Mercedes-benz Group Ag · XETR:MBG
Mercedes-benz — Daimler — Debt Investor Presentation (2021)
67 slides from Mercedes-benz's debt investor presentation, 2021
Slide 1: Fixed Income Presentation Q2 2021
Fixed Income Presentation Q2 2021 Daimler AG Daimler AG Fixed Income Presentation | Q2 2021 1
Slide 2: Agenda
AGENDA I. DAIMLER AG REVIEW Q2 2021 II. DIVISIONAL REVIEW Q2 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Daimler AG Fixed Income Presentation | Q2 2021 2
Slide 3: Daimler: Key messages
Daimler: Key messages ▸ Good earnings momentum in all businesses. Strong results show improved resilience ▸ Comfortable level of Net Industrial Liquidity and Free Cash Flow supporting financial flexibility ▸ Continued strategy execution, ramp-up of EV portfolio in all divisions ▸ Project Focus: cont
Slide 4: Daimler key figures: Good operating business performance
Daimler key figures: Good operating business performance, positive impact from implemented cost measures and strong cash conversion Free Cash Net Industrial Sales Revenue EBIT EBIT adj. in thousand units in billion euros in billion euros in billion euros Flow (IB) Liquidity in billion euros in billi
Slide 5: Reconciliation from CFBIT to Free Cash Flow
Daimler Q2 2021 reconciliation from CFBIT to Free Cash Flow: On our way towards a cash flow oriented culture in million euros +667 -724 +364 2,950 2,502 +38 +91 +12 2,586 • Legal proceedings +207 • Restructuring measures +129 • M&A transactions +27 CFBIT CFBIT Income Interest Effects from Other Free
Slide 6: Daimler Net Industrial Liquidity
Daimler Net Industrial Liquidity: Healthy Net Cash position leaves us with a significant financial flexibility in billion euros +1.8 -1.7 +2.8 -0.3 0.0 -1.8 20.9 20.1 Free cash flow industrial business Q2 2021: € 2,586 million Net industrial Earnings and Working Depreciation and Additions to Investm
Slide 7: YTD Q2 2021 development of gross industrial liquidity
Daimler YTD Q2 2021 development of gross industrial liquidity Financial Services in billion euros Industrial Business 4.7 -3.8 7.4 -8.7 4.4 -4.8 6.1 -1.0 32.0 29.4 -1.7 4.5 3.6 25.8 27.6 Gross Dividend FCF FCF Other ABS New Bond New FX & Gross Liquidity Payment IB DMO Debt Maturities ABS Maturities
Slide 8: Q2 2021 financial flexibility over a 12-month period
Daimler Q2 2021 financial flexibility over a 12-month period in billion euros 65.7 Other incl. ABS potential Fin. Lease Net industrial liquidity at €20.9 billion improved significantly 50.4 Commercial paper Gross industrial liquidity at €27.6 billion Bank loans Credit facility Financial flexibility
Slide 9: Agenda
AGENDA I. DAIMLER AG REVIEW Q2 2021 II. DIVISIONAL REVIEW Q2 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Fixed Income Presentation | Q2 2021 9
Slide 10: Mercedes-Benz Cars: Highlights
Mercedes-Benz Cars: Highlights ▸ Mercedes-Benz: 511,000 cars sold (wholesale), new sales record in China, order intake on high level driven by new S-Class ▸ Sales significantly influenced by ongoing semiconductor shortages ▸ Global xEV sales at Mercedes-Benz Cars more than quadrupled in H1 2021, EV
Slide 11: Mercedes-Benz Cars & Vans financials
Mercedes-Benz Cars & Vans financials: Strong performance in the top line Sales Revenue EBIT adj. CFBIT adj. in thousand units in billion euros in billion euros in billion euros 28.2 620 3.6 18.9 481 2.8 +29% +49% +3.9 +437% 0.5 -0.3 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 For
Slide 12: Mercedes-Benz Cars & Vans EBIT FY & RoS
Mercedes-Benz Cars & Vans EBIT FY & RoS: Favourable sales momentum translated in a significant increase in volume, structure and pricing Higher unit sales Favourable product mix in million euros Gross profit +4,461 Improved net pricing Higher expenses mainly due to positive short-time work effect in
Slide 13: Mercedes-Benz Cars & Vans Reconciliation from EBIT to CFBIT
Mercedes-Benz Cars & Vans Reconciliation from EBIT to CFBIT: reflecting rigorous approach in terms of capital allocation in million euros 3,438 -179 -9 -1,588 +1,546 -706 +303 2,805 2,502 t/o • Legal Proceedings +207 • Result at-equity BBAC -391 • Restructuring +96 EBIT Change in Net financial Net i
Slide 14: Daimler Trucks & Buses: Highlights
MD Daimler Trucks & Buses: Highlights ▸ Increase of truck and bus sales in almost all regions due to improved market conditions ▸ Incoming truck and bus orders in all regions significantly above prior year’s quarter, but limited by available production capacity in 2021 ▸ Limited impact from semicond
Slide 15: Daimler Trucks & Buses Financials
Daimler Trucks & Buses Financials: Strong sales despite semiconductor shortages Sales Revenue EBIT adj. CFBIT adj. in thousand units in billion euros in million euros in million euros 116.8 10.0 831 6.2 693 61.0 +91% +61% +1,578 +814 -747 -121 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020
Slide 16: Daimler Trucks & Buses EBIT & RoS
Daimler Trucks & Buses EBIT & RoS: Positive volume, structure and net pricing Increase of truck and bus sales in almost all regions due to improved market conditions Lower expenses for customer service Significantly higher contribution from aftermarket due to higher demand in million euros Gross pro
Slide 17: Daimler Trucks & Buses reconciliation from EBIT to CFBIT
Daimler Trucks & Buses reconciliation from EBIT to CFBIT: Underlining our focused investment approach in million euros 819 -121 +274 -195 -2 -108 667 +26 693 • Restructuring measures +26 EBIT Change in Net financial Net investments Depreciation and Other CFBIT Adjustments CFBIT Q2 2021 working capit
Slide 18: Daimler Mobility: Highlights
Daimler Mobility: Highlights ▸ Higher new business driven by strong customer loyalty, especially in Europe, and Covid-impact in previous year ▸ Strong growth of acquisitions for electric vehicles supporting EV sales ▸ Lower credit risk reserves and still low net credit losses reflecting high portfol
Slide 19: Daimler Mobility Financials
Daimler Mobility Financials: Significant increase in EBIT adj., driven also by non-recurring items New Contract EBIT adj. business volume in million euros in billion euros in billion euros 930 17.2 150.6 150.6 14.0 +23% 0% 313 +197% Q2 2020 Q2 2021 12/31/2020 6/30/2021 Q2 2020 Q2 2021 For more detai
Slide 20: Daimler Mobility EBIT & RoE
Daimler Mobility EBIT & RoE: Main impact from lower credit risk provisions and higher interest margins Lower credit risk reserve due to quick response to Covid-19 pandemic in 2020 Margin benefiting from lower refinancing costs Improved operative business performance at Mobility Services and Fleet Ma
Slide 21: Agenda
AGENDA I. DAIMLER AG REVIEW Q2 2021 II. DIVISIONAL REVIEW Q2 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Daimler AG Fixed Income Presentation | Q2 2021 21
Slide 22: Market Guidance 2021
Market Guidance 2021 ASSUMPTION Our expectations for the development of business in 2021 are based on the assumption of a gradual normalization of economic conditions in the markets that are important to us. In particular, we assume that the world economy will be able to recover from the pandemic-re
Slide 23: Daimler Group Guidance 2021
Daimler Group Guidance 2021 ASSUMPTION Our expectations for the development of business in 2021 are based on the assumption of a gradual normalization of economic conditions in the markets that are important to us. In particular, we assume that the world economy will be able to recover from the pand
Slide 24: Divisional Guidance 2021
Divisional Guidance 2021 ASSUMPTION Our expectations for the development of business in 2021 are based on the assumption of a gradual normalization of economic conditions in the markets that are important to us. In particular, we assume that the world economy will be able to recover from the pandemi
Slide 25: Agenda
AGENDA I. DAIMLER AG REVIEW Q2 2021 II. DIVISIONAL REVIEW Q2 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Daimler AG Fixed Income Presentation | Q2 2021 25
Slide 26: Separation of Daimler into two pure-play companies
Separation of Daimler into two pure-play companies: Driving value creation, greater focus and financial discipline TODAY TOMORROW DAIMLER MERCEDES-BENZ DAIMLER TRUCK MERCEDES- DAIMLER DAIMLER BENZ TRUCK MOBILITY MERCEDES- FINANCIAL BENZ SERVICES MOBILITY Separate ▸ Capital Structure and Rating ▸ Cap
Slide 27: Daimler Truck AG majority spin-off: Intended transaction structure and key messages
Daimler Project TruckFixed Focus: AG majority Income spin-off: Intended transaction structure and key messages details Strong balance sheet: 20 bn Euro Net Industrial liquidity end of Q1 2021 Solid financial position for both entities at Day 1: net industrial liquidity exceeding pensions deficit Dai
Slide 28: Project Focus: Mercedes-Benz, the pre-eminent luxury car business
Project Focus: Mercedes-Benz, the pre-eminent luxury car business Mercedes-Benz Leading Global “pure play” OEM with unique brand recognition automotive “Ambition 2039” amplifying clear commitment to Sustainability as strategic priority luxury brand Attractive captive financial services business supp
Slide 29: Project Focus: Daimler Truck unlocking the full potential
Project Focus: Daimler Truck unlocking the full potential Daimler Truck Global Global market presence with market-leading brands in triad markets #1 Ready to seize opportunities in emerging markets CV player Leverage existing global platforms to turn scale into profit Lead in Powertrain: technologic
Slide 30: Structure of the planned transaction
Structure of the planned transaction Separate listing of Daimler Truck Distribution of Daimler Truck shares held by Daimler to existing Daimler shareholders Majority in free-float, Daimler ceases control over DT but intends to retain a minority shareholding No additional investment needed from share
Slide 31: Daimler Truck AG majority spin-off: Intended transaction structure and details
Daimler Daimler Truck Truck AGAG majority majority spin-off: spin-off: Intended Intended transaction transaction structure structure and and details details Transfer of the majority of Daimler Truck to Daimler shareholders True independent governance of Attractive financial profiles Prime listing fo
Slide 32: The listing of Daimler Truck is planned to be complete by year-end 2021
The listing of Daimler Truck is planned to be complete by year-end 2021 Decision & Extraordinary Listing of Announcement of Shareholder Meeting Daimler Truck Project Focus planned targeted February 3, 2021 May 20, 2021 Fall 2021 November 4, End of 2021 2021 Capital Market Update Capital Market Day D
Slide 33: Daimler Truck: Our mission as an independent company is clear
Daimler Truck: Our mission as an independent company is clear RESET PROFITABILITY LEAD THE WAY TO ZERO EMISSIONS ▸ Intense focus on fixing Europe ▸ Seek cost and performance leadership ▸ Target profit benchmarks in each region ▸ Dual-track BEV and FCEV strategy ▸ No excuses: every region must delive
Slide 34: Reset profitability at Daimler Truck
Reset profitability at Daimler Truck: Willing to take the hard decisions to create value for shareholders OUR STRATEGIC FINANCIAL GOALS LOWER TARGET REGIONAL FOCUS ON BREAKEVEN TO PROFIT HIGHEST RETURN MANAGE BENCHMARKS SEGMENTS CYCLICALITY SYSTEMATIC GROW NO EXCUSES: LOWERING OF SERVICES AND EVERY
Slide 35: Lead the way to zero emissions
Lead the way to zero emissions: We are going ‘all in’ on zero-emission trucks to achieve technology leadership OUR STRATEGIC TECHNOLOGY GOALS TECHNOLOGY BUSINESS AMBITIOUS COST PATH SET ROADMAP FOR TARGETS FOR TO GET TO ZEV IN PLACE ZEV & TCO PARITY ZERO EMISSIONS IN-HOUSE TECH DEDICATED BEV FCEV FO
Slide 36: Our 2025 financial ambitions for Daimler Truck
Our 2025 financial ambitions for Daimler Truck: Unlock potential; manage cyclicality; fully reward shareholders MARKET ENVIRONMENT FIXED COST -15% VS. 2019 CAPEX / R&D -15% VS. 2019 PROFITABILITY 6 - 7% 8 - 9% >10% CASH CONVERSION 0.8 - 1.0X FULL FINANCIAL TARGETS AND GUIDANCE TO BE PROVIDED AHEAD O
Slide 37: Agenda
AGENDA I. DAIMLER AG REVIEW Q2 2021 II. DIVISIONAL REVIEW Q2 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Fixed Income Presentation | Q2 2021 37
Slide 38: 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 39: Portfolio development of Daimler Mobility stabilized in 2021
Portfolio development of Daimler Mobility stabilized in 2021 Wholesale 163 Loan 150 150 151 140 Lease 133 117 99 Trucks & Buses about 20% of 80 84 portfolio Trucks Others 71 72 74 Portfolio 68 62 Buses (in bn €) 58 48 38 41 Vans Acquisitions 34 (in bn €) 2012 2013 2014 2015 2016 2017 2018 2019 2020
Slide 40: Daimler Mobility business model based on stringent credit management
Daimler Mobility business model based on stringent credit management and solid refinancing Net credit losses as a percentage of portfolio, subject to credit risk Net credit losses still on a low level reflecting high portfolio quality, not showing any severe CoViD-19 impact Despite expected macroeco
Slide 41: Well balanced Bond Maturity Profile
Well balanced Bond Maturity Profile in billions of € as of 30 June 2021 Issued in 2021 Maturities 15.2 0.6 11.8 0.6 9.5 9.9 2.6 14.6 6.1 0.0 5.1 11.3 0.9 3.5 3.4 7.3 3.1 6.1 2.3 0.4 2.0 4.2 1.3 3.0 1.0 0.5 1.0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2033 2034 2037 Duration of Bondmatu
Slide 42: Financing liabilities show a diversified funding mix
Financing liabilities show a diversified funding mix in billions of € Fin. Lease (IFRS 16) Acc. Deposits Other (ex Fin. Lease) Bank Loans Com. Paper Bonds ABS 161.8 3% 145.0 0% 145.8 3% 142.6 2% 1% 9% 1% 1% 1% 127.4 0% 9% 2% 2% 8% 11% 0% 0% 2% 13% 9% 8% 1% 10% 9% 10% 25% 27% 22% 21% 27% 53% 53% 53%
Slide 43: 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% 2% Deepen our excellent Bank Loans bank relationships Bank loans Bank loans
Slide 44: Diversified global funding base
Diversified global funding base: continuously matched with DMO requirements Canada EMTN Domestic Bonds ABS Euro Market Japan CP EMTN Program Domestic CP EUR CP Program EMTN USA ABS China ABS 144a / RegS PP Italian domestic Turkey Domestic Bonds CP Hungarian domestic Domestic Bonds ABS ABS Korea Dome
Slide 45: Daimler's financial KPIs set to support a strong rating
Daimler‘s financial KPIs set to support a strong rating Agency Long-term Outlook Short-term Standard & Poor's: A- Stable A-2 Moody’s: A3 Stable P-2 Current Ratings: Fitch: BBB+ Positive F1 DBRS: BBB (high) Stable R-2 (high) Scope: A Stable S-1 Fixed Income Presentation | Q2 2021 45
Slide 46: Pension provision and discount rate
In low interest rate environment high contributions stabilized funded ratio 14 11.5 11.0 12 9.8 10 8.6 8.4 8.4 7.4 7.8 in EUR bn 8 6 6.2 Significant contributions of 4.5 4 3.4 2.2 2.0 3.1 2.4 3.7 EUR 17.4bn since 2010 1.9 2 0.3 1.1 0.5 0.7 0.7 0.8 0.2 support the solid capital 0 2010 2011 2012 2013
Slide 47: Agenda
AGENDA I. DAIMLER AG REVIEW Q2 2021 II. DIVISIONAL REVIEW Q2 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Daimler AG Fixed Income Presentation | Q2 2021 47
Slide 48: Sustainability is an integral part of our divisional business strategies
Sustainbaility is an integral part of our divisional business strategies We aim to achieve New vehicles in Europe, We intend to have CO2 neutrality Japan and North globally CO2-neutral • for our new passenger America are planned to locations and car fleet by be CO2 neutral in administration by • ope
Slide 49: Sustainable value for all stakeholder groups
Sustainable value for all stakeholder groups Climate protection Resource Livable & air quality conservation cities Traffic safety Data responsibility Human rights Integrity People Partnerships Daimler AG Fixed Income Presentation | Q2 2021 49
Slide 50: Mercedes-Benz Cars: Ambition 2039
Mercedes-Benz Cars: With our Ambition 2039 we put a stake into the ground Our ambition: carbon-neutrality by 2039 Now it’s time to accelerate with the full and rapid electrification of our products Daimler AG Fixed Income Presentation | Q2 2021 50
Slide 51: The electric product rollout of Mercedes-Benz Cars
The electric product rollout of Mercedes-Benz Cars is running at full speed Deliveries of PHEV and BEVs up 300% in H1, accounting for over 10% of overall sales 2021 EQA EQB In 2021 alone, we are introducing four new battery electric vehicles Next year we will present SUV versions of EQS EQE our EQS
Slide 52: Focus of Mercedes-Benz Cars will be on BEV only
At the end of the decade, the focus of Mercedes-Benz Cars will be on BEV only By 2025 our customers will be able to choose an all-electric alternative for every model we make It’s our ambition to drive the plug-in hybrid & BEV share up to 50% in 2025. By the end of the decade, we will be ready to go
Slide 53: Mercedes-Benz Cars will expand its activities in battery cells and systems
Mercedes-Benz Cars will expand its activities in battery cells and systems Needed battery volume for all car lines We will install a capacity of more than 200 Gigawatt hours 200 Gwh We will set up 8 battery cell factories around the world: one in the U.S., four in Europe – with our existing strategi
Slide 54: Green and CO2 neutral supply chain
Mercedes-Benz Cars is establishing a green and CO2 neutral supply chain Raw materials In the future, raw materials for battery components only from IRMA-certified mines Processed materials & components Recycling Intention to partner with lithium producer Albemarle for future lithium supply, lithium
Slide 55: Mercedes-Benz Cars is ready to accelerate EV production
Mercedes-Benz Cars is ready to accelerate EV production Bremen Kamenz Ready to scale up: our largest plants in Beijing, Bremen, Stuttgart Jawor Kecskemét, Rastatt, Sindelfingen, and Tuscaloosa are all Sindelfingen Kecskemét capable of building EVs and are currently assembling 5 Rastatt different BEV
Slide 56: Closing the loop: from value chain to value cycle
Mercedes-Benz Cars is closing the loop: from value chain to value cycle 2022: Carbon-neutral production at all Mercedes- Benz AG passenger car and battery assembly sites Establishing remanufacturing processes and repurpose of key components, e.g. batteries can be reused to help balance electricity g
Slide 57: Re-shape Re-skill Re-charge: transformation of our workforce
Mercedes-Benz Cars: The transformation of our workforce Re-shape Re-skill Re-charge Streamlining Developing Meeting the our organization in a future-oriented Mercedes-Benz standard responsible way qualifications as an employer Continue effective process of cost reduction Ensure that motivated and qu
Slide 58: Convictions driving Daimler Truck's propulsion system strategy
Convictions driving Daimler Truck’s propulsion system strategy WE WILL WE ARE COMMITTED WE WILL MOVE RAMP DOWN TO BOTH BEV & RAPIDLY TO WIN CURRENT ICE HYDROGEN THE PROPULSION POWERTRAIN SOLUTIONS TECHNOLOGY RACE Manage the ICE ramp- BEV and FCEV We have the right down while staying are complementar
Slide 59: Dual zero-emission strategy: battery electric and fuel-cell electric
Daimler Trucks: infrastructure requires a dual zero-emission strategy Battery electric and fuel-cell electric – both technologies needed REVERSED SCALING EFFECTS ZEV PENETRATION LOW HIGH H2 LEVERAGING REFUELING EFFICIENCY AND EXISTING ENERGY CAPACITIES H2 PRODUCTION PLANNED HUB CHARGING FLEXIBLE ON-
Slide 60: The transition to ZEV at Daimler Trucks
The transition to ZEV at Daimler Trucks: High potential variability in timing – but we are ready for any outcome DT KEY 2030 ASSUMPTIONS TCO OUTCOMES UP TO 60% ZEV ▸ Governmental support incl. ▸ Parity for BEV 100% 100% carbon pricing & infrastructure possible after 2025 ICE ZEV ▸ Zero emission PT c
Slide 61: ZEV technology: Both BEV and Hydrogen will be needed
ZEV technology : Both BEV and Hydrogen will be needed – three key factors drive the dual strategy of Daimler Truck COST PER RANGE: ENERGY DENSITY/CHARGING: GLOBAL ENERGY ECOSYSTEM: “THESE LINES MUST CROSS” “THESE LINES NEVER CROSS” “WILL BE ESTABLISHED ANYWAY” BEV (cell volume) ENERGY 3-15 x COST FC
Slide 62: On the road to CO2-neutral production
On the road to CO2-neutral production By 2022: CO -neutral production at our Mercedes-Benz Car and Van plants worldwide* 2 By 2022: CO -neutral production at our European plants of Daimler Trucks & Buses* 2 By 2030: Fifty percent CO emissions reductions from production operations 2 SBTI By 2039: CO
Slide 63: Our strategy is guided by international framework agreements
Our strategy is guided by international framework agreements,… The ten principles of the UN Global Compact provide a fundamental guide for our business operations. Our internal principles and policies are founded on this international frame of reference and other international principles. Our goal i
Slide 64: Corporate principles and integrity
… our corporate principles and integrity. Doing the right thing by living our values We adhere to internal and external rules, we act according to our corporate principles and we listen to our inner compass. We have incorporated integrity-related issues in our culture and our compliance management s
Slide 65: Daimler's green finance framework
Daimler’s green finance framework is part of our sustainable business strategy Project Use of Management External evaluation Reporting* proceeds of proceeds review and selection Daimler’s green finance framework is developed to be in line with both the ICMA Green Bond Principles, as well as LMA and
Slide 66: Second Opinion on green finance framework
Second Opinion by leading provider of independent reviews of green bonds SHADES OF GREEN Daimler’s green finance framework was rated by CICERO as Dark Green. Dark Green is allocated to projects and solutions that correspond to the long-term vision of a low carbon and climate resilient future. GOVE
Slide 67: Disclaimer
Daimler Q2 2021 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 identif