DaimlerChrysler Reports Strong First Quarter 1999
28 April 1999
DaimlerChrysler Reports Strong First Quarter 1999
* Operating profit improved by 16%, adjusted net income by 23%
* Robert J. Eaton: "Most integration projects are running ahead of
schedule"
* Juergen E. Schrempp: "We are off to a great start in 1999"
AUBURN HILLS, Mich., and STUTTGART, Germany, April 28 -- For
January to March 1999, operating profit at DaimlerChrysler
increased to Euro 2.8 billion, up 16% compared with the same period last year.
The company reports that worldwide revenues were up 10% compared with the
first quarter 1998 to Euro 35.0 billion. All business divisions contributed
to the increase in revenues and profits. On the basis of the first quarter of
1999, DaimlerChrysler expects further growth and improved profits for the full
year.
Adjusted for one-time effects, the operating profit amounted to Euro 2.5
billion, also a growth of 16%. Net income increased by 23% to Euro 1.6
billion, calculated on a comparable basis. This net income figure is adjusted
for one-time effects like the impact of the 1999 tax reform in Germany and the
gain from the initial public offering (IPO) of debitel. Accordingly adjusted
earnings per share were Euro 1.64, up from Euro 1.43 in the first quarter of
1998. Return on Net Assets (RONA) is reported on a yearly, rather than a
quarterly basis.
DaimlerChrysler Chairman Robert J. Eaton stated, "We are ahead of schedule
in our integration process. Our teams are well on their way to achieving the
expected synergies that will contribute to the success of the merger."
DaimlerChrysler Chairman Juergen E. Schrempp said, "The first quarter
figures support our confidence for 1999. We expect all business units to
increase revenues over 1998. We are confident that over the course of this
year, we will surpass our initial revenue target of Euro 137 billion."
DaimlerChrysler anticipates that operating profits will increase by a rate
greater than revenues. The company remains optimistic overall, although
further revenue and profit growth could be adversely affected by economic
problems in Asia and Latin America and by any decline in economic growth in
Western Europe in the second half of 1999.
The number of employees at DaimlerChrysler has risen to 456,000, an
increase of 8%. This increase is due mainly to the 100% inclusion of Adtranz,
but DaimlerChrysler also recruited new staff, in particular in the Services
Division. On a comparable basis, employment grew by 4%.
The stated net income figure is adjusted for one-time effects in 1999 and
1998 and the impact of the 1999 tax reform in Germany. The one-time effect in
1999 from the IPO of debitel resulted in Euro 251 million, which was not
included in the adjusted operating profit calculation. Similarly, in 1998, a
one-time effect of Euro 220 million mainly, from the sale of the semiconductor
business and of two buildings at the Potsdamer Platz in Berlin, were excluded.
The reform of the German tax law required deferred taxes to be revaluated. In
addition, the broadening of the tax base resulted in an increase in the tax
burden. These effects totaled some Euro 600 million which were also not
included in the comparably calculated 1999 figures. Net income before these
adjustments was Euro 1.2 billion compared with Euro 1.5 billion in the first
quarter of 1998, and earnings per share before adjustments amounted to Euro
1.16 after Euro 1.56 in the previous year.
Positive developments in all divisions
With operating profits of Euro 1.5 billion, up 8%, or 12% in terms of US
dollars, the Chrysler, Dodge, Plymouth and Jeep(R) car and truck brands
contributed more than half of the total to operating profits and reported
units sales of 836,000, an increase of 10,000 units. The market share of the
U.S. car and truck business of these brands was 16.4% compared with 16.0% in
the first quarter of 1998.
The division Passenger Cars Mercedes-Benz and smart was the second largest
contributor to profits, with an operating profit of Euro 531 million, up 4%,
and a new sales record with 243,000 units, up 21%. This favorable result was
achieved despite the start-up and related marketing costs of the smart(R).
In the Mercedes-Benz, Freightliner, Sterling, Setra Commercial Vehicles
Division the continuing upward trend in the European and North American
markets enabled operating profit to increase by 12% to Euro 183 million. The
division shipped a record 128,000 vehicles worldwide in the first quarter of
1999, an increase of 19%.
Operating profit in the Services Division reached Euro 437 million, up
98%. This figure includes Euro 251 million from the IPO of debitel, the
telecommunication services provider. Excluding one-time effects, the
operating profit was at a similar level in 1998. On a comparable basis,
revenues increased by 26% to Euro 2.8 billion.
With operating profits of Euro 93 million, the Aerospace Division was able
to record a considerable increase of 116% in its contribution to profits.
This was largely due to the upward business trend in the Commercial Aircraft
and Defense and Civil Systems business units.
The positive trend in business and profits continued in the Automotive
Electronics business unit in the first quarter of 1999. The results recorded
by Adtranz were still negative. The MTU/Diesel Engines business unit recorded
slightly lower profits compared to the first quarter of 1998, which was
characterized by extraordinarily high revenues and profits due to invoicing
factors in the previous year.
DaimlerChrysler -- Figures January Through March
DaimlerChrysler Group YTD YTD Change
values in Euro 1999 1998 99:98
Operating profit, in million 2,774 2,396 +16%
Operating profit, adjusted*, in million 2,523 2,176 +16%
Earnings before taxes, in million 2,806 2,436 +15%
Net income, adjusted*, in million 1,639 1,332 +23%
Earnings per share (EPS), adjusted* 1.64 1.43 +15%
Revenues, in million 34,990 31,862 +10%
Employees 456,440 422,300 +8%
* adjusted for one-time effects; net income and EPS also adjusted for the
effects of changes in German tax law in 1999
Operating Profit by Segments YTD YTD Change
in million Euro, unconsolidated 1999 1998 99:98
Passenger Cars Mercedes-Benz, smart(R) 531 513 +4%
Passenger Cars and Trucks
Chrysler, Plymouth, Jeep(R), Dodge
in US$ (based on average exchange rates) 1,456 1,353 +8%
1,633 1,455 +12%
Commercial Vehicles Mercedes-Benz,
Freightliner, Sterling, Setra 183 164 +12%
DaimlerChrysler Services (debis) 437 221 +98%
DaimlerChrysler Aerospace (Dasa) 93 43 +116%
Others 74 122 -40%
Revenues by Segments YTD YTD Change
in million Euro, unconsolidated 1999 1998 99:98
Passenger Cars Mercedes-Benz, smart(R) 8,440 7,473 +13%
Passenger Cars and Trucks
Chrysler, Plymouth, Jeep(R), Dodge
in US$ (based on average
exchange rates) 15,291 14,995 +2%
17,150 16,121 +6%
Commercial Vehicles Mercedes-Benz,
Freightliner, Sterling, Setra 6,149 5,274 +17%
DaimlerChrysler Services (debis) 2,791 2,533 +10%
DaimlerChrysler Aerospace (Dasa) 1,920 1,698 +13%
Others (1998: 50% of Adtranz
revenues included) 1,318 893 +48%