Mercedes-benz Group Ag · XETR:MBG
Mercedes-benz — Daimler — Debt Investor Presentation (December 2019)
70 slides from Mercedes-benz's debt investor presentation, December 2019
Slide 1: Fixed Income Presentation FY 2019
DAIMLER AG Fixed Income Presentation FY 2019
Slide 2: I. Daimler AG 2019
I. Daimler AG 2019
Slide 3: Key Messages
OK DAIMLER AG KEY MESSAGES Mercedes-Benz safeguarded No.1 position in luxury segment, sales recovery in second half of year accomplished Underlying performance in line with 2019 Capital Market Day outlook; material adjustments booked Net Industrial Liquidity: target of >10 bn. euros achieved Strateg
Slide 4: Key Figures
DAIMLER AG KEY FIGURES 2019 172.7 SALES 2019 3.34 REVENUE in million units 2018 3.35 in billion euros 2018 167.4 2019 4.3 EBIT EBIT 2019 10.3 in billion euros 2018 11.1 adjusted in billion euros FREE FREE 1.4 2019 2019 CASH FLOW 2019 2.7 CASH FLOW 2018 2.9 2018 in billion euros adjusted in billion e
Slide 5: 2019 Group EBIT
DAIMLER 2019 GROUP EBIT in million euros +410 -556 11,132 -1,550 • Cars +318 • Cars -667 5,963 10,292 • Vans +82 • Vans -122 +25 +130 -5,262 • Trucks -48 • Trucks +192 • Buses +58 • Buses +41 • Cars -1,002 • Vans -33 • Trucks -434 • Buses -81 4,329 EBIT 2018 Volume/ Foreign Other cost Daimler Reconc
Slide 6: 2019 Adjustments in Group EBIT
DAIMLER 2019 ADJUSTMENTS IN GROUP EBIT in million euros 6
Slide 7: 2019 Net Industrial Liquidity
DAIMLER 2019 NET INDUSTRIAL LIQUIDITY in billion euros Free Cash Flow industrial business FY 2019: €1.4 billion +7.6 -10.6 +7.1 -2.1 16.3 -3.2 -0.6 -3.5 13.1 11.0 Net industrial Effects from Net industrial Earnings and Working Depreciation and Additions to Investments in Dividend Net industrial liqu
Slide 8: Financial Framework
DAIMLER FINANCIAL FRAMEWORK Equity & debt markets DAIMLER Dividend Funding MERCEDES-BENZ DAIMLER TRUCK DAIMLER MOBILITY (Subgroup) (Subgroup) (Subgroup) ▸ CAPITAL MARKET ACCESS ▸ GROUP FUNDING AND LIQUIDITY MANAGEMENT ▸ CAPITAL STRUCTURE ▸ CAPITAL ALLOCATION ▸ SET AND MONITOR PERFORMANCE TARGETS ▸ D
Slide 9: Strong Balance Sheet
STRONG BALANCE SHEET OBJECTIVES ▸ MAINTAIN “A” RATING ▸ NET INDUSTRIAL LIQUIDITY >10 BILLION EURO ▸ HEALTHY DEBT COVERAGE RATIO ▸ DMO LEVERAGE <12 (DEBT TO EQUITY) 9
Slide 10: Capital Allocation
DAIMLER CAPITAL ALLOCATION CapEx M&A Prioritization Disciplined allocation Cap/CCR Proactive portfolio management KPIs (IRR, FCF profile*) Preference for partnerships R&D/Projects Dividend policy Prioritization 40% of net profit Cap/CCR Dividend should be covered by KPIs (IRR, FCF profile*) industri
Slide 11: 2019 Dividend
DAIMLER 2019 DIVIDEND NET PROFIT 2019 2.7 in billion euros 2018 7.6 EARNINGS 2019 2.22 PER SHARE 2018 6.78 in euros 2018 DIVIDEND 2019 0.90 proposed in euros 2018 3.25 11
Slide 12: 2020 Outlook Group
2020 OUTLOOK GROUP Daimler Group EBIT Significant increase Free Cash Flow (industrial business) Significant increase* Investment in PP&E and R&D expenditure At prior-year level * excluding possible expenses relating to legal and governmental proceedings 12
Slide 13: II. Strategic Agenda 2020
II. Strategic Agenda 2020
Slide 14: Business Performance: Cash & Cost Measures
1. BUSINESS PERFORMANCE CASH & COST MEASURES Total investment in 2020 capped at 2019 level Aggressive material cost savings targets, e.g. cumulative RoS effect of 3% at Cars by 2022; 2020 target on track Streamline product portfolio, e.g. end of production X-Class in May Variable cost reduction, e.g
Slide 15: Business Performance: Personnel Cost Reduction
1. BUSINESS PERFORMANCE PERSONNEL COST REDUCTION 1.4 billion euros savings by 2022; headcount targets have been defined in each division; management positions to be reduced by 10% Measures agreed upon with social partners: termination offers, early retirement offers, more appealing part-time, reduct
Slide 16: Electrification: Roadmap EU CO2 Compliance
2. ELECTRIFICATION ROADMAP EU CO2 COMPLIANCE CO2 g/km, M1 fleet (Cars & Vans), NEDC ~137 2019 xEV, 48V Technical Super Phase-In Outlook Target & prognosis Credits 2020 2020 portfolio 2020 Mercedes-Benz EQC 400 4MATIC: combined power consumption: 16 20.8 - 19.7 kWh/100 km; combined CO2 emissions: 0 g
Slide 17: Electrification: Expanding xEV Portfolio
2. ELECTRIFICATION EXPANDING xEV PORTFOLIO Ramp-up of EQC production to meet high demand; smart from now on EV only; market launch EQV this summer; world premiere EQA later this year. More than 20 Plug-In hybrid variants by 2020; comprehensive roll-out of 48V technology Ramping-up battery production
Slide 18: Digitalization: We Make Our Claim in the Digital Realm
3. DIGITALIZATION WE MAKE OUR CLAIM IN THE DIGITAL REALM Rollout of latest MBUX system across entire fleet. New S-Class will raise the bar also in connectivity Thinking the car inside out: Concept defined for software-driven architecture Development of comprehensive operating system underway Growing
Slide 19: Leadership: Driving Transformation
4. LEADERSHIP DRIVING TRANSFORMATION We continue to drive cultural change across Daimler with Leadership 20X In line with new group structure we push empowerment, transparency & accountability Stronger focus on performance culture also reflected in cash flow component in management compensation 19
Slide 20: III. Divisional Review 2019
III. Divisional Review 2019
Slide 21: Mercedes-Benz Cars Highlights 2019
MERCEDES-BENZ CARS HIGHLIGHTS 2019 Mercedes-Benz leading luxury car brand; first time ever No.1 in premium segment in China Ramping-up supply of high-demand vehicles; significantly reduced inventories in Q4 Committed to carbon-neutral mobility: “Ambition 2039” defined, all-new EQC introduced to the
Slide 22: Mercedes-Benz Cars Financials
MERCEDES-BENZ CARS FINANCIALS SALES 2019 2.39 in million units 2018 2.38 REVENUE 2019 93.9 in billion euros 2018 93.1 EBIT 2019 3.4 in billion euros 2018 7.2 EBIT 2019 5.8 adjusted in billion euros 22
Slide 23: Mercedes-Benz Cars EBIT & RoS
MERCEDES-BENZ CARS Net pricing Foreign exchange rates EBIT & RoS Higher expenses for new technologies and product costs Valuation Aston Martin Governmental and legal proceedings and measures relating to diesel vehicles Expenses in connection with Takata airbags in million euros 7,216 +318 -667 -1,00
Slide 24: Mercedes-Benz Vans Highlights 2019
MERCEDES-BENZ VANS HIGHLIGHTS 2019 Continued sales growth to new record level New V-Class introduced and all-new EQV presented; series production of eSprinter started; development of new electric product in small-van segment Industrial situation stabilized Efficiency measures initiated Streamlining
Slide 25: Mercedes-Benz Vans Financials
MERCEDES-BENZ VANS FINANCIALS SALES 2019 438 in thousand units 2018 421 REVENUE 2019 14.8 in billion euros 2018 13.6 EBIT -3.1 2019 in billion euros 2018 0.3 EBIT 2019 0.3 adjusted in billion euros 25
Slide 26: Mercedes-Benz Vans EBIT & RoS
MERCEDES-BENZ VANS Higher unit sales Model mix EBIT & RoS Foreign exchange rates Higher expenses for new products and product-related cost Governmental and legal proceedings and measures relating to diesel vehicles Product portfolio review and prioritization in million euros Expenses in connection w
Slide 27: Daimler Trucks Highlights 2019
DAIMLER TRUCKS HIGHLIGHTS 2019 Daimler Trucks world’s leading truck manufacturer Strong performance in NAFTA despite softening market in Q4/2019 Launch of new Actros,“Truck of the year” EU market weakened faster than expected in Q4/2019; first effects from efficiency programs at MB Trucks EU Goal of
Slide 28: Daimler Trucks Financials
DAIMLER TRUCKS FINANCIALS SALES 2019 489 in thousand units 2018 517 2019 40.2 REVENUE in billion euros 2018 38.3 EBIT 2019 2.5 in billion euros 2018 2.8 28
Slide 29: Daimler Trucks EBIT & RoS
DAIMLER TRUCKS Higher unit sales in NAFTA region supported by positive foreign exchange rates Lower unit sales especially in the EU30 and Asia region EBIT & RoS Valuation adjustments for used trucks Higher expenses for new technologies and capacity adjustments in million euros +192 -434 2,753 -48 Ro
Slide 30: Daimler Buses Highlights 2019
DAIMLER BUSES HIGHLIGHTS 2019 Daimler Buses continues to be industry benchmark in profitability Maintained leading position in our core markets Serving high demand for our electric city bus eCitaro Delivered on target margin; continued efficiency effort 30
Slide 31: Daimler Buses Financials
DAIMLER BUSES FINANCIALS SALES 2019 33 in thousand units 2018 31 2019 4.7 REVENUE in billion euros 2018 4.5 EBIT 2019 283 in million euros 2018 265 31
Slide 32: Daimler Buses EBIT & RoS
DAIMLER BUSES EBIT & RoS Higher unit sales in million euros Foreign exchange rates Lower capitalization of development costs +41 -81 +58 283 265 RoS: RoS: 6.0% 5.9% EBIT 2018 Volume/ Foreign Other cost EBIT 2019 Structure/ exchange changes Net pricing rates 32
Slide 33: Daimler Mobility Highlights 2019
DAIMLER MOBILITY HIGHLIGHTS 2019 Continued strong support of industrial business: Financing about half of new vehicle sales Prudent risk management Maintained attractive returns despite higher equity demands due to regulatory requirements Start of YOUR NOW joint ventures and prioritization of mobili
Slide 34: Daimler Mobility Financials
DAIMLER MOBILITY FINANCIALS NEW 2019 74.4 BUSINESS 2018 71.9 in billion euros CONTRACT 2019 162.8 VOLUME 2018 154.1 in billion euros EBIT 2019 2.1 in billion euros 2018 1.4 EBIT 2019 1.8 adjusted in billion euros 34
Slide 35: Daimler Mobility EBIT & RoE
DAIMLER MOBILITY Higher contract volume Settlement of the Toll Collect arbitration proceedings in 2018 EBIT & RoE Normalization of cost of risk Merger of mobility services of Daimler and BMW Realignment of the YOUR NOW group in million euros +731 2,140 313 RoE: 1,827 +301 -150 15.3% +50 -176 RoE: 1,
Slide 36: 2020 Outlook Divisions
Key assumptions FX headwinds; no additional tariffs, no impact from Brexit; moderate GDP growth; no major political and economic crisis; 2020 OUTLOOK No major Corona virus impact, stable penetration rate, interest rate & regulatory environment; sales in line with luxury segment; significant truck ma
Slide 37: IV. Funding
IV. Funding
Slide 38: One Face to the Market
ONE FACE TO THE MARKET Daimler’s business model is based on a central liquidity and risk management * DPLTA: Domination and Profit & Loss Transfer Agreement 38
Slide 39: Daimler Follows a Prudent Financial Policy
DAIMLER FOLLOWS A PRUDENT FINANCIAL POLICY Financial Stability Balanced Dividend Pensions: approach policy Clear keeping between • 40% pay-out No share commitment ratio* funded ratio at shareholder buybacks to a single A • Dividend should high level interest and be covered by planned rating (current
Slide 40: Our Funding Strategy Is Built on Strict Principles
OUR FUNDING STRATEGY IS BUILT ON STRICT PRINCIPLES No dependence from single markets, instruments, banks or investors Targeting Diversification of funding sources and instruments: Financial Bank Loans, Bonds, ABS, CP, Deposits Independence No Covenants, no MAC, no asset pledges, no CSAs Maximizing K
Slide 41: New Corporate Structure but No Change to One Credit Approach
NEW CORPORATE STRUCTURE BUT NO CHANGE TO ‘ONE CREDIT’ APPROACH / FINANCIAL RISK STEERING ON GROUP LEVEL DPLTAs between Daimler AG and Mercedes-Benz AG, Daimler Truck AG and Daimler Mobility AG as centerpiece of the DPLTA* new structure from a financing perspective Maintains access to all operati
Slide 42: Committed to Keep a Prudent Level of Gross Liquidity
DAIMLER COMMITTED TO KEEP A PRUDENT LEVEL OF GROSS LIQUIDITY Gross Group Liquidity (in bn EUR) Net Industrial Liquidity (in bn EUR) DMO Industrial Business 27.5 25.4 3.9 19.7 22.1 18.6 21.7 4.3 16.6 16.3 3.5 3.7 18.2 2.8 11.0 23.7 21.2 18.2 18.4 15.4 2015 2016 2017 2018 Q4 2019 2015 2016 2017 2018 Q
Slide 43: 2019 Financial Flexibility
DAIMLER 2019 FINANCIAL in billion euros FLEXIBILITY OVER A 12-MONTH PERIOD 60.9 55.7 Other, incl. The financial flexibility provides support to mitigate risk finance lease and volatility through a balanced mix of funding ABS potential Commercial instruments and clear principles paper Bank loans Daim
Slide 44: Sustainable Portfolio at Daimler Mobility
SUSTAINABLE PORTFOLIO AT DAIMLER MOBILITY Wholesale 163 154 140 Loan 133 117 Lease 99 Others 80 84 71 72 74 Trucks Portfolio 72 62 (in bn €) 64 58 Buses 48 38 41 Vans Acquisitions 34 (in bn €) 29 Passengers Cars 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 44
Slide 45: Mobility Business Model Based on Stringent Credit Management and Solid Refinancing
DAIMLER MOBILITY BUSINESS MODEL BASED ON STRINGENT CREDIT MANAGEMENT AND SOLID REFINANCING Net credit losses as a percentage of portfolio, subject to credit risk Portfolio performs on an excellent level, based on an outstanding acquisition quality The matched-funded approach ensures that liquidity r
Slide 46: Financing Liabilities Show a Diversified Funding Mix
FINANCING LIABILITIES SHOW A DIVERSIFIED FUNDING MIX in billions of EUR Fin. Lease (IFRS 16) Acc. Deposits Other (ex Fin. Lease) Bank Loans Com. Paper Bonds ABS 161.8 0.0 4.2 145.0 2.0 13.9 1.8 127.4 0.0 12.5 2.8 3.3 13.1 117.6 0.0 2.0 11.0 11.8 1.0 1.0 100.6 0.0 10.6 1.7 11.5 39.8 1.5 11.6 39.4 7.4
Slide 47: Balanced Mix of Funding Instruments
TO ENSURE SUSTAINABLE PORTFOLIO GROWTH, WE MITIGATE RISK AND VOLATILITY THROUGH A BALANCED MIX OF FUNDING INSTRUMENTS Capital Markets Strengthen our global footprint and use market opportunities Other Fin. Lease (IFRS 16) 1% 3% Deepen our excellent Bank Loans bank relationships Bank loans 20% Bank l
Slide 48: Consequent Development to Global Capital Market Funding
CONSEQUENT DEVELOPMENT TO GLOBAL CAPITAL MARKET FUNDING - DIVERSIFICATION WILL CONTINUE Canada EMTN Domestic Bonds Euro Market ABS Korea CP EMTN Program Italian domestic Domestic Bond Prog. EUR CP Program ABS China USA Japan Turkey Domestic Bonds 144a / RegS PP Domestic CP ABS CP Domestic Bonds EMTN
Slide 49: Funding Base Further Diversified to a True Global Set-up
FUNDING BASE FURTHER DIVERSIFIED TO A TRUE GLOBAL SET-UP in billions of EUR 161,8 3% 1% 9% 2% Currency Volume % 8% EUR 39,4 46% USD 29,1 34% CNY 4,0 5% GBP 3,7 4% 25% CAD 2,8 3% Currency Volume % ZAR 1,8 2% EUR 19,5 66% KRW 0,9 1% USD 7,8 27% AUD 0,7 1% Fin. Lease (IFRS 16) ZAR 0,8 3% MXN 0,6 1% 0%
Slide 50: Maturity Profile Further Lengthened
MATURITY PROFILE FURTHER LENGTHENED in billions of EUR as of 31 December 2019 17.8 18.3 0.6 1.8 Bonds Issued in 2019 Bond Maturities 13.3 7.3 17.2 8.0 16.5 7.1 3.7 2.9 3.7 3.4 3.0 3.1 6.0 1.3 2.1 2.4 4.3 4.2 3.7 2.0 0.9 1.8 1.3 0.9 2.1 2.1 0.5 1.0 1.5 0.7 0.2 1.3 2020 2021 2022 2023 2024 2025 2026 2
Slide 51: Syndicated Credit Facility Extended
SYNDICATED CREDIT FACILITY EXTENDED In July 2019 Daimler extended its EUR 11bn Syndicated Credit Facility until 2024 Syndicate of 44 international banks No covenants, rating triggers etc. Securing significant long-term liquidity at favorable cost No intention to draw the credit facility 51
Slide 52: Solid Rating Supports Daimler's Funding
SOLID RATING SUPPORTS DAIMLER‘S FUNDING Agency Long-term Outlook Short-term Current ratings: S&P: A- Negative A-2 Moody’s: A3 Negative P-2 Fitch: A- Stable F1 DBRS: A Negative R-1 (low) Scope: A Stable S-1 Daimler target: Sustaining the A rating with all rating agencies 52
Slide 53: High Contributions Stabilized Funded Ratio
IN LOW INTEREST RATE ENVIRONMENT HIGH CONTRIBUTIONS STABILIZED FUNDED RATIO 14 11.5 12 9.8 10 8.6 8.4 7.8 in EUR bn 8 7.4 6.2 6 3.4 4.5 3.7 Significant contributions of EUR 4 3.1 2.2 2.0 1.1 1.9 2.4 16.5bn since 2010 support the 2 0.3 0.5 0.7 0.7 0 solid capital structure 2010 2011 2012 2013 2014
Slide 54: V. Sustainability
V. Sustainability
Slide 55: Our Sustainable Business Strategy
OUR SUSTAINABLE BUSINESS STRATEGY 55
Slide 56: Climate Protection – Mercedes-Benz Ambition 2039
CLIMATE PROTECTION – MERCEDES BENZ AMBITION 2039 56
Slide 57: Mercedes-Benz Electrifying Our Entire Portfolio
MERCEDES-BENZ ELECTRIFYING OUR ENTIRE PORTFOLIO ▸ COMPREHENSIVE ROLL-OUT OF 48 VOLT TECHNOLOGY ▸ >20 NEW XEV LAUNCHES UNTIL 2022 2019 2020 2021 Gradual ~2% xEV share ~9% xEV share ~15% xEV share xEV increase 57
Slide 58: Climate Protection – Daimler Trucks Ambition 2039
CLIMATE PROTECTION – DAIMLER TRUCKS AMBITION 2039 ▸ Daimler Trucks & Buses aims to achieve CO₂ neutrality by 2039 for new vehicles in the triad markets of Europe, Japan and NAFTA. ▸ By 2022, we plan to include series-produced vehicles with battery- electric drive in our vehicle portfolio in our main
Slide 59: Daimler Trucks Alternative Powertrain Solutions to Reduce Emissions
DAIMLER TRUCKS ALTERNATIVE POWERTRAIN SOLUTIONS TO REDUCE EMISSIONS CO2 baseline setting ~ 1.1% p.a. -15% -30% ~ 2.7% p.a. Fuel cell BEV 1996 2016 2019 MB SK MB Actros Actros V 1996 2016 2019 2025 2030 59
Slide 60: Appendix
Appendix
Slide 61: 2019 Key Balance Sheet and Financial Figures
DAIMLER 2019 KEY BALANCE SHEET AND FINANCIAL FIGURES in billion euros Daimler Group Dec. 31, 2018 Dec. 31, 2019 Equity ratio 22.2% 20.5% Gross liquidity 25.4 27.5 Funded status of pension obligations -6.2 -8.4 Funding ratio 80% 77%* Industrial business Equity ratio 42.8% 36.7% Net liquidity 16.3 11.
Slide 62: Reconciliation of EBIT Reported to EBIT Adjusted
DAIMLER 2019 RECONCILIATION OF EBIT REPORTED TO EBIT ADJUSTED in million euros Mercedes- Mercedes- Daimler Daimler Daimler Reconcil- Daimler Benz Cars Benz Vans Trucks Buses Mobility iation Group EBIT as reported 2019 3,359 -3,085 2,463 283 2,140 -831 4,329 Legal proceedings and related 2,482 2,541
Slide 63: Capital Expenditure / Research and Development
DAIMLER 2019 CAPITAL EXPENDITURE / RESEARCH AND DEVELOPMENT in billion euros Investment in property, plant Research and development and equipment expenditure Actual Actual Plan* Actual Actual Plan* 2018 2019 2020-2021 2018 2019 2020-2021 Daimler Group 7.5 7.2 6.9 9.1 9.7 9.4 of which Mercedes-Benz C
Slide 64: Daimler Mobility Net Credit Losses
DAIMLER MOBILITY NET CREDIT LOSSES* 0.89% 0.83% 0.69% 0.68% 0.61% 0.50% 0.51% 0.36% 0.43% 0.34% 0.37% 0.31% 0.31% 0.24% 0.26% 0.26% 0.21% * as a percentage of portfolio, subject to credit risk 64
Slide 65: 2020 Outlook: Assumptions for Automotive Markets
2020 OUTLOOK ASSUMPTIONS FOR AUTOMOTIVE MARKETS CAR MARKETS Global around the prior-year level Europe around the prior-year level USA slight decrease China around the prior-year level VAN MARKETS EU30 around the prior-year level USA slight growth HEAVY-DUTY NAFTA region significant decrease TRUCK MA
Slide 66: 2020 Outlook: Unit Sales
2020 OUTLOOK UNIT SALES Mercedes-Benz Cars SLIGHTLY LOWER UNIT SALES More than half a dozen new and upgraded vehicles Continuation of the electric mobility offensive Mercedes-Benz Vans SLIGHTLY LOWER UNIT SALES Daimler Trucks SLIGHTLY LOWER UNIT SALES Normalization of major truck markets Daimler Bus
Slide 67: 2020 Outlook: Revenue
2020 OUTLOOK REVENUE REVENUE AT THE PRIOR-YEAR LEVEL Mercedes-Benz REVENUE AT THE PRIOR-YEAR LEVEL Cars & Vans Daimler SIGNIFICANT DECREASE IN REVENUE Trucks & Buses Daimler Mobility REVENUE AT THE PRIOR-YEAR LEVEL 67
Slide 68: 2020 Outlook: Group EBIT and Divisional RoS/RoE
2020 OUTLOOK GROUP EBIT AND DIVISIONAL ROS/ROE WE EXPECT GROUP EBIT FOR FY 2020 TO BE SIGNIFICANTLY ABOVE THE PRIOR-YEAR LEVEL Mercedes-Benz RETURN ON SALES ADJUSTED: 4 TO 5% Cars & Vans Daimler RETURN ON SALES ADJUSTED: 5% Trucks & Buses Daimler Mobility RETURN ON EQUITY ADJUSTED: 12% 68
Slide 69: 2020 Outlook: Capital Allocation
2020 OUTLOOK CAPITAL ALLOCATION INVESTMENT IN PP&E Daimler Group At the prior-year level AND R&D EXPENDITURE FREE CASH FLOW Industrial business Significantly above prior-year level* CASH CONVERSION RATE Cars & Vans 0.7x to 0.9x ADJUSTED Trucks & Buses 0.8x to 1.0x * excluding possible expenses relat
Slide 70: Disclaimer
DAIMLER 2019 DISCLAIMER This document 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 f