DaimlerChrysler Reports 2nd Quarter 2000 Net Income Increased 18% to $1.7 Billion
26 July 2000
Revenues Gained 17% to $41.7 Billion
STUTTGART, Germany and AUBURN HILLS, Mich. - DaimlerChrysler AG today
reported significant increases for Second Quarter 2000 in net income, revenues,
earnings per share, and operating profit, compared to the Second Quarter 1999.
Net income increased 18% to $1.7 billion while revenues grew by 17% to
$41.7 billion. DaimlerChrysler's earnings per share (EPS) rose to $1.66, up
18%, compared to $1.41 in the Second Quarter of 1999. Operating profit gained
3% to $2.5 billion.
DaimlerChrysler achieved the strongest improvements in operating profit in
the Mercedes-Benz Passenger Cars & smart, Commercial Vehicles and Aerospace
divisions. Mainly due to the intense competition in the North American
market, which also affects the residual values of leased vehicles, operating
profit at the Chrysler Group and the Services divisions were below the level
of the Second Quarter of 1999.
Schrempp: "Good performance in the Second Quarter"
"DaimlerChrysler performed very well in the Second Quarter of 2000," said
DaimlerChrysler Chairman Juergen E. Schrempp. "We expect to sell about
4.8 million vehicles in 2000, maintaining our strong position in world
markets. Mercedes-Benz Passenger Cars & smart will exceed last year's record
sales. The recently announced acquisitions of Western Star and Detroit
Diesel, as well as the major steps taken in Asia with Mitsubishi Motors and
Hyundai Motor underline our strategy to focus on the automotive business. For
the Chrysler Group, as the fierce competition for market share in North
America continues, we will actively strengthen our outstanding market
position. And we are continuing to improve our efficiency, our processes and
our cost situation in all parts of the company."
For the First Half of 2000, revenues grew 17% to $80.8 billion. Adjusted
for one-time effects, net income increased 10% to $3.3 billion, earnings per
share also rose 10% to $3.27, and operating profit reached 1999's high level
at $4.8 billion.
DaimlerChrysler expects significant revenue growth to continue in the
Second Half of the year, mainly due to the positive outlook in almost all
divisions. The numerous product launches in the Chrysler Group are expected
to strengthen its market position. But expenses related to those launches,
plus aggressive new marketing activities, will depress its operating profit in
the Second Half, especially in the Third Quarter 2000. There will also be an
impact on Financial Services earnings caused by sustained pressure on used
vehicle prices.
The company expects that in the subsequent period, the new, attractive
model mix will lead to renewed earnings improvement. Commenting on the
earnings outlook for the full year, Schrempp said: "In the operative business,
we will not fully match last year's level. However, with the income from the
deconsolidation of Dasa and the positive effects from the first at-equity
valuation of the IT Services joint venture with Deutsche Telekom, we expect to
achieve a strong further increase in net income, earnings per share and
operating profit. The gains from these changes in the DaimlerChrysler
portfolio are the result of our previous years' successful work, and they add
further to our financial strength, which we will utilize to invest in our
future."
Schrempp noted that the Chrysler Group is embarking on the most ambitious
product initiative in its history. As part of its rapid-fire rollouts, it is
in the process of launching the Chrysler Sebring sedan and convertible and the
Dodge Stratus sedan at the Sterling Heights (Mich.) Assembly Plant, along with
the Sebring and Stratus coupes at the Mitsubishi Diamond Star Motors Corp.
Plant in Normal, Illinois. Additionally, the new Chrysler minivans are in the
launch assembly phase at plants in St. Louis, Missouri, and Windsor, Ontario.
And the newly-launched Chrysler PT Cruiser already is at full production at
its Toluca Assembly Plant in Mexico.
Mercedes-Benz Passenger Cars & smart
Following a successful 1999, the Mercedes-Benz & smart division continues
on a fast track in 2000. The Mercedes-Benz brand has the newest product
portfolio in the industry. Its S-, E-, C-, A- and M-Class products are
clearly market leaders in the premium segment.
In the Second Quarter of 2000, the Mercedes-Benz Passenger Cars & smart
division increased unit sales by 12% to a new record of 310,000 units and
posted revenues of $10.9 billion, up 19%. The division's operating profit
grew 22% to $719 million.
The biggest increase in unit sales among the main markets was achieved in
the US, up 18%. In Europe, the new C-Class was a spectacular success. The
very positive trend for the smart continued in the Second Quarter, with unit
sales up 65% to 33,300 cars. For 2000 as a whole, Mercedes-Benz Passenger
Cars & smart expects new records for both unit sales and revenues.
Starting in September, the C-Class will get an additional positive impetus
when it is launched in the US and production of the right-hand drive version
of this model begins for the United Kingdom and Japanese markets.
Chrysler Group
The Chrysler Group sold 851,000 vehicles in the Second Quarter, 2,000 more
than in last year's Second Quarter. Revenues rose 11% to $17.2 billion,
helped by the depreciation of the euro against the US dollar. Due to the
intense competitive situation and increased investment for the development and
launch of new products, operating profit did not reach last year's high level
and decreased 12% to $1.1 billion.
With 29,800 units sold, the new Chrysler PT Cruiser was particularly
successful. In the coming months, the Chrysler Group will strengthen its
competitive position by launching a series of new models, such as the Chrysler
Town & Country and Voyager minivans along with the Dodge Caravan minivan, the
Sebring convertible and the Sebring and Stratus coupes and sedans. With new
and innovative products, the Chrysler Group expects to build on its strong
sales momentum.
Commercial Vehicles
The Commercial Vehicles division with its Mercedes-Benz, Freightliner,
Sterling, Setra, and Thomas Built Buses brands, sold 145,000 units in the
Second Quarter, up 2% from the same period last year. Revenues increased by
13% to $7.2 billion, with operating profit growing even stronger by 19% to
$362 million.
Market shares improved in the NAFTA region, but unit sales were down from
the extremely high level of last year. The introduction of the Sprinter van
in the Second Half of 2000, under the Freightliner brand in the USA and
Canada, is expected to further strengthen the division's market position. The
strong recovery in South America resulted in a 20% increase in unit sales
there to 12,700 vehicles. Despite the softening NAFTA market, DaimlerChrysler
expects to again achieve for the full year 2000 the high unit sales and
revenue level of the previous year.
The company anticipates the planned acquisitions of the commercial vehicle
manufacturer Western Star, and the diesel engine manufacturer Detroit Diesel
Corporation, will help further improve its competitive position in the North
American truck and bus markets and in the worldwide diesel engine markets.
DaimlerChrysler Services
DaimlerChrysler Services (debis) achieved revenues of $4.4 billion, 50%
above the Second Quarter of 1999. The strong growth was due mainly to the
increasing leasing business in the NAFTA region. IT Services increased
revenues by 12%, to $0.8 billion. Revenue growth, especially in Financial
Services, is expected to continue during the remainder of the year.
Rising margin pressure, higher refinancing costs and the growing
competition in the leasing business in North America resulted in a decrease in
operating profit by 18% to $210 million. Pressure on margins and declining
used vehicle prices in the US market will continue throughout the year.
Additionally, globalization and Fleet Management activities in the Financial
Services business will be expanded in the Second Half of 2000.
DaimlerChrysler Aerospace
The Aerospace division increased revenues by 6% to $2.3 billion.
Operating profit grew strongly by 30% to reach $234 million, particularly due
to positive trends in the Commercial Aircraft business.
On July 10, 2000, DaimlerChrysler Aerospace (Dasa), Aerospatiale Matra and
CASA merged to form the European Aeronautic Defence and Space Company (EADS).
DaimlerChrysler is the biggest shareholder in EADS, with an equity stake of
about 30%. On the basis of a large order backlog and new, more competitive
structures, EADS has tremendous growth prospects.
Other Industrial Businesses
In the Second Quarter, Adtranz, the rail business unit, increased its
revenues by 31% to $1.0 billion. Adtranz broke even in the Second Quarter
after making a negative contribution to earnings in the first three months.
For the year as a whole, Adtranz is expected to achieve strong growth in
revenues and will continue to implement the announced restructuring measures
according to plan.
The Automotive Electronics business unit (TEMIC) posted an 11% increase in
revenues to $241 million. TEMIC expects an increase in revenues of about 10%
to more than $0.95 billion for the full year.
The MTU/Diesel Engines business unit recorded revenues of $194 million in
the Second Quarter, down 4% from last year's level. For the whole year,
MTU/Diesel Engines expects revenues of more than $0.95 billion for the first
time.
US dollar figures are for convenience only. All values, including the
1999 figures, are converted from Euro figures with the exchange rate of
1 Euro = USD 0.9545 (Noon Buying Rate of the Federal Reserve Bank of New York
on June 30, 2000).
DaimlerChrysler - Figures for 2nd Quarter/1st Half of 2000
U.S. dollar figures - convenience translation
All values, including the 1999 figures, are converted
from Euro figures with the exchange rate of
Euro 1 = U.S.-$ 0.9545 (Noon Buying Rate of the Federal Reserve Bank of New
York on June 30, 2000).
DaimlerChrysler Group Q2 Q2 Change YTD YTD Change
values in U.S.-$ 2000 1999 00:99 2000 1999 00:99
Operating Profit,
in millions 2,507 2,436 (1) +3% 4,847 4,844 (1) +0%
Earnings Before Taxes,
in millions 2,691 2,286 +18% 5,346 4,706 +14%
Net Income,
in millions 1,668 1,416 (1) +18% 3,284 (1) 2,981 (1) +10%
Earnings per share
(EPS) 1.66 1.41 (1) +18% 3.27 (1) 2.97 (1) +10%
Revenues,
in millions 41,748 35,628 +17% 80,847 69,026 +17%
Employees 474,849 463,081 +3% 474,849 463,081 +3%
Operating Profit
by Segments Q2 Q2 Change YTD YTD Change
in millions of U.S.-$ 2000 1999 00:99 2000 1999 00:99
Mercedes-Benz Passenger
Cars & smart 719 588 +22% 1,283 1,095 +17%
Chrysler Group 1,110 1,262 -12% 2,401 2,652 -9%
Commercial Vehicles 362 304 +19% 597 479 +25%
Services 210 256 -18% 396 429 (1) -8%
Aerospace 234 180 +30% 346 269 +28%
Others (59) (164) +64% (129) (94) -38%
Revenues by Segments Q2 Q2 Change YTD YTD Change
in millions of U.S.-$ 2000 1999 00:99 2000 1999 00:99
Mercedes-Benz Passenger
Cars & smart 10,894 9,136 +19% 20,338 17,191 +18%
Chrysler Group 17,217 15,522 +11% 35,325 30,117 +17%
Commercial Vehicles 7,173 6,371 +13% 13,668 12,241 +12%
Services 4,376 2,915 +50% 8,152 5,579 +46%
Aerospace 2,344 2,213 +6% 4,114 4,045 +2%
Others 1,653 1,134 +46% 2,792 2,392 +17%
Unit Sales by Segments Q2 Q2 00:99 YTD YTD 00:99
2000 1999 2000 1999
Mercedes-Benz Passenger
Cars & smart 309,700 275,600 +12% 570,100 519,100 +10%
Chrysler Group 851,100 849,000 +0% 1,774,700 1,684,800 +5%
Commercial
Vehicles 145,100 142,300 +2% 281,300 269,900 +4%
1) adjusted for one-time effects
DaimlerChrysler - Figures for 2nd Quarter/1st Half of 2000
DaimlerChrysler Group Q2 Q2 Change YTD YTD Change
values in Euro 2000 1999 00:99 2000 1999 00:99
Operating Profit,
in millions 2,626 2,552 (1) +3% 5,078 5,075 (1) +0%
Earnings Before Taxes,
in millions 2,819 2,395 +18% 5,601 4,930 +14%
Net Income,
in millions 1,748 1,484 (1) +18% 3,441 (1) 3,123 (1) +10%
Earnings per share
(EPS) 1.74 1.48 (1) +18% 3.43 (1) 3.11 (1) +10%
Revenues, in
millions 43,738 37,326 +17% 84,701 72,316 +17%
Employees 474,849 463,081 +3% 474,849 463,081 +3%
Operating Profit
by Segments Q2 Q2 Change YTD YTD Change
in millions of Euro 2000 1999 00:99 2000 1999 00:99
Mercedes-Benz Passenger
Cars & smart 753 616 +22% 1,344 1,147 +17%
Chrysler Group 1,163 1,322 -12% 2,516 2,778 -9%
in U.S.-$ (June 30,
2000 exchange rate) 1,110 1,262 -12% 2,401 2,652 -9%
Commercial Vehicles 379 319 +19% 625 502 +25%
Services 220 268 -18% 415 449 (1) -8%
Aerospace 245 189 +30% 362 282 +28%
Others (62) (172) +64% (135) (98) -38%
Revenues by Segments Q2 Q2 Change YTD YTD Change
in millions of Euro 2000 1999 00:99 2000 1999 00:99
Mercedes-Benz Passenger
Cars & smart 11,413 9,571 +19% 21,307 18,011 +18%
Chrysler Group 18,038 16,262 +11% 37,009 31,553 +17%
in U.S.-$ (June 30,
2000 exchange
rate) 17,217 15,522 +11% 35,325 30,117 +17%
Commercial Vehicles 7,515 6,675 +13% 14,320 12,824 +12%
Services 4,585 3,054 +50% 8,541 5,845 +46%
Aerospace 2,456 2,318 +6% 4,310 4,238 +2%
Others 1,732 1,188 +46% 2,925 2,506 +17%
Unit Sales by Segments Q2 Q2 00:99 YTD YTD 00:99
2000 1999 2000 1999
Mercedes-Benz Passenger
Cars & smart 309,700 275,600 +12% 570,100 519,100 +10%
Chrysler Group 851,100 849,000 +0% 1,774,700 1,684,800 +5%
Commercial
Vehicles 145,100 142,300 +2% 281,300 269,900 +4%
1) adjusted for one-time effects