Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: "Above all at Mercedes-Benz Cars, but also at Mercedes-Benz Vans and Daimler Financial Services, we succeeded in improving earnings in the second quarter compared with the first quarter of 2009. This demonstrates that we are on the right track and that the measures we have taken are having positive effects. However, a comparison with the very good second quarter of last year shows that there is still a lot of work to be done."

Second quarter of 2009 compared with Q2 2008

Daimler posted EBIT of minus euro 1,005 million for the second quarter of 2009 (Q2 2008: plus euro 2,053 million).

The earnings decline in the second quarter of 2009 compared with the second quarter of last year was primarily the result of lower unit sales by Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans and Daimler Buses. An additional factor was the expenditure related to optimizing and repositioning the business operations of the subsidiaries Mitsubishi Fuso Truck and Bus Corporation (euro 204 million) and Daimler Trucks North America (euro 13 million). Daimler Financial Services posted lower earnings due to the increased cost of risk.

Earnings were also reduced by lower interest rates for discounting non-current provisions as well as by currency effects (in total euro 214 million). Due to the significant increase in corporate insolvencies in Germany, annual contributions to the German Pension Protection Association can be expected to rise in 2009. The Group recognized proportionate provisions of euro 78 million for this purpose in the second quarter of 2009.

The fall in earnings was mitigated by the measures taken by the Group to reduce costs and improve efficiency following the onset of the global economic crisis.

In the context of agreements entered into with Chrysler, Cerberus and the US Pension Benefit Guaranty Corporation (PBGC) concerning issues still open with regard to Chrysler, Daimler relinquished its 19.9% equity interest in Chrysler effective June 3, 2009 and undertook, as already reported at the end of April, to make three payments of US $200 million into Chrysler's pension plans, one upon the signing of the agreements and one in each of the next two years. Those agreements resulted in a total expense of euro 387 million in the second quarter of 2009.

Earnings in the second quarter of 2008 were positively affected by the transfer of shares in EADS (euro 35 million). There was an opposing effect from charges of euro 373 million relating to Daimler's equity interest in Chrysler

The Group posted a net loss of euro 1,062 million (Q2 2008: net profit of euro 1,395 million) and earnings per share amounted to minus euro 0.99 (Q2 2008: plus euro 1.40).

Unit sales down by 31% in second quarter

In the second quarter of 2009, Daimler sold 391,500 cars and commercial vehicles worldwide, which was 31% fewer than in the same period of last year.

The Daimler Group's second-quarter revenue decreased significantly from euro 26.0 billion in 2008 to euro 19.6 billion this year. Adjusted for the exchange rate effects, revenue fell by 27%.

At the end of the second quarter of 2009, Daimler employed 257,400 people worldwide (Q2 2008: 275,000). Of that total, 162,800 were employed in Germany (Q2 2008: 168,300).

The free cash flow from the industrial business amounted to plus euro 1.4 billion in the second quarter of 2009, and was affected by the progress made with the reduction of working capital. At Mercedes-Benz Cars for example, vehicle inventories were reduced by about 44,000 vehicles in the second quarter, thus achieving the target that had been set. All the other divisions also reduced their stocks of vehicles.

The Group's industrial net liquidity increased, also after taking account of the dividend distribution of euro 556 million in April, from euro 3.7 billion (end of Q1 2009) to euro 4.6 billion. This was primarily the result of the positive free cash flow in the industrial business in the second quarter of 2009.

Details of the divisions in the second quarter

In a still-difficult market environment worldwide, Mercedes-Benz Cars sold 287,200 vehicles in the second quarter of this year (Q2 2008: 354,000). So although unit sales were 19% below the very good prior-year figure, the car division posted a significant 24% increase compared with the first quarter of 2009, due in part to the full availability of the GLK compact sport-utility vehicle and the launch of the new E-Class. Revenue fell by 18% compared with the second quarter of last year to euro 10.6 billion.

The division's EBIT amounted to minus euro 340 million and was thus significantly lower than in the prior-year period (plus euro 1,212 million), but substantially better than the result for the first quarter of 2009. The decline in earnings was mainly caused by the significant decrease in demand for automobiles and the resulting falls in unit sales in the NAFTA region, Germany and the other key European markets. Earnings were additionally reduced by ongoing price pressure and an unfavorable model mix.

There were positive effects on earnings from the measures implemented to optimize operations as well as from the actions taken to adjust personnel expenses.

As a result of the ongoing worldwide market weakness, Daimler Trucks' second-quarter unit sales decreased by 56% to 54,100 units. However, the division's market share increased in nearly all its major markets. Revenue fell from euro 7.4 billion to euro 4.2 billion.

The division's EBIT was significantly less than the very high prior-year level at minus euro 508 million (Q2 2008: plus 608 million). The continuing decline in vehicle shipments was the main reason for the earnings trend in the second quarter of 2009. Other negative factors included the plan approved in May 2009 for the comprehensive realignment of the business operations of Mitsubishi Fuso Truck and Bus Corporation and the actions initiated last year for the repositioning of Daimler Trucks North America, which reduced second-quarter EBIT by euro 204 million and euro 13 million respectively. Currency effects also had a negative impact on earnings. There were positive effects from adjusting personnel costs and from other measures that were taken.

Mercedes-Benz Vans significantly increased its unit sales compared with the first quarter to 41,900 vehicles, but was not able to approach the record figure for the prior-year period (Q2 2008: 78,600). Revenue of euro 1.5 billion was also significantly lower than in the second quarter of last year (euro 2.6 billion).

The division was also unable to escape the general market development and posted EBIT of minus euro 10 million for the second quarter (Q2 2008: plus euro 262 million). Positive effects resulted from efficiency improvements and the development of some currencies.

Daimler Buses sold 8,300 buses and chassis in the period under review (Q2 2008: 11,100). As a result of the recession, demand for chassis was particularly weak in Latin America. In addition to the ongoing contraction of markets in South America, Daimler encountered a sharp drop in demand also in Mexico in the second quarter, whereas unit sales in the United States increased compared with the prior-year period. In Europe, the division's city-bus business remained stable, while demand for coaches weakened. Due to positive structural effects, revenue fell at a lower rate (-17%) than unit sales to euro 1.1 billion.

The division achieved EBIT of euro 49 million and was thus unable to match the excellent earnings of the prior-year period (euro 170 million). The decrease in earnings was primarily due to the substantial drop in demand.