Financial Year 2008: Group EBIT of EUR2.7 billion (2007: EUR8.7 billion)

  PR Newswire

  STUTTGART, Germany, Feb. 17

- Net profit of EUR1.4 billion (2007: EUR4.0 billion)

- Revenue of EUR95.9 billion (2007: EUR99.4 billion)

- Dividend to amount to EUR0.60 per share (2007 EUR2.00)

- Outlook: substantial burdens on EBIT anticipated for 2009

- Intensified efficiency programs

STUTTGART, Germany, Feb. 17 /PRNewswire-FirstCall/ -- Daimler AG (NYSE: DAI)
today presented its preliminary and unaudited figures for the Group and the
divisions for the 2008 financial year.

Daimler achieved EBIT of EUR2,730 million in 2008 (2007: EUR8,710 million).
The decrease in Group EBIT was mainly the result of expenses totaling EUR3,228
million (2007: charges of EUR377 million) related to the investment in
Chrysler and the lower earnings achieved by Mercedes-Benz Cars. Another factor
is that prior-year EBIT included higher gains realized on the transfer of
portions of Daimler's equity interest in EADS (2008: EUR130 million; 2007:
EUR1,573 million). Daimler Trucks did not achieve its prior-year earnings,
primarily due to the difficult economic situation in the United States and
expenses incurred for the repositioning of its activities in the NAFTA region.
The development of earnings was positive at Daimler Financial Services and the
Mercedes-Benz Vans and Daimler Buses units.

Based on the divisions' projections, the Group had forecast EBIT from
continuing operations of more than EUR6 billion. This did not include special
items from the revaluation of leased vehicles' residual values at
Mercedes-Benz Cars, the sale of real estate at Potsdamer Platz, the transfer
of interest in EADS, the repositioning of Daimler Trucks North America, the
new management model and effects related to Chrysler. Excluding those special
items, Daimler achieved that goal.

Earnings in both years were affected by special items, as shown in the tables
on pages 12 and 13.

For Daimler, the year 2008 consisted of a very good first half and a difficult
second half. Dr. Dieter Zetsche, Chairman of the Board of Management of
Daimler AG and Head of Mercedes-Benz Cars, stated at Daimler's Annual Press
Conference: "During the first half of 2008, we proved how well we perform
under normal economic conditions. Many of our business operations were headed
for very good results."

Net profit for the full year amounted to EUR1.4 billion (2007: EUR4.0 billion)
and earnings per share amounted to EUR1.41 (2007: EUR3.83).

The Board of Management proposes to the Supervisory Board that a dividend of
EUR0.60 per share be distributed for the year 2008 (2007: EUR2.00 per share).
Related to the number of shares entitled to a dividend at December 31, 2008,
this constitutes a dividend distribution of EUR556 million (2007: EUR1,928
million). The main reasons for the dividend adjustment are the level of
earnings achieved in 2008 and the difficulty in estimating the further
development of the world economy and the automotive markets.

Unit sales and revenue

Despite extremely difficult market conditions, especially in the second half
of the year, Daimler sold a total of 2.1 million vehicles in 2008, thus nearly
equaling the prior-year level. Daimler's total revenue amounted to EUR95.9
billion in 2008, compared with EUR99.4 billion in the prior year; adjusted for
exchange-rate effects, there was a decrease of 1%.

Free cash flow and liquidity

Due to the crisis-like development in the second half of the year, the free
cash flow of the industrial business for the full year of minus EUR3.9 billion
was not satisfactory (2007: plus EUR7.6 billion). This was primarily caused by
the unexpected sharp decrease in unit sales at Mercedes-Benz Cars in the
fourth quarter. Despite cuts in production, inventory levels remained high. In
addition, there were disproportionately high payments to suppliers because
many invoices regularly have to be paid at the end of the year and trade
payables from the third quarter had to be settled. The reduction in the free
cash flow was also caused by the temporarily increased investment in the new
E-Class and in technologies for the reduction of CO2 emissions, as well as by
the acquisition of a 10% equity interest in Kamaz, a Russian truck
manufacturer.

The Daimler Group has a good level of liquidity. It decreased by EUR9.1
billion to EUR8.0 billion in 2008. The unusually high liquidity at December
31, 2007 was related to the sale of a majority interest in Chrysler. As a
result of the decrease, a level of liquidity appropriate to the Daimler Group
has been achieved.

Workforce

At December 31, 2008, Daimler employed a workforce of 273,216 people worldwide
(2007: 272,382). Of that total, 167,753 were employed in Germany (2007:
166,679) and 22,476 in the United States (2007: 24,053). The number of
apprentices and trainees at year end was 9,603 (2007: 9,300).

For the year 2008, the Board of Management has decided on a discretionary
profit-sharing bonus of EUR1,900 for the approximately 118,000 eligible
employees of Daimler AG. The bonus will be paid out with the salaries for the
month of April 2009. With this profit sharing, the Board of Management is
honoring the employees' contribution to the operating profit achieved in 2008.

In order to secure the Group's cash flows in 2009, however, contributions will
be required from all sections of the workforce. The Board of Management has
therefore decided that the wage increases for 2009 agreed upon in collective
bargaining for the approximately 140,000 employees covered by such agreements
will only apply to that portion of wages covered by collective bargaining and
not to the portion of wages additionally paid by Daimler outside the
agreement. This possibility is foreseen by the agreement signed by management
and employee representatives in 2004, "Securing the Future 2012." Furthermore,
the Board of Management has decided not to increase the remuneration of the
Group's IC managers in 2009. An additional measure taken in this context is
the suspension of the employee shares program in 2009.

Investment in safeguarding the future

Despite the difficult environment, the Daimler Group invested EUR8 billion to
secure its future, EUR1 billion more than in the prior year.

Daimler's expenditure for research and development increased to EUR4.4 billion
last year (2007: EUR4.1) billion. At Mercedes-Benz Cars, total R&D spending
increased from EUR2.7 billion in 2007 to EUR3.0 billion. Daimler Trucks' R&D
expenditure amounted to EUR1.1 billion (2007: EUR1.0 billion).

A key area of Daimler's research and development activities in 2008 was
working on new, particularly fuel-efficient and environmentally friendly drive
technologies. In order to reduce CO2 emissions even further and to offer
vehicles compatible with the needs of the future over the long term, Daimler
is working on the optimization of conventional drive technologies and the
reduction of vehicle weight as well as on alternative drive systems such as
fuel cells and electric vehicles.

Daimler invested EUR3.6 billion in property, plant and equipment in 2008
(2007: EUR2.9 billion). This investment focused on new vehicle models and new
drive systems. Of the total capital expenditure on property, plant and
equipment, EUR2.5 billion was invested in Germany.

The divisions in detail

Mercedes-Benz Cars, comprising the brands Mercedes-Benz, Maybach, smart and
AMG, sold a total of 1,273,000 vehicles in 2008 (2007: 1,293,200). The
Mercedes-Benz brand delivered 1,125,900 automobiles (2007: 1,180,100), while
the smart brand significantly increased its unit sales to 139,000 cars (2007:
103,100).

Due to the market development, but in particular also to the upcoming E-Class
model changeover, revenue decreased by 9% to EUR47.8 billion.

The division's EBIT of EUR2,117 million in 2008 was substantially lower than
its prior-year earnings of EUR4,753 million; in the fourth quarter of 2008,
Mercedes-Benz Cars' loss amounted to EUR359 million compared with a profit of
EUR1,426 million in Q4 2007. While EBIT continued to develop very positively
in the first six months of 2008, the abrupt slump in demand in the NAFTA
region and in major European markets led to substantial burdens on earnings as
of the third quarter.

There were additional burdens on earnings from a shift in demand towards
smaller models and from exchange-rate effects. The revaluation of leased
vehicles' residual values necessitated by the significant weakening of the
world economy in the second half of 2008 resulted in impairment charges of
EUR465 million. Sales incentives and higher raw-material prices also had a
negative impact on operating profit. These burdens on earnings were only
partially offset by further efficiency improvements.

Daimler Trucks was once again the world's largest manufacturer in the segment
of medium- and heavy-duty trucks last year, selling 472,100 vehicles and
posting revenue of EUR28.6 billion (2007: 467,700 units and EUR28.5 billion).
The 1% increase in unit sales was primarily due to higher volumes in Brazil,
Indonesia and the Middle East. On the other hand, unit sales decreased as a
result of the difficult market situation in the United States, Canada and
Japan.

The division achieved EBIT of EUR1,607 million (2007: EUR2,121 million). The
reduced operating profit was mainly due to lower vehicle deliveries caused by
the ongoing difficult economic situation in the NAFTA region. Other factors
with a negative impact on earnings were exchange-rate effects and increased
raw-material prices. In addition, measures taken for the repositioning of
Daimler Trucks North America led to expenses of EUR233 million. These measures
are expected to lead to annual earnings improvements of US $900 million as of
2011.

Trucks Europe/Latin America increased its unit sales by 6% to 170,100
vehicles, setting a new sales record. For Trucks NAFTA, unit sales decreased
by 12% to 104,300 vehicles. However, Trucks NAFTA defended its leading
position for Class 8 trucks in the NAFTA region with a market share of 30.9%.
Trucks Asia sold a record 197,700 trucks and buses last year, 5% more than in
2007, with increased unit sales in Indonesia, the Middle East, Eastern Europe
and Turkey.

In December 2008, Daimler entered into a strategic partnership with Russian
truck manufacturer Kamaz, secured with a 10% equity interest in the company.
Cooperation with Kamaz will help Daimler Trucks to penetrate the Russian
volume market.

Daimler Financial Services developed positively in 2008. Its worldwide
contract volume of EUR63.4 billion was 7% above the prior-year figure. Several
companies were consolidated for the first time in 2008, primarily in Asia and
Eastern Europe. Excluding this effect and adjusted for exchange-rate effects,
growth in contract volume amounted to 5%. New business increased compared with
the prior year by 7% to EUR29.5 billion.

Daimler Financial Services posted EBIT of EUR677 million, significantly
surpassing the prior-year result of EUR630 million. The main positive effects
on earnings came from the increased contract volume. Increased cost of risk
had a negative impact on EBIT.

Vans, Buses, Other primarily comprises the Mercedes-Benz Vans and Daimler
Buses units as well as Daimler's equity interests of 22.5% in the European
Aeronautics Defence and Space Company (EADS), 19.9% in Chrysler Holding LLC
and 28.4% in Tognum AG. These equity interests are included in the
consolidated financial statements using the equity method of accounting with a
three-month time lag.

Despite the backdrop of a difficult market environment in the second half of
2008, Mercedes-Benz Vans nearly matched its record unit sales of 2007, selling
287,200 vehicles worldwide (2007: 289,100).

Daimler Buses sold 40,600 buses and chassis of the brands Mercedes-Benz, Setra
und Orion in 2008, once again surpassing the prior-year number (2007: 39,000).
The unit therefore succeeded in defending its worldwide market leadership in
the segment of buses above 8 tons in all of its major markets.

The revenue of Vans, Buses, Other increased by 6% to EUR15.0 billion,
primarily due to the growth in unit sales at Daimler Buses.

The EBIT posted for 2008 by Vans, Buses, Other amounted to minus EUR1,239
million (2007: EUR1,956 million). Mercedes-Benz Vans achieved EBIT of EUR818
million due to its good revenue situation (2007: EUR571 million). Daimler
Buses' EBIT improved from EUR308 million to EUR406 million as a result of its
strong unit sales. Daimler's share of the earnings of EADS amounted to EUR177
million (2007: EUR13 million).

The reduction in the segment's EBIT was primarily due to special items,
including the negative contribution to earnings from Chrysler and other
charges related to that equity interest. Another factor is that prior-year
earnings included higher gains on the transfer of interest in EADS (2008:
EUR130 million; 2007: EUR1,573 million). The sale of real estate at Potsdamer
Platz led to a gain of EUR449 million in 2008.

The positive development of earnings at EADS was primarily due to Airbus and
Eurocopter, but the Astrium business unit and Defence and Security were also
very successful in their market segments. Earnings were burdened by the
weakness of the US dollar and the challenges faced by the A400M program.

The equity-method accounting of Daimler's 19.9% interest in Chrysler reduced
the Group's EBIT for the year 2008 by EUR1,390 million (2007: charge of EUR377
million). In addition, the impairment of loans and other Chrysler-related
assets led to charges of EUR1,838 million.

Outlook

The great uncertainty about the duration and extent of the global economic
downturn is connected with substantial risks for the development of the
world's automotive markets.

From today's perspective, global demand for automobiles could decrease by
another 10% in 2009 compared with the prior year. In the world's triad
markets, further significant falls in overall unit sales are anticipated;
falling unit sales are also to be expected in most of the emerging markets.

Prospects for the major markets for commercial vehicles are also unfavorable.
The triad markets are likely to suffer a substantial drop in demand. And in
Western Europe, the commercial vehicle business is at the beginning of a
distinct cyclical downturn phase, which will particularly affect sales of
medium and heavy-duty trucks. The global economic slowdown will dampen demand
for commercial vehicles also in the growth regions of Asia, Eastern Europe and
Latin America. In the major emerging markets therefore, distinct market
contraction is expected in all commercial-vehicle segments for the first time
in many years.

Mercedes-Benz Cars cannot avoid the expected weakness of key sales markets and
in particular of those market segments important to the unit. Total unit sales
in the year 2009 are therefore likely to be below the level of the year 2008.
As a result of the weakness of demand in major markets, the Daimler Trucks
division anticipates a significant decrease in unit sales in 2009.
Mercedes-Benz Vans and Daimler Buses will not match their high unit sales of
the prior year.

On the basis of assumptions concerning the development of the automotive
markets and the divisions' planning, the Daimler Group expects total unit
sales to decrease significantly in 2009. However, due to innovative and
high-quality new products and an attractive model range, the Group assumes
that its divisions will be able to further strengthen their market positions.

From the starting point of the currently projected unit sales, the Daimler
Group's revenue is likely to be lower than in 2008 in all of the vehicle
divisions.

Further substantial burdens are anticipated on the earnings of the Group and
its divisions. A more detailed statement on earnings will only be possible
later in the year, when the development of the world economy and the
automotive markets can be better assessed.

In order to improve the earnings situation on a sustained basis and in all
divisions, Daimler has continued and intensified its actions designed to
reduce costs and improve efficiency. These actions include the adjustment of
production and employment levels by means of flexible working-time models and
short-time work, the reduction of inventories, the limitation of expenses and
the optimization of refinancing instruments.

Dr. Dieter Zetsche: "The Daimler Group is in a relatively strong position to
meet this crisis. We have the opportunity not only to overcome this
exceptional situation, but to emerge from it stronger. We are going to seize
this opportunity."

Annual Report 2008 and other information related to the 2008 financial
statements will be published on the Internet on February 27. The Annual Report
will also be available in printed form from the middle of March onwards.

In both 2008 and 2007, the development of earnings was affected by special
items, which are shown in detail in the following tables:


    Amounts in millions of EUR                         2008     2007

    Mercedes-Benz Cars
    Revaluation of residual values                     (465)       -

    Financial support for suppliers                       -      (82)

    Adjustment of a pension plan                         84        -



    Amounts in millions of EUR                         2008     2007

    Daimler Trucks
    Repositioning of Daimler Trucks North America      (233)       -

    Adjustments of pension plans and healthcare
     benefits                                            29       86

    Sale of real estate in Japan                          -       78



    Amounts in millions of EUR                         2008     2007

    Vans, Buses, Other
    Sale of real estate (2008: Potsdamer Platz;
     2007: Wohnstatten Sindelfingen)                    449       73

    Gains related to the transfer of shares in EADS     130    1,573

    Restructuring program at EADS                         -     (114)

    At-equity result from Chrysler                   (1,390)    (377)

    Impairments of loans and other
     Chrysler-related assets                         (1,838)       -



    Amounts in millions of EUR                         2008     2007

    Reconciliation
    New management model                               (247)    (256)


The figures in this document are preliminary and have neither been approved
yet by the Supervisory Board nor audited by the external auditor.

Further information on Daimler is available on the Internet at
www.media.daimler.com.

This document contains forward-looking statements that reflect our current
views about future events. The words "anticipate," "assume," "believe,"
"estimate," "expect," "intend," "may," "plan," "project," "should" and similar
expressions are used to identify forward-looking statements. These statements
are subject to many risks and uncertainties, including a lack of improvement
or a further deterioration of global economic conditions; a continuation or
worsening of the turmoil in the credit and financial markets, which could
result in ongoing high borrowing costs or limit our funding flexibility;
changes in currency exchange rates and interest rates; the introduction of
competing, fuel efficient products and the possible lack of acceptance of our
products or services which may limit our ability to adequately utilize our
production capacities or raise prices; price increases in fuel, raw materials,
and precious metals; disruption of production due to shortages of materials,
labor strikes, or supplier insolvencies; a further decline in resale prices of
used vehicles; the effective implementation of cost reduction and efficiency
optimization programs at all of our segments, including the repositioning of
our truck activities in the NAFTA region; the business outlook of Chrysler, in
which we hold an equity interest and some of whose obligations we have
guaranteed; the business outlook of companies in which we hold an equity
interest, most notably EADS; changes in laws, regulations and government
policies, particularly those relating to vehicle emissions, fuel economy and
safety, the resolution of pending governmental investigations and the outcome
of pending or threatened future legal proceedings; and other risks and
uncertainties, some of which we describe under the heading "Risk Report" in
Daimler's most recent Annual Report and under the headings "Risk Factors" and
"Legal Proceedings" in Daimler's most recent Annual Report on Form 20-F filed
with the Securities and Exchange Commission. If any of these risks and
uncertainties materialize, or if the assumptions underlying any of our
forward-looking statements prove incorrect, then our 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. Any forward-looking statement speaks only as of the date on which
it is made.

About Daimler

Daimler AG, Stuttgart, with its businesses Mercedes-Benz Cars, Daimler Trucks,
Daimler Financial Services, Mercedes-Benz Vans and Daimler Buses, is a
globally leading producer of premium passenger cars and the largest
manufacturer of heavy- and medium-duty trucks in the world. The Daimler
Financial Services division has a broad offering of financial services,
including vehicle financing, leasing, insurance and fleet management. Daimler
sells its products in nearly all the countries of the world and has production
facilities on five continents. The company's founders, Gottlieb Daimler and
Carl Benz, continued to make automotive history following their invention of
the automobile in 1886. As an automotive pioneer, Daimler and its employees
willingly accept an obligation to act responsibly towards society and the
environment and to shape the future of safe and sustainable mobility with
groundbreaking technologies and high-quality products. The current brand
portfolio includes the world's most valuable automobile brand, Mercedes-Benz,
as well as smart, AMG, Maybach, Freightliner, Sterling, Western Star,
Mitsubishi Fuso, Setra, Orion and Thomas Built Buses. The company is listed on
the stock exchanges in Frankfurt, New York and Stuttgart (stock exchange
abbreviation DAI). In 2008, the Group sold 2.1 million vehicles and employed a
workforce of over 270,000 people; revenue totaled €95.9 billion and EBIT
amounted to €2.7 billion. Daimler is an automotive Group with a commitment to
excellence, and aims to achieve sustainable growth and industry-leading
profitability.


               Figures for the 4th Quarter and the Year 2008

    --------------------------------------------------------------------
    Daimler Group        Q4       Q4   Change                     Change
     amounts in EUR     2008     2007   08/07     2008       2007  08/07
    --------------------------------------------------------------------
    Revenue, in
     millions           23,240   26,504  -12%    95,873     99,399  -4%
    EBIT, in
     millions           (1,947)   1,393    -      2,730      8,710 -69%
    Net profit
     (loss), in
     millions           (1,526)   1,697    -      1,414      3,985 -65%
       Net profit
        (loss) from
        continuing
        operations,
        in millions     (1,261)   1,700    -      1,704      4,855 -65%
    Earnings (loss)
     per share (EPS)     (1.61)    1.71    -       1.41       3.83 -63%
    Dividend proposed,
     in EUR                  -        -    -       0.60       2.00 -70%
    Employees
     (December 31)     273,216  272,382   +0%   273,216    272,382  +0%


    --------------------------------------------------------------------
    EBIT by Divisions      Q4      Q4  Change                     Change
     in millions of EUR   2008    2007  08/07     2008       2007  08/07
    --------------------------------------------------------------------
    Mercedes-
     Benz Cars            (359)   1,426    -      2,117      4,753 -55%
    Daimler Trucks          86      512  -83%     1,607      2,121 -24%
    Daimler Financial
     Services              153      109  +40%       677        630  +7%
    Vans, Buses, Other  (1,658)    (492)   -     (1,239)     1,956   -
       Mercedes-
        Benz Vans          158      159   -1%       818        571 +43%
       Daimler Buses        69      112  -38%       406        308 +32%


    --------------------------------------------------------------------
    Revenue by Divisions  Q4       Q4  Change                     Change
     in millions of EUR  2008     2007  08/07     2008      2007   08/07
    --------------------------------------------------------------------
    Mercedes-
     Benz Cars          10,746   13,725  -22%    47,772     52,430  -9%
    Daimler Trucks       7,553    7,239   +4%    28,572     28,466  +0%
    Daimler Financial
     Services            2,480    2,251  +10%     9,282      8,711  +7%
    Vans, Buses, Other   3,713    4,308  -14%    14,970     14,123  +6%
       Mercedes-
        Benz Vans        2,199    2,614  -16%     9,479      9,341  +1%
       Daimler Buses     1,366    1,471   -7%     4,808      4,350 +11%


    --------------------------------------------------------------------
    Unit Sales           Q4       Q4   Change                     Change
     in units           2008     2007   08/07   2008       2007    08/07
    --------------------------------------------------------------------
    Daimler Group      480,055  575,353  -17% 2,072,876  2,088,973  -1%
    Mercedes-
     Benz Cars         284,956  364,627  -22% 1,273,013  1,293,184  -2%
    Daimler Trucks     118,859  118,720   +0%   472,074    467,667  +1%
    Mercedes-
     Benz Vans          66,702   80,971  -18%   287,198    289,073  -1%
    Daimler Buses        9,538   11,035  -14%    40,591     39,049  +4%


The figures in this document are preliminary and have neither been approved
yet by the Supervisory Board nor audited by the external auditor.

SOURCE Daimler AG

Website: http://www.media.daimler.com
Contact: Han Tjan, +1-212-909-9063, or Thomas Frohlich, +49 711 17 41361