1998 business year will be published during the North
American International Auto Show in Detroit in the first week of January,
1999.
The year saw DaimlerChrysler continue its Mercedes-Benz product offensive.
The Mercedes-Benz CLK convertible, the new S-class and the smart city coupe
were all successfully launched into the market. It was also decided in July
to produce the Mercedes-Benz Mayback in the Sindelfingen, Germany plant. Its
market launch is planned for 2003.
Chrysler, Dodge, Plymouth, Jeep
The combined revenues of the Chrysler, Dodge, Plymouth and Jeep brands,
included Chrysler financial services, reached a new record high with
approximately $65 / DM 115 billion (1997: $61.1 / DM 106 billion).
The new Chrysler 300M and LHS, and Jeep Grand Cherokee were introduced to
great reviews and sales results in 1998. The 300M won Motor Trend's "Car of
the Year" award, and the Grand Cherokee won the "4x4 of the Year" award from
Petersen's 4-Wheel & Off Road magazine and "Four Wheeler of the Year" from
Four Wheeler magazine.
Commercial Vehicles -- busier than ever
With their Mercedes-Benz, Freightliner, Sterling and Setra brands,
commercial vehicles became a major profit center in the new DaimlerChrysler
group in 1998. It was also the first time DaimlerChrysler sold more than
480,000 commercial vehicles in a year, achieving record revenues of more than
$25.5 / DM 45 billion. This performance consolidated the company's global
market leadership in trucks above six tons GVW and buses over eight tons GVW.
The new commercial vehicle brand, Sterling, founded on January 1, 1998,
ideally compliments the Freightliner product range in North America. In the
heavy duty segment, the market share of both brands in North America has risen
to more than 30 percent.
In mid-year it was also decided to produce a new "City Van", a vehicle in
the under-two tons GVW segment. This urban delivery van rounds out the
DaimlerChrysler van range at the lower end. Mercedes-Benz vans will be
available in all weight classes in the future.
The Powertrain business unit premiered in the marketplace at the
commercial vehicles IAA trade fair in Hanover, Germany. As well as scoring
its first competitive success, the unit also proved to be a hit with potential
clients.
At the end of July, DaimlerChrysler, Nissan Motor and Nissan Diesel signed
an agreement on joint development and production of light commercial vehicles.
This vehicle is targeted mainly at Japan, ASEAN, Latin America and emerging
market countries in the three to nine tons GVW range.
Aerospace and Services -- Continued Growth
DaimlerChrysler Aerospace (Dasa) increased its revenues to more than
$9.6 / DM 17 billion in 1998, compared with $8.8 / DM 15.3 billion in 1997,
and achieved new records in new orders. Dasa was especially successful in the
aviation sector with its participation in the European Airbus consortium.
With 516 aircraft, Airbus achieved a record in new orders and was able to
improve its global competitive position even further. The MTU Aeroengines
business was similarly successful.
Dasa has a major role in developing and producing the Ariane 5 booster
rocket, commercial use of which can not begin after the second successful
launch in October 1998. Dasa is also the main contractor for the complete
European module of the International Space Station. A model of it attracted
great public attention at the ILA Berlin air show. Also in 1998, series
production of the military aircraft Eurofighter started.
debis, DaimlerChrysler's services division, once again posted records in
1998. The company increased revenues by almost 20 percent to approximately
$10.2 / DM 18 billion from nearly $9 / DM 15.5 billion in 1997. The number of
employees increased by far more than 3,000 to over 18,000. The three large
debis businesses -- Financial Services, IT Services and Telecommunications and
Media Services -- grew significantly faster than the very dynamic services
markets as a whole. debis achieved more than half of its revenues abroad, a
clear sign of the continuing growth in the internationalization of the
Services division.
Other businesses -- Adtranz, MTU/Diesel Engines, TEMIC
Adtranz, the rail systems joint venture between ABB and DaimlerChrysler,
will continue the implementation of its restructuring program with the aim to
decisively improve the company's economic situation. An important step
towards this goal has been the introduction of a platform concept in March
1998, including seven product platforms, setting a trend in the rail systems
business. Through major new contracts, including 400 locomotives for Deutsche
Bahn Cargo, and the turnkey mass transit system for the Portuguese city of
Oporto, Adtranz was able to further strengthen its leading market position.
Adtranz expects to surpass the 1997 revenue figure of $3.7 / DM 6.4 billion;
50% of which are attributable to DaimlerChrysler.
The MTU/Diesel Engines business unit increased its revenues from less than
$1 / over DM 1.7 billion to more than $1 / DM 1.8 billion. This was mostly
achieved through revenue increases in Europe and North America, and despite
more difficult market conditions in East and Southeast Asia. The growth was
driven mainly by stepped up expansion of the commercial market segments and
the introduction of a new diesel engine series. MTU Marine Engines was also
able to maintain its market leadership. In all, MTU/Diesel Engines hired
150 additional employees in 1998.
The Automotive Electronics business unit (TEMIC) posted above average
growth in revenues and new orders received in 1998. Over the fiscal year,
TEMIC received orders of almost $0.9 / DM 1.5 billion, approximately
20 percent more than in 1997. Revenues increased by more than 30 percent to
about $0.8 / over DM 1.4 billion. In addition to being far above the industry
average, TEMIC's growth also makes the company one of the fastest expanding
automotive electronics enterprises.
** 1998 figures are calculated on a US-$/DM exchange rate of 1,76.
This release contains certain forward-looking statements. Such statements
reflect the current view of the company with respect to future events and are
subject to certain risks, uncertainties and assumptions. Many factors could
cause actual results to be materially different, including, among others,
changes in general economic and business conditions, changes in currency
exchange rates, introduction of competing products by other companies, lack of
acceptance of new products or services by DaimlerChrysler AG's targeted
customers, changes in business strategy and risks that the synergies
anticipated from the merger may not be fully realized. Should one or more of
these risks or uncertainties materialize, actual results may vary materially
from those described herein.