Chairman's Letter

Mercedes-Benz EQC: electricity consumption combined: 22.2 kWh/100 km; CO2 emissions combined: 0 g/km, provisional figures1

 

Stuttgart, February 2019

Dear Shareholders

2018 was a year of strong headwinds for the entire automotive industry and thus also for Daimler. They included the discussion about diesel engines, the changeover to the new WLTP test method and the global trade dispute. All of this is reflected in our financial results and our share price.

But especially in difficult times, it can be seen how good a team is. And we have proven it: Daimler has a unique team. Together, we faced those headwinds, while making substantial progress in key areas for the future. On behalf of the entire Board of Management, I would like to thank each of our nearly 300,000 colleagues for their hard work and dedication last year.

Daimler sold more vehicles than ever before in 2018: a total of 3.4 million. Revenue reached €167.4 billion, which is two percent more than in the previous year. However, at 11.1 billion euros, EBIT was significantly lower than in 2017. Net profit amounted to 7.6 billion euros. At the Annual Shareholders’ Meeting, the Board of Management and the Supervisory Board will propose the distribution of a dividend of 3 euros and 25 cents per share.

How did the individual divisions contribute to these results?

Mercedes-Benz Cars sold 2.4 million cars, setting its eighth consecutive record for unit sales. Mercedes-Benz maintained its position as the leading premium brand. Business was particularly good in China: With an increase of eleven percent, we were able to achieve strong growth there once again, although the overall market contracted. We strengthened our entire portfolio – from the compact cars to the SUVs. Our EQC, the first all-electric Mercedes-Benz, also had its world premiere. smart will focus entirely on electric drive by 2020, following the changeover in the United States and Canada. Demand is there: Sales of our smart electric smart doubled last year.

Mercedes-Benz Vans also achieved record unit sales, delivering a total of 421,000 vehicles, which is five percent more than in the prior year. We expect the new Sprinter in particular to stimulate further growth. This is backed up by major orders: The response to the Sprinter is extremely good. In the future, we will deliver several thousand vehicles to Hymer each year. And Amazon has placed an order for 20,000 of our vans.

Most of the major commercial-vehicle markets were on the upturn in 2018 Daimler Trucks made good use of that. We clearly passed the mark of 500,000 trucks sold and thus posted the best year in our history. Total unit sales rose by ten percent. In Europe, we recorded a slight increase, and we grew significantly in North America, Latin America and Asia. The highlight on the product side was the presentation of the new Mercedes-Benz Actros. Our flagship heavy-duty truck sets new standards for safety, efficiency and connectivity.

The eCitaro was the dominant topic at Daimler Buses last year. With this new model, we are offering an effective solution for improving air quality in cities. Series production started soon after its world premiere and the first of these buses are already in use with customers. Overall, our buses’ sales curve showed a clear upward trend last year.

Daimler Financial Services finances or leases 50 percent of all the vehicles we sell. The division increased its new business slightly and its contract volume significantly. For the first time, it had more than five million vehicles on its books. Our mobility services also developed positively. They are already used by 31 million people worldwide – 13 million more than a year ago.

What we achieved in Daimler’s core business last year – despite the difficult environment – also gives cause for optimism for this year. The business environment remains extremely challenging. That’s why we are continuing to work hard on our efficiency. At the same time, we will continue to drive forward the four key future fields of our industry: connectivity, autonomous driving, sharing and electric mobility. What are our next steps here?

In the area of connectivity , we are continuously developing our MBUX infotainment system for example. Most recently, we have optimized voice control and introduced gesture control. New features can be directly experienced by our customers via over-the-air updates. Connectivity offers enormous future potential. And with MBUX, we have an excellent basis to utilize it.

We can build on a strong technological base also with autonomous driving . We will launch a driverless shuttle service this year in San José, California. The technology will make urban mobility even more convenient and road traffic safer overall. Automated driving functions also offer enormous economic advantages for our commercial-vehicle customers. We plan to put highly automated trucks on the road within the next decade. With the new Actros, we are already the world’s first manufacturer with a semi-automated truck in series production.

In the field of sharing , we will make further progress through the merger of our mobility services with those of BMW. The new Berlin-based company will start work this year. We are also expanding our portfolio at Daimler to include a premium ride-hailing service in China, which we are developing jointly with Geely.

At Daimler, we have gone all-out on the offensive with electric mobility . This year, the EQC will be in the dealerships. This car is the start of a new electric era at Mercedes-Benz. By 2022, we will electrify the entire product range: A total of 130 electrified passenger car variants are planned. Our goal is clear: We want to offer our customers the best overall package also in an electric world. In the commercial-vehicle segment, our electric portfolio is already unique in its breadth. The first model series of our vans, trucks and buses with electric drive are already in production and in use with customers. We have set our roadmap to deliver electric mobility on a large scale. For example, we will purchase battery cells worth 20 billion euros in the coming years. We are also expanding our own global network for the production of batteries.

2019 is a year of change for Daimler: With your approval, we will restructure our company. We are accelerating into the era of electric mobility. At the same time, we are entering new dimensions in connectivity, autonomous driving and mobility services. Each of these fields offers enormous opportunities for Daimler in the future. Our team has the will and the skills to use them. We will be delighted if you, our shareholders, continue accompanying us along this path.

Sincerely yours

Unterschrift Zetsche

Dieter Zetsche

 

1 Figures for electricity consumption and CO2 emissions are provisional, non-binding figures calculated by an external technical service. Figures for vehicle range are also provisional and non-binding. An EU type-approval certificate and a certificate of conformity with official figures are not yet available. The figures given above may deviate from the official figures.

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