Daimler and the Capital Market

Global stock markets displayed considerably weaker performance in many regions in 2018. The Daimler share price also decreased throughout 2018 and closed the year significantly lower than at the end of 2017. In 2018, we continued to inform institutional investors, analysts, rating agencies and private investors with a wide range of investor relations activities and comprehensive reporting on the Group’s business development and prospects. Our refinancing benefited from a high level of capital market liquidity and good ratings. The Board of Management and the Supervisory Board will propose to the Annual Shareholders’ Meeting that a dividend of €3.25 (2017: €3.65) per share be paid for the year 2018.

A.01 Development of Daimler’s share price and of major indices

  End of 2018 End of 2017 18/17
    % change
       
Daimler share price (in euros) 45.91 70.80 -35
       
DAX 30 10,559 12,918 -18
Euro STOXX 50 3,001 3,504 -14
Dow Jones Industrial Average 23,327 24,719 -6
Nikkei 20,015 22,765 -12
STOXX Europe Auto Index 439 615 -29

Most global stock markets significantly weaker

The positive sentiment on global stock markets at the beginning of the year, which was largely a result of the tax reform in the United States, led to all-time highs being recorded on several important share indices in January 2018. As the year progressed, however, stock-market sentiment deteriorated noticeably. In particular, the US government’s announcement of possible increases in import tariffs led to a great deal of uncertainty on global markets. Most stock markets did make gains once again between the end of March and mid-May, as the expectation of good results for the first quarter of 2018 caused investors to regain confidence. After that, however, sentiment was once again affected by unrest. In particular, the worsening trade conflict and the possibility of punitive tariffs led investors to adopt a more reserved position and to sell off stocks. Investors also continued to monitor the political situation in Italy. Additional strain was put on the markets by an interest-rate increase implemented in the United States by the Federal Reserve in June. Market volatility increased from the beginning of July until the end of August, in part due to tension between the United States and Turkey. Financial markets also suffered further as a result of ongoing discussions on the possible introduction of punitive tariffs, the high level of structural government debt in Italy, and the faltering Brexit negotiations. Concern about the global economy grew again at the beginning of the fourth quarter, after which global stock markets came under increasing pressure once again and share prices decreased substantially across many sectors. Cyclical stocks and not least shares in the automotive and supplier industries were especially impacted by these developments.

The index of the most important equities in the euro zone, the Euro STOXX 50, fell by 14 % in 2018. The development of the leading German share index, the DAX, was even weaker, with a decrease of 18 %. In Japan, the Nikkei index closed the year at 20,015, which is 12 % lower than a year earlier. In the United States, the Dow Jones reached an all-time high of 26,774 in October, but was 6 % below the prior-year level at the end of 2018.

Daimler share price falls by 35 %

On January 23, 2018, the Daimler share price reached €75.69, which was its highest level for the year. Automotive stocks were able to carry over their momentum from the previous year at the beginning of 2018, but this changed in early February in the wake of price corrections on the German stock market. The Daimler share was significantly impacted by this development. Investors were made to feel even more uneasy by the ongoing discussions concerning a ban on diesel vehicles in several German cities, the growing trade conflict and the possibility of punitive tariffs and retaliatory measures. One major concern here was the tariffs placed on automobile imports into the United States and China, which obviously have a negative impact on earnings in the automotive industry, particularly in view of the global supplier and production networks operated by automotive companies. Not even the sustained positive development of new orders for trucks in the US could help Daimler shares to gain lasting momentum in this environment. The temporary decrease in unit sales at Mercedes-Benz Cars in connection with the certification process for the new WLTP standard and higher tariffs imposed by the Chinese government on automobile imports from the US also had a negative effect on Daimler’s shares as the year proceeded. The downward adjustment of anticipated earnings for 2018 put further pressure on the Daimler share price during the year under review. In a very weak stock-market environment, our shares reached their lowest point of the year 2018 at €45.27 on December 27, and closed the year 2018 at €45.91. Although investors recognize the long-term opportunities offered by the industry’s high levels of investment in forward-looking technologies, automotive stocks still remain low compared with share prices in other sectors.

At the end of the year, Daimler had a market capitalization of €49.1 billion (2017: €75.7 billion). With a fall of 35 % during the year 2018, the development of Daimler’s share price was thus significantly weaker than that of the DAX (-18 %) and the STOXX Europe Auto Index (-29 %). In the first few weeks of 2019, increases in share prices were again to be observed on the world’s stock exchanges. Daimler’s shares were listed at €51.66 at the end of January, which is 13 % above the closing price at the end of 2018.

Dividend of €3.25

The Board of Management and the Supervisory Board will recommend the payment of a dividend of €3.25 per share for financial year 2018 (2017: €3.65) at the Annual Shareholders’ Meeting on May 22, 2019. The total dividend will thus amount to €3,477 million (2017: €3,905 million), which in relation to the current share price, represents a very attractive dividend yield.

A.02 Key figures per share

  2018 2017 18/17
Amounts in euros   % change
       
Net profit 6.78 9.61 -29
Dividend 3.25 3.65 -11
Equity (December 31) 60.45 59.70 +1
Xetra price at year end 1 45.91 70.80 -35
Highest 1 75.69 73.25 +3
Lowest 1 45.27 59.29 -24

1 Closing prices

A broad shareholder structure and a new major ­shareholder

Daimler continues to have a broad shareholder base of approximately 1.0 million shareholders (2017: 0.9 million). Shareholder numbers increased slightly during the reporting year, particularly as a larger number of private investors purchased our shares. Tenaciou3 Prospect Investment Limited, a company controlled by the Chinese entrepreneur Li Shufu, who is also the founder and CEO of Geely, became Daimler AG’s largest individual shareholder in February 2018. Tenaciou3 Prospect Investment Limited currently owns 9.7 % of the company’s shares. The Kuwait Investment Authority (KIA) currently owns 6.8 % of the company’s stock, making it Daimler AG’s second-largest single shareholder. The Renault-Nissan Alliance continues to hold 3.1 % of Daimler’s shares. BlackRock Inc., Wilmington, continues to holds a stake above the 5 % reporting limit pursuant to Germany’s Securities Trading Act (WpHG). In December 2018, BlackRock notified us that its proportion of the voting rights was 5.12 % at December 17, 2018. In October 2018, Harris Associates L. P., Wilmington, notified us that its proportion of the voting rights was 4.93 % on October 16, 2018. In May 2018, Bank of America Corporation notified us that its proportion of the voting rights of Daimler shares rose above the 3.0 % reporting limit to 3.30 % on May 9, 2018.

The aforementioned and all other voting-rights notifications are published on the Internet at daimler.com/investors/share/voting-rights.

Institutional investors hold a total of 60 % of our equity capital while private investors own 21 %. Approximately 62 % of our capital is in the hands of European investors and around 16 % is held by US investors.

With a weighting of 4.67 % (2017: 6.79 %), Daimler was ranked eighth in the German share index DAX 30 at the end of 2018. In the Euro STOXX 50 index, our shares had a weighting of 1.93 % (2017: 2.92 %), which put Daimler in 19th place. ­Daimler shares are listed on the stock exchanges in Frankfurt and Stuttgart. A total volume of 1,093 million shares were traded in Germany in 2018 (2017: 942 million). A substantial number of Daimler shares are also traded on multilateral trading platforms and in the over-the-counter market.

Daimler AR2018 A.03 Daimler share price high low
Daimler AR2018 A.04 Share price index

A.05 Key figures for Daimler shares

  End of 2018 End of 2017 18/17
      % change
       
Share capital
(in millions of euros)

3,070

3,070

0
Number of shares (in millions) 1,069.8 1,069.8 0
Market capitalization
(in billions of euros)

49.1

75.7

-35
Number of shareholders
(in millions)

1.0

0.9

+11
Weighting in share indices      
DAX 30 4.67 % 6.79 %  
Euro STOXX 50 1.93 % 2.92 %  
Long-term credit ratings      
S&P A A  
Moody’s A2 A2  
Fitch A- A-  
Scope A A  
DBRS A A  

A.06 Stock-exchange data for Daimler shares

ISIN DE0007100000
German Securities Identification Number 710000
Stock exchange symbol DAI
Reuters ticker symbol DAIGn.DE
Bloomberg ticker symbol DAI:GR
Daimler AR2018 A.07 Shareholder structure groups
Daimler AR2018 A.08 Shareholder structure regions

Employee stock purchase plan implemented once again

Staff members entitled to purchase employee stock were able to do so once again in March 2018. As was the case in the previous year, price-reduced shares as well as bonus shares were offered. At 23.5 %, the participation rate in the year under review was once again significantly higher than in the previous years (2017: 19.8 %). A total of 41,900 employees took part in the program (2017: 36,200), which is the highest number since 2008. The total number of shares purchased by employees also increased substantially once again, from 604,000 in 2017 to approximately 717,000 (of which just under 64,700 were bonus shares) in the year under review. In connection with the attendance bonus program, approximately 15,000 shares were additionally issued.

Annual Shareholders’ Meeting in the CityCube in Berlin

Our Annual Shareholders’ Meeting was held on April 5, 2018, in the CityCube in Berlin. Some 6,000 shareholders (2018: 6,200) attended the meeting. A total of 55.71 % (2017: 49.18 %) of equity capital was represented at the meeting (actual attendees and shareholders who voted by absentee ballot). A large majority of the shareholders approved each of the items of the agenda proposed by the company’s management. For example, the Annual Shareholders’ Meeting approved the highest dividend payout to date, €3.65 per share (2018: €3.25), which means the total dividend amounted to €3.9 billion. This was the highest total dividend payout of any DAX 30 company in 2018.

The Annual Shareholders’ Meeting also reelected Sari Baldauf, the former Chairwoman of the Board of Directors of Fortum Oyj, Finland, as a shareholder representative in the Supervisory Board of Daimler AG. Dr. Jürgen Hambrecht, Chairman of the Supervisory Board of BASF SE, was also reelected as a member of the Supervisory Board of Daimler AG representing the shareholders. Sari Baldauf and Jürgen Hambrecht were first elected to the Supervisory Board of Daimler AG as representatives of the shareholders in 2008. Marie Wieck, General Manager of IBM Blockchain, was elected by a large majority to the Daimler AG Supervisory Board as a shareholder representative. The terms for the three elected Supervisory Board members began after the conclusion of the Annual Shareholders’ Meeting in 2018 and will expire at the end of the Annual Shareholders’ Meeting held in 2023. Important documents and information related to the Annual Shareholders’ Meeting can be found on the Internet at daimler.com/investors/events/annual-meetings/2018.

In the exhibition areas of the CityCube, Daimler presented its technological expertise and a broad range of products and services under the motto “CORE, CASE, CULTURE, COMPANY.”

Reinventing Mobility: The CASE strategy

The exhibition highlights showcased future mobility. Along with the two-seat super sports show car Mercedes-AMG Project ONE Vision

Mercedes-AMG Project ONE – Performance Luxury

and the elegant Vision Mercedes-Maybach 6 Cabriolet show car,

Vision Mercedes-Maybach 6 Cabriolet: Revelation of Luxury | Trailer

the presentation also featured electric commercial vehicles such as the MB New Electric Truck, the MB Citaro Hybrid city bus, the FUSO eCanter van, and the Vision Van. Also on display were several car models featuring alternative drive system concepts. A 1:2-scale model of the Volocopter attracted a great deal of attention as well. The Volocopter is an all-electric air taxi that is locally emission-free and very quiet. It is equipped with 18 rotors, and plans also call for automated operation in the medium term. The Volocopter can be used to transport passengers as required through air space in cities as an attractive supplement to public transport services and has already been tested successfully in Dubai.

The story of Volocopter & Lab1886/Daimler

Daimler Financial Services presented its mobility services at the Annual Shareholders’ Meeting. The presentation of our program for the further development of our corporate culture, Leadership 2020, showed how Daimler is responding to the changes occurring with regard to products, customer expectations and the working world. Some of our trainees were also once again at the meeting to provide an insight into their work.

Continuation of comprehensive investor relations ­activities

In 2018, we once again provided institutional investors, analysts, rating agencies and private investors with timely information regarding the company’s business development. We organized road shows for institutional investors and analysts in the finance capitals of Europe, North America, Asia and Australia. We also held many one-on-one meetings at investor conferences. This was especially the case at the international motor shows in Geneva and Paris. We reported on our quarterly results in conference calls and webcasts. The presentations are available on our website at daimler.com/investors/events/presentations. The talks with analysts and investors focused on the latest earnings expectations for 2018, business developments and profitability in individual divisions and regions, and our “Project Future.” Investors are also now focusing more strongly on the transformation of the automotive industry and the development of the technologies which Daimler embraces in its CASE approach. In June, the top management team at Daimler Trucks held a capital market event at the headquarters of Daimler Trucks North America in Portland, Oregon. During this event, the executives discussed the strategies and objectives of global truck operations and also presented two electric trucks for the US market – the Freightliner eCascadia and the eM2 – at Portland International Raceway. The audio/video recordings and charts and illustrations from the event are available at daimler.com/investors/events/capital-market-days.

Awards once again for the Daimler Annual Report

Our 2017 Annual Report and its online version with numerous additional features won prestigious international awards once again in 2018 annualreport2017.daimler.com.

The Annual Report received a Platinum Vision Award from the League of American Communications Professionals LLC (LACP). In addition, we were given a Silver Stevie Award for the online version of the 2017 Annual Report, which also captured Silver at the 2017 LACP Professionals Vision Awards.

Website: easier to navigate, now with more service ­modules

We continued to develop our Investor Relations site at daimler.com/investors in 2018. Navigation pages for the various site sections, information charts and download modules all ensure more intuitive operation or get users to their destination page more quickly. Visitors to the site also no longer need to download several documents in order to compare figures from different years, as interactive diagrams now offer an overview directly at the website. We have also optimized our content for search engines in order to make it easier to find in web searches. In addition, brief summaries in the search results make it easier for users to decide which site they need or want to visit next.

Number of online shareholders reaches 100,000

Our shareholders continue to make good use of our range of personalized electronic information and communication. The increase in online shareholders was particularly high in 2018, as a total of 100,000 (2017: 95,000) shareholders received the invitation to and agenda for the Daimler Annual Shareholders’ Meeting by e-mail rather than by post. We would like to thank those shareholders for helping to protect the environment and cut costs. As was the case in the past, those shareholders once again had the opportunity to win attractive prizes in a lottery. Access to the e-service for shareholders and additional information can be found at https://register.daimler.com.

Refinancing benefits from a high level of capital-market liquidity and good ratings

The central banks’ monetary policy had a major effect on bond markets in 2018. As a result of the high level of liquidity, companies with investment-grade ratings saw their risk premiums remain at a moderate level for the most part.

In 2018, the Daimler Group primarily covered its refinancing needs by issuing bonds. A large proportion of those bonds were sold as benchmark bond issuances (bonds with high nominal volumes) in euro and US-dollar markets. In the US capital market, for example, Daimler Finance North America LLC issued bonds worth a total of $8.75 billion. In addition, Daimler International Finance B. V. issued euro bonds in benchmark format with a total volume of €5.25 billion. In 2018, Daimler AG also issued bonds in China (so-called Panda bonds) worth a total of CNY 15.0 billion. Furthermore, many smaller bonds were issued by the Daimler Group in a variety of currencies and markets.

At the end of 2018, Daimler Group companies had issued bonds that were still outstanding in a volume of €76.5 billion (2017: €67.1 billion). Besides raising funds through the issuance of bonds, Daimler also issued a small volume of commercial paper in 2018.

During the year under review, Daimler issued asset-backed securities (ABS) in the United States, Canada, China, Germany and the United Kingdom. In the United States, the company generated a refinancing volume of $7.6 billion through six transactions in 2018; in Canada, a volume of CAD 1.0 billion was generated in two transactions. In addition, Mercedes-Benz Bank used the Silver Arrow Platform to sell ABS bonds to European investors in an amount of €0.75 billion. In the United Kingdom, a volume of GBP 0.4 billion was successfully placed with investors, while in China, two ABS transactions were conducted successfully with a total volume of CNY 16 billion.

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