DaimlerChrysler's Q3 Operating Profit up 24%, Revenues up 15%
26 October 1999
DaimlerChrysler's Third-Quarter Operating Profit up 24%, Revenues up 15%, Net Income up 14%
-- Adjusted Earnings Per Share for Third Quarter Improved
To 1.51 Euro ($1.61) From 1.36 Euro ($1.45)
-- Record Sales of Passenger Cars, Light Trucks and Commercial Vehicles
-- Positive Outlook Due to Strong Sales and Order Backlog
-- Sale of Debitel and the Dasa Merger Continue DaimlerChrysler's
Strategy of Unlocking Shareholder Value
AUBURN HILLS, Mich. and STUTTGART, Germany, Oct. 26 --
DaimlerChrysler today reported third quarter net income, adjusted
for exceptional items, of 1.5 Euro ($ 1.6) billion, an increase of 14%
year-over-year. Adjusted earnings per share improved to 1.51 Euro ($ 1.61)
from 1.36 Euro ($ 1.45). Adjusted operating profit year-over-year rose 24% to
2.6 Euro ($ 2.7) billion. Third quarter revenues increased by 15% to
36.2 Euro ($ 38.6) billion, reflecting the company's stable and profitable
growth across most of its automotive, services and aerospace business units.
For the nine months ended September 30, adjusted net income increased
12% to 4.6 Euro ($ 4.9) billion on revenues of 108.5 Euro ($ 115.5) billion,
also up 12%. Earnings per share were 4.62 Euro ($ 4.92). In the same period,
operating profit, adjusted for one-time effects, improved 15% to 7.6 Euro
($ 8.1) billion.
"These results clearly illustrate sustained momentum across our automotive
businesses, thanks to a very attractive range of products and services,"
DaimlerChrysler chairmen Robert J. Eaton and Juergen E. Schrempp said. "In an
increasingly competitive environment across worldwide markets, we are able to
defend profit margins with our high-quality products, innovations and superior
service. We are also able to unlock shareholder value by successfully
managing our business portfolio."
Net income for the third quarter, including the one-time-benefit from the
sale of a 32.4%-stake of debitel, the European telecommunications operator, is
up 52% to 2.0 Euro ($ 2.1) billion. Unadjusted operating profit in the third
quarter rose by 60% to 3.3 Euro ($ 3.5) billion, including 886 Euro
($ 943) million from the debitel sale to Swisscom. For the nine months,
operating profit including one-time-benefits was up 26% to 8.6 Euro
($ 9.2) billion.
Based on an initial investment in debitel of 10 Euro ($ 10.6) million in
1991, DaimlerChrysler, through the IPO in January and the latest share sale,
has unlocked shareholder value in 1999 of more than 1.1 Euro ($ 1.2) billion.
In that same regard, DaimlerChrysler in the first half of 2000 will retain the
amount of 3.4 Euro ($ 3.6) billion in the merger of Dasa with Aerospatiale
Matra.
Outlook for fourth quarter and full year 1999
DaimlerChrysler expects continued strong growth in revenues and profits in
the fourth quarter. For the year as a whole, revenues are expected to
increase to at least 146 Euro ($ 155) billion or by about 11% year-over-year,
with profits growing faster than revenues, helped by merger synergies
amounting to 1.3 Euro ($ 1.4) billion. The synergies achieved in the
integration process will lead to improved profitability as they result in
ongoing sustainable operating efficiencies. Negative impacts this year result
from one-time restructuring and marketing outlays aimed at improving the
performance of the loss-making units smart and Adtranz as well as losses by
the company's automotive operations in Latin America.
"We anticipate further healthy progress in the current quarter," Eaton and
Schrempp said. "In 2000, we will launch an impressive series of new products
that we believe will create a highly profitable model mix, ensure our premium
position in key segments, and strengthen our competitive position. We are
committed to deliver long-term superior returns."
Record sales and profits for passenger car and light truck divisions
In the third quarter 1999, almost all divisions of DaimlerChrysler
reported double-digit revenue growth. The most significant profit increase
came from the Passenger Cars Mercedes-Benz, smart division, where operating
profit was up 40% to 708 Euro ($ 754) million on revenues of 9.2 Euro
($ 9.8) billion -- up 15% -- demonstrating very healthy profits from the
Mercedes-Benz brand.
Sales of Mercedes-Benz passenger cars continued to set records with
242,700 units, up 7% year-over-year. In the first nine months,
733,300 Mercedes-Benz cars were sold, up 12% over the same period in 1998.
Sales of smart totalled 51,300 units in the first nine months, with a
significant increase in the third quarter compared to the first two quarters.
The Passenger Cars and Trucks Chrysler, Plymouth, Jeep, Dodge division
reached record revenues of 15.2 Euro ($ 16.1) billion in the third quarter, up
19% year-over-year on unit sales of 722,400. In the same period, operating
profit increased by 11% to 1.0 Euro ($ 1.1) billion. Adjusted for one-time
effects, operating profit was up 26% to 1.2 Euro ($ 1.2) billion. The
division set sales records in six of the last nine months.
These positive financial results reflect a strong performance in a highly
competitive market and were achieved despite a 139 Euro ($ 149) million charge
for future lump-sum retiree payments related to the 1999 UAW collective
bargaining agreement and a loss of 25,000 units of production and shipment due
to hurricane Floyd. The company expects to make up for this production loss
with increased shipments in the fourth quarter. Incentives for 1999 are as
expected and lower than those of the North American competitors.
In the Commercial Vehicles division, third quarter sales also set a new
record and were up 11% to 139,800. Operating profit increased slightly. At
the same time, burdens resulted from the weak economic conditions in Latin
America and Turkey, which were more than compensated for by a strong
performance in NAFTA and the success of Vans Europe, which maintained its
leading position in the 2-6t segment with the Vito, the V-Class, the Sprinter
and the Vario.
The Services division also increased its revenues with double-digit growth
rates (up 17%). Operating profit was 1.2 Euro ($ 1.2) billion in the third
quarter, including the one-time benefit of 886 Euro ($ 943) million from the
sale of 32.4% of debitel's stock to Swisscom. The debitel IPO in the first
half year had generated another 256 Euro ($ 272) million.
Operating Profit at Dasa increased by 30% from July to September, whereas
revenues were slightly down 2%. In the period under review Dasa obtained
strong incoming orders in the areas of Commercial Aircraft and Helicopters.
With the forthcoming merger of Dasa's aerospace activities with those of
Aerospatiale Matra of France, and the intended merger with the Spanish Casa,
the company will establish the most important European Aerospace company,
European Aeronautic, Defense and Space Company (EADS) and will significantly
increase the competitive and financial strength of these activities.
DaimlerChrysler will remain a 30% shareholder EADS.
Adtranz increased its revenues in the third quarter by 4% to 0.8 Euro
($ 0.9) billion and intensified its cost-cutting program. Operating losses
are decreasing and the company expects further improvement following
additional restructuring measures currently under discussion, which might lead
to one-time restructuring charges in the fourth quarter.
TEMIC and MTU/Diesel Engines achieved further increases in revenues and
incoming orders in the third quarter of 1999.
Footnote:
US dollar figures are for convenience only. All values, including the
1998 figures, were converted from Euro figures at an exchange rate of
1 Euro = US$ 1.0643 (Noon Buying Rate of the Federal Reserve Bank of New York
on September 30, 1999). Changes are calculated based on Euro figures.
This press release contains forward-looking statements based on beliefs of
DaimlerChrysler management. When used in this release, the words
"anticipate," "believe," "estimate," "expect," "intend," "plan," and "project"
are intended to identify forward-looking statements. Such statements reflect
the current views of DaimlerChrysler with respect to future events and are
subject to risks and uncertainties. Many factors could cause the actual
results to be materially different, including, among others, changes in
general economic and business conditions, changes in currency exchange rates
and interest rates, introduction of competing products, lack of acceptance of
new products or services and changes in business strategy. Actual results may
vary materially from those projected here. DaimlerChrysler does not intend or
assume any obligation to update these forward looking statements.
Visit DaimlerChrysler's Media Services Web Site at
http://www.media.daimlerchrysler.com for additional DaimlerChrysler news.
DaimlerChrysler -- Figures 3rd Quarter 1999
US dollar figures -- convenience translation
All values, including the 1998 figures, are converted from Euro figures with
the exchange rate of
1 Euro = USD 1.0643 (Noon Buying Rate of the Federal Reserve Bank of New York
on September 30, 1999).
DaimlerChrysler Group values in US$
3rd Qtr. 3rd Qtr. Change Jan.-Sep. Jan.-Sep.
1999 1998 99:98 1999 1998
Operating profit,
in million 3,528 2,208 +60% 9,202 7,311
Operating profit,
adjusted*,
in million 2,733 2,208 +24% 8,134 7,051
Earnings before
taxes, in
million 2,503 2,391 +5% 7,793 7,732
Net income,
adjusted*,
in million 1,608 1,410 +14% 4,932 4,412
Earnings per
share (EPS),
adjusted* 1.61 1.45 +11% 4.92 4.65
Revenues, in
million 38,562 33,419 +15% 115,528 103,374
Employees 466,520 440,220 +6%
*Adjusted for one-time effects
Operating Profit by Segments
in million US$, unconsolidated
3rd Qtr. 3rd Qtr. Change Jan.-Sep. Jan.-Sep.
1999 1998 99:98 1999 1998
Passenger Cars
Mercedes-Benz,
smart(R) 754 540 +40% 1,974 1,642
Chrysler
Passenger Cars
and Trucks 1,091 984 +11% 4,048 3,812
Adjusted for
one-time
effects 1,240 984 +26% 4,197 3,812
Commercial
Vehicles
Mercedes-Benz,
Freightliner,
Sterling,
Setra 322 318 + 1% 857 837
DaimlerChrysler
Services (debis) 1,242 279 +345% 1,992 791
Adjusted for
one-time
effects 299 279 + 7% 777 761
DaimlerChrysler
Aerospace (Dasa) 197 151 +30% 497 363
Others (59) (64) + 8% (163) (46)
Revenues by Segments
in million US$, unconsolidated
3rd Qtr. 3rd Qtr. Change Jan.-Sep. Jan.-Sep.
1999 1998 99:98 1999 1998
Passenger Cars
Mercedes-Benz,
smart(R) 9,764 8,464 +15% 28,933 25,142
Chrysler
Passenger Cars
and Trucks 16,141 13,545 +19% 49,723 45,293
Commercial
Vehicles
Mercedes-Benz,
Freightliner,
Sterling,
Setra 7,015 6,243 +12% 20,663 18,043
DaimlerChrysler
Services (debis) 3,548 3,025 +17% 9,769 8,708
DaimlerChrysler
Aerospace (Dasa) 2,240 2,297 (2%) 6,751 6,409
Other Industrial
Businesses
(50% of Adtranz
revenues
consolidated in
1998, but
comparable figures
(100%) shown in
the table) 1,346 1,288 +5% 3,835 3,711
DaimlerChrysler - Figures 3rd Quarter 1999 (Euro)
DaimlerChrysler Group
values in (Euro)
3rd Qtr. 3rd Qtr. Change Jan.-Sep. Jan.-Sep.
1999 1998 99:98 1999 1998
Operating profit,
in million 3,315 2,075 +60% 8,646 6,869
Operating profit,
adjusted*,
in million 2,568 2,075 +24% 7,643 6,625
Earnings before
taxes, in
million 2,352 2,247 + 5% 7,322 7,265
Net income,
adjusted*,
in million 1,511 1,325 +14% 4,634 4,145
Earnings per
share (EPS),
adjusted* 1.51 1.36 +11% 4.62 4.37
Revenues, in
Million 36,232 31,400 +15% 108,548 97,129
Employees 466,520 440,220 + 6%
*Adjusted for one-time effects
Operating Profit by Segments
in million (Euro), unconsolidated
3rd Qtr. 3rd Qtr. Change Jan.-Sep. Jan.-Sep.
1999 1998 99:98 1999 1998
Passenger Cars
Mercedes-Benz,
smart(R) 708 507 +40% 1,855 1,543
Chrysler Passenger
Cars and Trucks 1,025 925 +11% 3,803 3,582
Adjusted for
one-time
effects 1,164 925 +26% 3,942 3,582
Commercial Vehicles
Mercedes-Benz,
Freightliner,
Sterling,
Setra 303 299 + 1% 805 786
DaimlerChrysler
Services (debis) 1,167 262 +345% 1,872 743
Adjusted for
one-time effects 281 262 + 7% 730 715
DaimlerChrysler
Aerospace (Dasa) 185 142 +30% 467 341
Others (55) (60) + 8% (153) (43)
Revenues by Segments
in million (Euro), unconsolidated
3rd Qtr. 3rd Qtr. Change Jan.-Sep. Jan.-Sep.
1999 1998 99:98 1999 1998
Passenger Cars
Mercedes-Benz,
smart(R) 9,174 7,953 +15% 27,185 23,623
Chrysler
Passenger Cars
and Trucks 15,166 12,727 +19% 46,719 42,557
Commercial
Vehicles
Mercedes-Benz,
Freightliner,
Sterling,
Setra 6,591 5,866 +12% 19,415 16,953
DaimlerChrysler
Services (debis) 3,334 2,842 +17% 9,179 8,182
DaimlerChrysler
Aerospace (Dasa) 2,105 2,158 (2%) 6,343 6,022
Other Industrial
Businesses
(50% of Adtranz
revenues
consolidated
in 1998, but
comparable
figures (100%)
shown in
the table) 1,265 1,210 + 5% 3,603 3,487