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Daimler AG Q3 2009 Earnings Call Transcript
Author: 123jump.com Staff
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Last Update: 7:19 AM ET November 02 2009

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Daimler AG third quarter revenues fell 21% to €19.3 billion and net profit fell 79.5% to €41 million or €0.04 a share.


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And could we have the amount?

Bodo Uebber

The amount? Close to 2,000 units.

Thierry Huon - Exane

Okay. Thank you.

Michael Muhlbaye

We''ll take the next question from Jochen Gehrke.

Jochen Gehrke - Analyst

Yes, good afternoon. I have two questions if I may. First question relates to the group and your cost cutting and second question would relate to trucks. Firstly, Mr. Uebber, when I look at your profit work and your gross and net cost impact similar to what we''ve noted in the quarter before, there seems to be a very big gap between your gross cost cutting achievements in the third quarter and your net contribution which on the sequential basis is actually down a little bit more than 200 million Euros. Could you explain me why that is and what explains this is huge gap? I understand the discounting of provisions is one thing but your gross impact that you''ve disclosed is 3.5 billion by now whereas your net cost savings impact is more like 750. What is really explaining the rest of that difference?

And secondly on trucks, do you expect a major decline in the European markets? Otherwise, I have difficulties to follow your guidance on a clean operating profit because obviously this quarter like some others you have book-to-bill ratios above one. We should expect that fourth quarter on a global scale is seeing more volumes. Is Europe seeing price pressure or is the volume decline on a sequential basis more material than what I think? Thank you.

Bodo Uebber

Maybe first to your second question, first of all the order intakes you can see are not impacting the fourth quarter. They are more impacting the year 2010, than the year 2009. So, what we can see right now is clearly in our order intake of course in our production plan of course for the fourth quarter that we will see a decline in the European sales and, of course, due to our different profitability we have in our different businesses that has a higher impact on the negatively -- sales contribution than the positive impact we get through sales contribution from the Asian business. And that leads to and should lead to and will lead to a profit decrease so to say in the Truck business. So that''s to your second question.

Your first question, the 3.5 billion, first of all, let me say if we would not have the all the actions we have taken and we have commented on that, whether it''s short-timing, salary cuts, postponing on investments which are not product related, further material cost measures, fixed cost measures, investment, IT programs, and so on and so forth, but also measures on the revenue side, on the top-line. If we would not have done it our results for year-to-date would have been 3.5 billion lower than we can see right now which means what I want to say with that that there are concrete measures behind it which we are tracking -- of course now why can''t you see it exactly in the profit [walks]? There are some other offsetting subjects which you have already mentioned. These numbers from the interest rates level and the German protection association, pension association gets up to a number which is more than 500 million. So, these numbers are not low on the one hand.

Secondly, some of the measures you will see also in the basket of revenue and mix which are in the sales contribution area. For example, when you change variable costs these impacts are not on the cost side but on the sales contribution side. So, for example, when you book to and it comes to short-timing, for example, on the worker side you have an impact there on the sales contribution side. And of course, we should not leave out of mind that we have residual costs which are at the at the end of the day also negatively impacting.

And last but not least some headwinds which we have -- is not in the counter measures. One example is a lower one, I do think one of you will ask me what are the impacts on the supplier side when you ask this question I will tell you the number which is not included in the counter measures for example I. So, all in all, it is 3.5 billion right now and we aim to over achieve our 4 billion target which we can confirm that we will over achieve this target of how much of course we will disclose to you in February with our actual.

Jochen Gehrke - Analyst

So, sorry just to reconcile this, I should not compare the 400 million to the 1.6 billion. I should rather look at the sequential step down in your volume structure and net pricing which is minus 160.

Bodo Uebber

Some of that part is also included there, yes.

Jochen Gehrke - Analyst
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