Slide 1: Fixed Income Presentation Q3 2021
Fixed Income Presentation Q3 2021 Daimler AG Daimler AG
Slide 2: Agenda
AGENDA I. DAIMLER AG REVIEW Q3 2021 II. DIVISIONAL REVIEW Q3 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Daimler AG Fixed Income Presentation | Q3 2021 2
Slide 3: Daimler: Key messages
Daimler: Key messages ▸ Business development Q3: strongly influenced by supply constraints due to semiconductor shortage; resilience of business further improved ▸ Favorable development of Net Industrial Liquidity & Free Cash Flow supporting financial flexibility ▸ Strategy execution: ramp-up of EV
Slide 4: Q3/Q4 Reporting Changes
Q3/Q4 Reporting Changes Group P&L (Financial Statements)1 Segment P&L Q3/Q4/FY Until Q3 2021 (unchanged) Continued Mainly: Mercedes-Benz Cars & Vans, Mercedes-Benz Daimler Daimler Trucks Reconciliation Operations (CO) Daimler Mobility², Reconciliation Cars & Vans Mobility & Buses Presented as usual
Slide 5: Daimler key figures Q3 2021
Daimler key figures: Despite significantly lower volumes, revenue was at about last year’s third quarter 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 billion euros 40.3 40.1 5.1 773
Slide 6: Daimler Net Industrial Liquidity
Daimler Net Industrial Liquidity*: Healthy Net Cash position leaves us with a significant financial flexibility in billion euros +1.7 -1.6 +2.4 +0.0 -0.3 +0.4 23.5 20.9 Free cash flow industrial business Q3 2021: € 2,249 million Net industrial Earnings and Working Depreciation and Additions to Inves
Slide 7: Development of gross industrial liquidity
Daimler YTD Q2 2021 development of gross industrial liquidity Financial Services in billion euros Industrial Business 9.1 -6.3 10.3 -14.6 -7.2 6.6 6.8 -1.0 31.6 29.4 -1.7 4.6 3.6 25.8 27.0 Gross Dividend FCF FCF Other ABS New Bond New FX & Gross Liquidity Payment IB DMO Debt Maturities ABS Maturitie
Slide 8: Q3 2021 financial flexibility over a 12-month period
Daimler Q3 2021 financial flexibility over a 12-month period in billion euros 65.8 ABS potential Other incl. Net industrial liquidity at €23.5 billion improved significantly 47.4 Fin. Lease Commercial paper Gross industrial liquidity at €27.0 billion Credit facility Bank loans Financial flexibility
Slide 9: Agenda
AGENDA I. DAIMLER AG REVIEW Q3 2021 II. DIVISIONAL REVIEW Q3 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Fixed Income Presentation | Q3 2021 9
Slide 10: Mercedes-Benz Cars: Highlights
Mercedes-Benz Cars: Highlights ▸ Strong demand for Mercedes-Benz products in all markets. Especially electric and high-end vehicles with high growth rates ▸ Sales significantly restricted by ongoing semiconductor shortage ▸ Favorable mix and net pricing offset semi-driven supply constraints and raw
Slide 11: Mercedes-Benz Cars & Vans financials
Mercedes-Benz Cars & Vans financials: Revenues remained at about last year’s level Sales Revenue EBIT adj. CFBIT adj. in thousand units in billion euros in billion euros in billion euros 673 4.8 25.8 25.6 4.1 2.4 471 2.2 -30% -1% -10% -14% Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2
Slide 12: Mercedes-Benz Cars & Vans EBIT FY & RoS
Mercedes-Benz Cars & Vans EBIT FY & RoS: Exceptionally favorable structure effects and improved net pricing Favourable product mix Improved net pricing in million euros Significantly lower unit sales due to worldwide shortage of semiconductor components Disruptions in production network and supply c
Slide 13: Mercedes-Benz Cars & Vans Reconciliation from EBIT to CFBIT
Mercedes-Benz Cars & Vans Reconciliation from EBIT to CFBIT: Driven by low vehicle inventories and a BBAC dividend in million euros +475 4,128 +487 3,653 +1,170 -228 -1,360 +1,580 2,004 t/o t/o • Legal Proceedings +215 • New vehicle stock +2,093 t/o • BBAC Dividend +732 • Restructuring +40 • Unfinis
Slide 14: Daimler Trucks & Buses: Highlights
Daimler Trucks & Buses: Highlights ▸ Q3 sales significantly impacted by semi-conductor shortages with shortfall mostly felt in heavy duty markets North America and Europe; significant amount of trucks awaiting completion ▸ Order Book for 2022 opened for North America with record incoming orders duri
Slide 15: Daimler Trucks & Buses Financials
Daimler Trucks & Buses Financials: Strong sales and unfavorable regional and product mix Sales Revenue EBIT adj. CFBIT adj. in thousand units in billion euros in million euros in million euros 9.2 8.9 1,142 106.4 99.3 603 489 +7% -4% -19% -1,670 -527 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q
Slide 16: Daimler Trucks & Buses EBIT & RoS
Daimler Trucks & Buses EBIT & RoS: Industrial performance burdened mainly by higher raw material prices Net pricing Positive contributions from used vehicle business and from aftermarket Positive one-time effects from BFDA Impairment reversal Unfavorable regional heavy duty sales mix due to supply c
Slide 17: Daimler Trucks & Buses reconciliation from EBIT to CFBIT
Daimler Trucks & Buses reconciliation from EBIT to CFBIT: semiconductor shortages caused a temporary extraordinary increase of unfinished goods in million euros 482 -1,128 -576 -527 • Restructuring measures +9 • M&A transactions +40 +276 -10 +49 -45 -151 t/o • Unfinished goods -928 EBIT Change in Ne
Slide 18: Daimler Mobility: Highlights
Daimler Mobility: Highlights ▸ Reduced portfolio due to semi-conductor shortage and lower dealer stock ▸ Support for EV-sales at level comparable to ICEs ▸ Interest result benefitting from lower refinancing cost ▸ No new credit risk provisions required in Q3 due to high portfolio quality ▸ Improved
Slide 19: Daimler Mobility Financials
Daimler Mobility Financials: EBIT adj. benefitting especially from favorable refinancing costs New Contract EBIT adj. business volume in million euros in billion euros in billion euros 943 18.7 150.6 148.1 14.6 601 -22% -2% +57% Q3 2020 Q3 2021 12/31/2020 9/30/2021 Q3 2020 Q3 2021 For more details o
Slide 20: Daimler Mobility EBIT & RoE
Daimler Mobility EBIT & RoE: Main driver were lower refinancing costs which improved the interest margin Margin benefiting from lower refinancing costs Improved operative business performance at Mobility Services and Fleet Management Negative impact in Q3 2020 due to impairment of software in contex
Slide 21: Agenda
AGENDA I. DAIMLER AG REVIEW Q3 2021 II. DIVISIONAL REVIEW Q3 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Daimler AG Fixed Income Presentation | Q3 2021 21
Slide 22: Market Guidance 2021
Market Guidance 2021 Assumption The economic conditions for worldwide demand are likely to remain favourable during the rest of the year. One must assume, however, that strained supply chains and bottlenecks for key components will continue to have a considerable impact on worldwide vehicle producti
Slide 23: Divisional Guidance 2021
Divisional Guidance 2021 Assumption The economic conditions for worldwide demand are likely to remain favourable during the rest of the year. One must assume, however, that strained supply chains and bottlenecks for key components will continue to have a considerable impact on worldwide vehicle prod
Slide 24: Daimler Group Guidance 2021
Daimler Group Guidance 2021 Assumption The economic conditions for worldwide demand are likely to remain favourable during the rest of the year. One must assume, however, that strained supply chains and bottlenecks for key components will continue to have a considerable impact on worldwide vehicle p
Slide 25: Agenda
AGENDA I. DAIMLER AG REVIEW Q3 2021 II. DIVISIONAL REVIEW Q3 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Daimler AG Fixed Income Presentation | Q3 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: Project Focus: Daimler Truck AG majority spin-off key messages
Daimler Project TruckFixed Focus: AG majority Income spin-off: Intended transaction structure and key messages details Strong balance sheet: 23.5 bn Euros net industrial liquidity end of Q3 2021 Solid financial position for both entities at Day 1: net industrial liquidity exceeding pensions deficit
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: 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: Listing of Daimler Truck planned 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 targeted February 3, 2021 May 20, 2021 October 1, November 11, End of 2021 2021 2021 Capital Market Update Capital Market Day Da
Slide 33: Daimler Truck: Our mission as an independent company
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 Q3 2021 II. DIVISIONAL REVIEW Q3 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Fixed Income Presentation | Q3 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 150 150 148 140 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 49 38 41 Vans Acquisitions (in bn €) 2012 2013 2014 2015 2016 2017 2018 2019 2020
Slide 40: Daimler Mobility business model: credit management and 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 0.89% 0.83% Net credit losses on multi-year low level. Yet risks remain 0.68% 0.61% to the upside as a result of expiring governmental and
Slide 41: Well balanced bond maturity profile
Well balanced bond maturity profile in billions of € as of 30 September 2021 Issued in 2021 Maturities 15.3 0.6 12.1 0.8 10.4 3.1 14.7 6.2 0.0 5.1 11.3 3.6 0.9 3.5 3.5 7.4 3.1 6.1 2.4 0.4 2.0 4.3 1.3 3.1 1.0 0.5 1.0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2033 2034 2037 Duration of Bo
Slide 42: Financing liabilities show a diversified funding mix
Financing liabilities show a diversified funding mix with increasing rating-independent share Fin. Lease (IFRS 16) Acc. Deposits in billions of € Other (ex Fin. Lease) Bank Loans Com. Paper Bonds ABS 161.8 3% 145.0 0% 145.8 3% 9% 1% 1% 1% 136.5 3% 127.4 0% 9% 2% 2% 8% 11% 0% 1% 2% 1% 9% 8% 14% 1% 10
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% 3% 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: 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 Positive P-2 Current Ratings: Fitch: A- Stable F1 DBRS: A (low) Stable R-1 (low) Scope: A Stable S-1 Daimler AG Fixed Income Presentation | Q3 2021 45
Slide 46: Pension provision and funded ratio
In low interest rate environment high contributions stabilized funded ratio 14 11.5 11.0 12 9.8 10 8.6 8.4 7.4 7.8 7.6 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 Q3 2021 II. DIVISIONAL REVIEW Q3 2021 III. OUTLOOK 2021 IV. PROJECT FOCUS V. FUNDING VI. SUSTAINABILITY Daimler AG Fixed Income Presentation | Q3 2021 47
Slide 48: Sustainability is an integral part of our divisional business strategies
Sustainability 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 | Q3 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 | Q3 2021 50
Slide 51: Our electric product rollout is running at full speed
Mercedes-Benz Cars Our electric product rollout is running at full speed EQS order intake is strong even though sales only started in August In the first three quarters of the year, sales of hybrid and EQB EQA electric vehicles surged to a record 184,369 units (+143%) 2021 61,652 plug-in hybrids and
Slide 52: At the end of the decade, our focus will be on BEV only
Mercedes-Benz Cars At the end of the decade, our focus of 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: Expanding activities in battery cells and systems
Mercedes-Benz Cars: Together with our partners, we will expand our activities in battery cells and systems Our targets: Needed battery volume for all car lines Capacity of more than 200 Gigawatt hours 200 Gwh 8 new cell factories around the world: one in the U.S., four in Europe with our partner
Slide 54: By joining ACC, we build a European battery champion
Mercedes-Benz Cars By joining ACC, we build a European battery champion We take a one third stake in Automotive Cells Company (ACC). Our goal: Joint development and production of cells and modules in Europe. ACC will reach a capacity of at least 120 Gigawatt hours in Europe by the end of the decade.
Slide 55: We are ready to accelerate EV production
Mercedes-Benz Cars We are 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
Slide 56: Closing the loop: from value chain to value cycle
Mercedes-Benz Cars 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 grid
Slide 57: Re-shape Re-skill Re-charge
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 qua
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: Infrastructure requires a dual zero-emission strategy
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 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 FCE
Slide 62: On the road to CO2-neutral production
On the road to CO2-neutral production 2039 By 2039: CO2-neutral 2030 production at all of our plants and in all of our By 2030: At Mercedes-Benz business units worldwide. 2025 Cars & Vans we are striving to 2022 By 2025: CO2-neutral reduce the CO2 emissions at our plants (Scope 1 and 2) by 50 Starti
Slide 63: Clear objectives, comprehensive disclosure and international frameworks
Clear objectives, comprehensive disclosure and guided by international frameworks We embedded the Sustainable We use comprehensive reporting Our strategy is guided by Development Goals in our strategy frameworks to provide transparent and international frameworks, our concentrating on the areas wher
Slide 64: 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 65: Second Opinion on green bonds
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 66: Daimler's ESG Ratings
Daimler’s ESG Ratings (as of September 2021) Upgraded Leading position Ranked with the from in the highest rating sub-industry peer group BBB to A rank 3 out of 61 in the auto sector (last update Daimler score 09/2021) (last update Daimler score 08/2021) Prime Status (C+) Daimler AG Fixed Income Pre
Slide 67: Daimler Q3 2021 Disclaimer
Daimler Q3 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