DaimlerChrysler Continued Growth in Third Quarter
26 October 2000
DaimlerChrysler Continued Growth in Third Quarter
* Revenues increased by 8% to $32.8 billion
* Operating profit above last year's level; without one-time effects below
last year
* Net income increased 54% to $2.7; without one-time effects decrease to
$0.3
* Earnings per share up 54% to $2.66; without one-time effects EPS
decreased to $0.29
* Outlook for full year 2000: Operating profit expected to reach last
year's level
STUTTGART, Germany and AUBURN HILLS, Mich., Oct. 26 DaimlerChrysler continued to grow and strengthen its global market
position in the third quarter 2000, despite intense competition for market
share in North America.
Revenues on a comparable basis increased by 8% over the third quarter of
1999 to $32.8 billion. Operating profit, including one-time effects, totaled
$3.1 billion, slightly above last year's high level ($2.9 billion).
At $0.5 billion, adjusted operating profit was below last year's high
level ($2.3 billion), mainly due to a market-related reduction in earnings at
the Chrysler Group and the Services divisions.
Net income, including non-recurring income and expenses, increased from
$1.7 billion to $2.7 billion; earnings per share rose from $1.72 to $2.66.
Adjusted for one-time effects, net income fell in the third quarter from
$1.3 billion to $0.3 billion. Earnings per share, adjusted for one-time
effects, were $0.29 (Q3 1999: $1.33).
For the period January - September 2000, revenues were up 14% to $107.7
billion on a comparable basis. Operating profit, including one-time effects,
of $7.5 billion was at a similarly high level to the previous year
($7.6 billion), while net income rose 40% to $5.7 billion and earnings per
share also 40% to $5.70.
At the end of the third quarter 2000, DaimlerChrysler had 440,300
employees. Adjusted for changes brought about by consolidation measures, the
number of employees increased by 3%.
High Non-Recurring Income and Expenses in Q3 2000
Operating profit and net income were strongly affected by non-recurring
income and expenses in the third quarter of 2000. The de-consolidation of
Dasa alone generated income of $2.9 billion. Depreciation of leased vehicles'
residual value had a negative effect totaling $0.4 billion.
The third quarter of 1999 was marked by total non-recurring income of
$0.7 billion, mainly due to the sale of debitel shares.
"A number of important steps forward were taken in the third quarter: the
acquisition of Western Star and Detroit Diesel and the sale of Adtranz have
once again positioned our focus clearly on the automotive business," said
Juergen E. Schrempp, chairman of the Board of Management.
"By the successful conclusion of our acquisition of stock in Mitsubishi
Motors we have substantially expanded our position in Asia. We have brought
together our e-business activities in DCX.Net and thus laid the foundation for
the transformation of DaimlerChrysler into a completely networked global
automobile company. In this way, DaimlerChrysler will become faster, more
efficient and more competitive across the board -- from purchasing to sales.
Today, DaimlerChrysler is optimally positioned worldwide, possesses the right
products to satisfy all customers' wishes and is pursuing a course aimed at
achieving sustained profitable growth," Juergen Schrempp continued.
Outlook for 2000 as a Whole
DaimlerChrysler expects favorable developments for fourth quarter vehicle
sales. Sales for the year 2000 are expected to exceed 4.8 million vehicles,
around the same level as last year. Revenues for the year as a whole are
expected to increase to approximately $141 billion despite the
de-consolidation of Dasa and debis Systemhaus.
DaimlerChrysler anticipates that operating profit for the year as a whole,
including all non-recurring income and expenses, will reach last year's level
and that net income and earnings per share will be significantly higher than
in 1999. Excluding non-recurring extraordinary items, operating profit in
2000 is expected to total somewhere around $6 billion (comparable figure for
1999: $8.8 billion).
Sales Record for Mercedes-Benz Passenger Cars & Smart Division
The strongest growth in revenues and earnings in the third quarter of 2000
were in the Mercedes-Benz Passenger Cars & smart division. Revenues increased
15% to $9.3 billion. Despite higher costs due to the development of new
products, operating profit at the division was also up 15% to $721 million.
Adjusted for one-time effects, operating profit was up 5% to $657 million.
Sales of Mercedes-Benz passenger cars rose 3% to 249,500 units in the third
quarter. The biggest sales increases were posted in Eastern Europe (+63%) and
Australia (+28%), followed by Western Europe (+6%) and Asia (+5%). Sales in
Germany increased by 9%, despite a sharp market downturn in the country. A
total of 767,900 Mercedes-Benz passenger cars were sold in the period
January-September 2000, a 5% increase from the same period last year.
Smart sold 25,900 units in the third quarter (+13%), thereby continuing
the brand's very positive development. Sales of the smart increased 51% in
the first nine months of the year to 77,600 vehicles.
The Chrysler Group division recorded a 14% drop in sales to 623,000 units
in the third quarter, primarily due to the introduction of several new
products and an extremely competitive U.S. market. The Chrysler Group sold
2,397,700 vehicles in the first nine months of 2000, slightly less than the
high level recorded in the same period last year (2,407,200). The
appreciation of the dollar against the euro counteracted the effects of the
decline in sales and higher marketing costs, thereby leading to third quarter
revenues of $13.4 billion at the Chrysler Group, the same high level as last
year.
Costs associated with higher sales incentives for models at the end of
their lifecycle and for inventory reductions, and higher launch costs for the
new products, resulted in a third quarter operating loss of $0.5 billion
(Q3 1999: operating profit adjusted for one-time effects of $1.0 billion) at
the Chrysler Group -- as reported on September 27.
New and innovative products that have now been introduced will enable the
Chrysler Group to improve again its competitive position. It is expected that
the division will return to profitability in the fourth quarter. For the year
2000, the Chrysler Group anticipates an operating profit of more than
$1.8 billion (1999: $4.5 billion).
"The intense competition for market share in North America continues to
have a significant impact on the Chrysler Group's results," said Schrempp.
"New products will allow the Chrysler Group to expand its strong position in
the market. Jim Holden and his team are undertaking all the measures required
to bring about a turnaround."
The Commercial Vehicles division was able to further strengthen its
worldwide leading position, despite a 10% drop in sales to 126,400 units. The
division sold 407,700 vehicles in the first nine months of 2000, nearly the
same number as during the same period in 1999 (410,800). At $256 million,
operating profit in the third quarter was marginally below reach last year's
level ($268 million), primarily due to a significant drop in U.S sales. For
the year as a whole, the division expects unit sales to be slightly below last
year's level. Revenues should be around the same level as in 1999, while
operating profit should surpass last year's high figure.
Revenues at the Services division rose up sharply by 45% in the third
quarter to $4.3 billion. Because of higher refinancing costs and the
corresponding pressure on margins, operating profit adjusted for one-time
effects totaled $66 million, below last year's figure ($248 million).
Incentives necessary to maintain market share for certain Chrysler Group
models led to lower residual values for leased vehicles. This residual value
risk, especially prominent in the U.S., is reflected in DaimlerChrysler's
one-time value adjustment of $0.4 billion. A redesigned leasing strategy and
extensive marketing measures to boost sales of used vehicles is expected to
counteract such negative effects in the future.
Aerospace: Following the IPO of the European Aeronautic Defense and Space
Company (EADS) on July 10, 2000, Dasa is no longer included in
DaimlerChrysler's financial statement since July 1, 2000.
EADS is accounted for at equity in line with DaimlerChrysler's holding
(approximately 30%). The Aeroengines business unit, however, remains fully
consolidated. In the third quarter this unit increased revenues by 19% and
incoming orders by 35%. DaimlerChrysler also expects revenues and incoming
orders in the Aeroengines business unit for the entire year to be
substantially above the previous year's figures.
Adtranz increased revenues by 14% to $0.9 billion in the third quarter.
The sale of Adtranz to Bombardier is currently under review by international
antitrust authorities. Restructuring measures are continuing as planned and
are making good progress.
Both TEMIC and MTU/Diesel Engines continued positive business developments
in the third quarter, posting increases in revenues and new orders.
U.S. dollar figures are for convenience only. All values, including the
1999 figures, are converted from euro figures with the exchange rate of
1 euro=USD 0.8837 (Noon Buying Rate of the Federal Reserve Bank of New York on
September 29, 2000)
Figures for the 3rd Quarter/Nine Months Ended September 30, 2000
U.S. dollar figures - convenience translation
All values, including the 1999 figures, are converted from Euro figures
with the exchange rate of euro 1 = U.S.-$ 0.8837 (Noon Buying Rate of the
Federal Reserve Bank of New York on September 29, 2000).
DaimlerChrysler Group Q3 Q3 Change YTD YTD Change
values in U.S.-$ 2000 1999 00:99 2000 1999 00:99
Operating Profit,
in millions 3,059 2,929 +4% 7,547 7,640 -1%
Operating Profit (1),
in millions 477 2,269 -79% 4,965 6,754 -26%
Earnings Before Taxes,
in millions 208 2,022 -90% 4,861 6,300 -23%
Net Income, in millions 2,663 1,732 +54% 5,715 4,074 +40%
Net Income (1),
in millions 289 1,335 -78% 3,330 4,095 -19%
Earnings per share (EPS) 2.66 1.72 +54% 5.70 4.07 +40%
Earnings per share
(EPS) (1) 0.29 1.33 -78% 3.32 4.08 -19%
Revenues, in millions 32,839 32,018 +3% 107,689 95,924 +12%
Employees (09/30) 440,287 466,520 -6% 440,287 466,520 -6%
Operating Profit
by Segments Q3 Q3 Change YTD YTD Change
in millions of U.S.-$ 2000 1999 00:99 2000 1999 00:99
Mercedes-Benz Passenger
Cars & smart (1) 657 626 +5% 1,844 1,639 +13%
Chrysler Group (512) 1,029 1,712 3,484 -51%
Commercial Vehicles 256 268 -4% 809 711 +14%
Services (1) 66 248 -73% 433 645 -33%
Aerospace (1) 78 163 -52% 398 413 -4%
Others 4 (49) +107% (116) (135) +14%
Revenues by Segments Q3 Q3 Change YTD YTD Change
in millions of U.S.-$ 2000 1999 00:99 2000 1999 00:99
Mercedes-Benz Passenger
Cars & smart 9,304 8,107 +15% 28,133 24,023 +17%
Chrysler Group 13,447 13,402 +0% 46,152 41,286 +12%
Commercial Vehicles 5,749 5,824 -1% 18,404 17,157 +7%
Services 4,265 2,946 +45% 11,812 8,111 +46%
Aerospace 443 1,860 -76% 4,251 5,605 -24%
Others 1,331 1,153 +15% 3,916 3,368 +16%
Unit Sales by Segments Q3 2000 Q3 1999 00:99 YTD 2000 YTD 1999 00:99
Mercedes-Benz Passenger
Cars & smart 275,349 265,519 +4% 845,439 784,613 +8%
Chrysler Group 623,031 722,384 -14% 2,397,736 2,407,206 -0%
Commercial Vehicles 126,388 140,864 -10% 407,704 410,773 -1%
1) adjusted for one-time effects
Figures for the 3rd Quarter/Nine Months Ended September 30, 2000
DaimlerChrysler Group Q3 Q3 Change YTD YTD Change
values in Euro 2000 1999 00:99 2000 1999 00:99
Operating Profit,
in millions 3,462 3,315 +4% 8,540 8,646 -1%
Operating Profit (1),
in millions 540 2,568 -79% 5,618 7,643 -26%
Earnings Before Taxes,
in millions 236 2,288 -90% 5,501 7,129 -23%
Net Income, in millions 3,014 1,960 +54% 6,467 4,610 +40%
Net Income (1),
in millions 327 1,511 -78% 3,768 4,634 -19%
Earnings per share (EPS) 3.01 1.95 +54% 6.45 4.60 +40%
Earnings per share
(EPS) (1) 0.33 1.51 -78% 3.76 4.62 -19%
Revenues, in millions 37,161 36,232 +3% 121,862 108,548 +12%
Employees (09/30) 440,287 466,520 -6% 440,287 466,520 -6%
Operating Profit
by Segments Q3 Q3 Change YTD YTD Change
in millions of Euro 2000 1999 00:99 2000 1999 00:99
Mercedes-Benz Passenger
Cars & smart (1) 743 708 +5% 2,087 1,855 +13%
Chrysler Group (579) 1,164 1,937 3,942 -51%
in U.S.-$ (exchange rate
on 09/29/2000) (512) 1,029 1,712 3,384 -51%
Commercial Vehicles 290 303 -4% 915 805 +14%
Services (1) 75 281 -73% 490 730 -33%
Aerospace (1) 88 185 -52% 450 467 -4%
Others 4 (55) +107% (131) (153) +14%
Revenues by Segments Q3 Q3 Change YTD YTD Change
in millions of Euro 2000 1999 00:99 2000 1999 00:99
Mercedes-Benz Passenger
Cars & smart 10,528 9,174 +15% 31,835 27,185 +17%
Chrysler Group 15,217 15,166 +0% 52,226 46,719 +12%
in U.S.-$ (exchange rate
on 09/29/2000) 13,447 13,402 +0% 46,152 41,286 +12%
Commercial Vehicles 6,506 6,591 -1% 20,826 19,415 +7%
Services 4,826 3,334 +45% 13,367 9,179 +46%
Aerospace 501 2,105 -76% 4,811 6,343 -24%
Others 1,506 1,305 +15% 4,431 3,811 +16%
Unit Sales by Segments Q3 2000 Q3 1999 00:99 YTD 2000 YTD 1999 00:99
Mercedes-Benz Passenger
Cars & smart 275,349 265,519 +4% 845,439 784,613 +8%
Chrysler Group 623,031 722,384 -14% 2,397,736 2,407,206 -0%
Commercial Vehicles 126,388 140,864 -10% 407,704 410,773 -1%
1) adjusted for one-time effects