Outlook

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Status: April 27, 2018 – Interim Report Q1 2018

On the basis of these effects as well as expected market developments and the current assessments of the divisions, Daimler now assumes that Group EBIT in 2018 will be slightly higher than in the previous year.

Based on the generally positive development of unit sales, Daimler assumes that Group revenue will increase slightly in the year 2018. Significant revenue growth is anticipated in the Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services divisions. A significant increase in revenue is now also expected for the Daimler Trucks division. At Mercedes-Benz Cars, the expected exchange-rate developments and lifecycle effects will dampen the development of revenue, so the division is expected to post full-year revenue at the high level of 2017.

As of the year 2018, Daimler AG is adjusting its financial reporting to the new accounting standards IFRS 9 und 15. The adoption of accounting standard IFRS 15 as of January 1, 2018 changes the recognition of revenue. Daimler calculated its EBIT and revenue figures for the year 2017 according to the previously applicable accounting standards and presented those amounts in its consolidated financial statements for 2017.

The changeover has the effect of reducing revenue and thus also earnings in the divisional results of Mercedes-Benz Cars, especially in the first quarter of 2017. One of the reasons for this effect is that use was made of the permitted practical expedient of not reassessing certain contracts concluded before January 1, 2017 according to IFRS 15. The changes also have an impact on the earnings outlook for the Mercedes-Benz Cars and Daimler Buses divisions.

In late March 2018, Daimler and the BMW Group announced their intention, subject to review and approval by the relevant antitrust authorities, to combine and strategically expand their existing services for on-demand mobility in the areas of car sharing, ride hailing, parking, charging and multimodality. To those ends, the two companies signed an agreement on the merger of their business units for mobility services. Each company will hold 50% of the shares in the planned joint ventures for the mobility services of both companies. The establishment of the joint ventures will lead to significant positive impact on net assets and earnings at Daimler Financial Services. If the antitrust authorities grant their approval in 2018, there will be an impact on this year’s EBIT outlook for the Daimler Group and for the Daimler Financial Services division.

On the basis of these effects as well as expected market developments and the current assessments of the divisions, Daimler now assumes that Group EBIT in 2018 will be slightly higher than in the previous year.

The individual divisions now have the following expectations for EBIT in the year 2018:

  • Mercedes-Benz Cars: slightly above the prior-year level,
  • Daimler Trucks: significantly above the prior-year level,
  • Mercedes-Benz Vans: slightly below the prior-year level,
  • Daimler Buses: slightly above the prior-year level, and
  • Daimler Financial Services: significantly above the prior-year level.

The anticipated development of earnings in the automotive divisions will have a positive impact on the free cash flow of the industrial business also in the year 2018. Despite a further increase in advance expenditure for new products and technologies, the free cash flow from the industrial business should be significantly above the level of 2017 and also higher than the dividend distribution in 2018. It must be taken into consideration, however, that the free cash flow of the industrial business in 2017 was reduced by an extraordinary contribution of €3 billion to the German pension plan assets of Daimler AG.

Against the backdrop of further efficiency improvements in the context of the medium- and long-term programs for the structural improvement of business processes, Daimler assumes that its ambitious growth targets can be achieved with only a slight increase in the size of the workforce.

More detailed information can be found in the extensive Annual and Interim Reports as well as in additional data files and reporting formats.

Forward-looking statements:

This Digital Offering contains forward-looking statements that reflect our current views about future events. The words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “may,” ”can,” “could,” “plan,” “project,” “should” and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a decline of demand in our most important markets; a deterioration of our refinancing possibilities on the credit and financial markets; events of force majeure including natural disasters, acts of terrorism, political unrest, armed conflicts, industrial accidents and their effects on our sales, purchasing, production or financial services activities; changes in currency exchange rates; a shift in consumer preferences towards smaller, lower-margin vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilize our production capacities; price increases for fuel or raw materials; disruption of production due to shortages of materials, labor strikes or supplier insolvencies; a decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization measures; the business outlook for companies in which we hold a significant equity interest; the successful implementation of strategic cooperations and joint ventures; changes in laws, regulations and government policies, particularly those relating to vehicle emissions, fuel economy and safety; the resolution of pending government investigations or of investigations requested by governments and the conclusion of pending or threatened future legal proceedings; and other risks and uncertainties, some of which we describe under the heading “Risk and Opportunity Report” in the current Annual Report. If any of these risks and uncertainties materializes or if the assumptions underlying any of our forward-looking statements prove to be incorrect, the actual results may be materially different from those we express or imply by such statements. We do not intend or assume any obligation to update these forward-looking statements since they are based solely on the circumstances at the date of publication.

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