Daimler AG (DDAIF) Q2 2020 Results Earnings Conference Call July 23, 2020 2:00 AM ET Company Participants Steffen Hoffmann - Head, IR Ola Källenius - Chairman, CEO & Head, Mercedes-Benz Cars Division Martin Daum - Member, Board of Management & Chairman, Board of Management, Daimler Truck AG Harald Wilhelm - Member, Board of Management, Finance & Controlling, Daimler Mobility Conference Call Participants Tim Rokossa - Deutsche Bank José Asumendi - JPMorgan Operator Welcome to the global conference call of Da ...

DAIMLER AG DISCLOSURE Q1 2020 Capital Market Presentation Q1 2020 CAPITAL MARKET PRESENTATION April 29, 2020 DAIMLER Q1 2020 KEY TOPICS Q1 in line with our expectations Significant decline in all markets caused by COVID-19 pandemic Strict actions taken to safeguard employees Immediate measures taken to preserve cash and safeguard financial flexibility Shutdown of production in almost all plants with short-time work in Germany Strategic projects were continued Decision-making paths shortened, organizational ...

Financial Data and Key Metrics Changes - The total unit sales significantly decreased to 644,000 units in Q1 2020, leading to a reduction in EBIT to €719 million [19][20] - Free cash flow of the industrial business was reported at minus €2.3 billion, with an adjusted free cash flow of minus €1.9 billion [19][20] - Net industrial liquidity decreased to €9.3 billion from €11 billion at the beginning of the year [20][22] Business Line Data and Key Metrics Changes - The automotive division experienced a significant decline in sales volume, heavily impacting EBIT [26][31] - The trucks division saw a more proportional relationship between incoming orders, unit sales, and revenue drop, resulting in a profit of around €250 million despite the downturn [31] - Daimler Mobility's new business demand decreased by 7% to €16.2 billion, with contract volume down 2% compared to 2019 [33] Market Data and Key Metrics Changes - The pandemic caused a significant decline in all markets, with expectations of a substantial decrease in global passenger vehicle demand [38][40] - The Chinese market is showing signs of recovery, with wholesale sales improving in March and expected retail recovery in April [25][66] - The North American truck market is expected to see a significant decline, alongside unfavorable developments in the EU30, Brazil, and Japan [40] Company Strategy and Development Direction - The company is focused on cash preservation and cost management while continuing to invest in future technologies such as electrification and digitization [13][14] - A joint venture with Volvo Group was announced for the development and production of fuel cells for heavy-duty trucks [14] - The company aims to maintain a robust liquidity position to weather the ongoing crisis and prepare for future opportunities [22][41] Management Comments on Operating Environment and Future Outlook - Management acknowledged the unprecedented challenges posed by COVID-19 but expressed confidence in the company's proactive measures and financial flexibility [9][13] - The outlook for Q2 is challenging, with expectations of negative EBIT and free cash flow due to the full impact of lockdowns [40][41] - Management emphasized the importance of being prepared for a market rebound and maintaining focus on strategic projects [43] Other Important Information - The company has implemented extensive production stoppages and cost-cutting measures to manage cash flow during the pandemic [10][17] - A preliminary nonbinding agreement was signed with Volvo Group for a joint venture in fuel cell technology [14] Q&A Session Summary Question: Expectations for Q2 EBIT and free cash flow - Management indicated that Q2 is expected to be negative for both EBIT and free cash flow, with April likely being the worst month [48] Question: Ramp-up plans post-crisis - The company is prepared to ramp up production in response to market demand, with flexibility in operations to adjust shifts as needed [50][51] Question: Introduction of 48-volt technology - The company is on track with CO2 compliance in Europe and continues to execute its electrification plan despite market challenges [56] Question: Impact of COVID-19 on residual value risk - Adjustments for residual value risks are monitored, with some minor adjustments recorded in Q1 [61] Question: Demand recovery in China - Retail sales in China are expected to recover in line with wholesale sales, with cautious optimism for the future [66] Question: Cash flow statement clarifications - The cash flow statement reflects cash-outs related to provisions and adjustments for the X-Class discontinuation [68] Question: Product launch timelines - Key product launches, including the S-Class, remain on track despite the pandemic [70]