daimler financial service at a glance. fiscal year 2011

Daimler Financial Services at a Glance.Fiscal Year 2011.

Fiscal Year 2011 | 3

Dear readers,

As far as Daimler Financial Services was concerned, 2011 was a very successful year. In particular, we achieved three new records. Not only did new business, contract volume, and EBIT reach all-time highs; we also put around 40 percent of all the vehicles produced by Daimler on the road worldwide. Around the globe, we concluded a financing or leasing contract for a car, van, bus, or truck from Daimler every 30 seconds on average. We have also achieved a new all-time high for the number of motor insurance policies we broker.

From a regional viewpoint, our business continued to develop very dynamically, especially in Asia. Our financial service operations immediately got off to a resounding start in India, which will be an important automotive market in the future. In addition, we also achieved record contract volumes in Europe and the Americas. And all of this business was highly profitable. Our return on equity reached 25.5 percent, which is well above the average figure we are aiming for.

One of the key reasons for all these successes was the further improvement in customer and dealer satisfaction — a feat we accomplished on a broad scale. We received many awards for the quality of our service all over the world. And this has given us an extra incentive to remain a reliable partner for Daimler’s cus-tomers and dealers. Our long-term goal is clear: We aim to become the world’s best captive financial services provider. And we want to — and will — come closer to achieving this goal in 2012.

I hope this publication will provide you with some interesting insights into our business operations.

Sincerely,

Klaus EntenmannChairman of the Board of Management of Daimler Financial Services AG

Contents

3 Foreword

4 Daimler at a glance

6 Daimler Financial Services leadership team

8 Key figures

10 Global presence

12 Products

14 Guiding principles

15 Strategy

16 Social responsibility

18 Milestones

20 Contacts

22 Daimler brand portfolio

Foreword

4 | Daimler Financial Services at a Glance Fiscal Year 2011 | 5

Daimler at a glanceA global enterprise

Daimler AG is one of the world’s most successful automakers. With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses, and Daimler Financial Services, the company is one of the world’s largest suppliers of premium vehicles and the largest globally operating commercial vehicle manufacturer. Daimler Financial Services offers financing, leasing, fleet management, insurance, and innovative mobility services.

The company’s founders, Gottlieb Daimler and Carl Benz, made history with their invention of the automobile in 1886. As a pioneer in automotive engineering, Daimler continues to shape the future of mobility. For example, the company is focusing on innovative and green technologies as well as on safe, high-quality vehicles that fascinate and thrill customers. For many years now, Daimler has been consistently investing in the development of alternative drive systems in order to make emission-free driving possible over the long term. In this context, Daimler offers not only hybrid vehicles but also the widest range of locally emission-free battery and fuel cell electric vehicles. After all, Daimler regards acting responsibly toward society and the environment as both a duty and a challenge.

Daimler sells vehicles and services in almost every country and has production facilities on five continents. Alongside Mercedes-Benz, the world’s most valuable automobile brand, the current portfolio includes smart, Maybach, Freightliner, Western Star, BharatBenz, Fuso, Setra, Orion, and Thomas Built Buses. The company is listed on the stock exchanges in Frankfurt and Stuttgart. In 2011 the Group sold 2.1 million vehicles and employed more than 271,000 people. Its revenues totaled €106.5 billion and its EBIT was €8.8 billion.

Daimler Group

(in millions of euros) 2011 2010 11/10

% change

Revenue 106,540 97,761 +91

Western Europe 39,387 38,478 +2

thereof Germany 19,753 19,281 +2

NAFTA 26,026 23,582 +10

thereof United States 22,222 20,216 +10

Asia 22,643 19,659 +15

thereof China 11,093 9,094 +22

Other markets 18,484 16,042 +15

Employees (December 31) 271,370 260,100 +4

Investment in property, plant and equipment 4,158 3,653 +14

Research and development expenditure 5,634 4,849 +16

thereof capitalized 1,460 1,373 +6

Cash provided by (used for) operating activities -696 8,544 ·

(including discontinued operations)

EBIT 8,755 7,274 +20

Value added 3,726 2,773 +34

(including discontinued operations)

Net profit (loss) 6,029 4,674 +29

Earnings (loss) per share (in €) 5.32 4.28 +24

1 Adjusted for the effects of currency translation and changes in the consolidated Group,

increase in revenue of 10%.

EBIT by division

(in millions of euros)

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses

Daimler Financial Services

2011 2010 11/10

% change

5,192 4,656 +12

1,876 1,332 +41

835 451 +85

162 215 -25

1,312 831 +58


Daimler Financial ServicesOur leadership team

Bodo Uebber

Chairman of the Supervisory Board of Daimler Financial Services AG,Member of the Board of Managementof Daimler AG, with responsibility for Finance andControlling/Financial Services

Klaus Entenmann

Chairman of the Board of Management of Daimler Financial Services AG

Franz Reiner

Member of the Board of Management, responsible for the region Europe, Chairman of Mercedes-Benz Bank AG

David Olsen

Member of the Board of Management and Chief Financial Officer, responsible for Finance, Controlling, Risk Management and Global Services

Dr. Dieter Buhl

Member of the Board of Management, responsible for Human Resources, Sales & Financial Services

Richard Howard

Member of the Board of Management,responsible for the region Africa & Asia-Pacific

Peter Zieringer

Member of the Board of Management, responsible for the region Americas, President and CEO of Mercedes-Benz Financial Services USA LLC


Contract volume in 2011 by vehicle segment (in units)

All segments 2,612,000

Mercedes-Benz Cars 1,740,000

Daimler Financial ServicesKey figures


(in millions of euros) 2011 2010 11/10

% change

EBIT

Revenues

New business

Total portfolio

Europe

Americas

Africa & Asia/Pacific

Portfolio (in units)

Employees (Dec. 31)

Contract volume in 2011 by market (in millions of euros)

United States 21,601

Germany 17,000

Other markets 12,122

Brazil 3,990

UK 3,919

Canada 3,014

Japan 2,736

Australia 2,116

France 1,966

Italy 1,648

South Africa 1,618

Daimler Financial Services contract volume (in millions of euros)

Other brands 226,000

Daimler Trucks 311,000

Mercedes-Benz Vans 291,000

Daimler Buses 44,000

US-GAAP IFRS * Portfolio on balance (otherwise portfolio serviced)

20092005 2006 20082007 2010

54,414 56,408

63,35358,35059,143*

63,725

1,312 831 +58

12,080 12,788 -6

33,521 29,267 +15

71,730 63,725 +13

31,173 29,159 +7

30,605 25,910 +18

9,936 8,656 +15

2,612,000 2,488,000 +5

7,065 6,742 +5

2011

71,730


Approximately 7,000 employeesGlobal presence in nearly 40 countries

China

DenmarkSwedenHungaryPolandCzech RepublicSlovakiaSloveniaCroatiaGreeceTurkeyRomania

GermanyUKFranceItalyNetherlandsBelgiumLuxembourgSwitzerlandAustriaSpainPortugal

Russia

Singapore

Canada

United States

Mexico

South Africa

South KoreaJapan

Taiwan

Thailand

New Zealand

Australia

Brazil

Argentina

Europe 4,325

Americas 1,588

Africa & Asia-Pacific 1,152

Employees (as of Dec. 31, 2011)

India Hong Kong


Daimler Financial Services offers a comprehensive range of automobile- related financial services. The products extend from leasing, retail financing, and dealer financing to commercial fleet management, insurance solutions, banking services, and innovative mobility services. All of these offers help customers make their automotive dreams come true, support the Daimler Group’s vehicle sales, and promote customer and dealer loyalty. Studies show that customers who lease or finance their vehicles remain loyal to their brands much longer than those who purchase their cars outright. They also more frequently invest in new vehicles and high-end equipment packages.

FinancingIn many countries, Daimler Financial Services has received banking licenses that allow the company to issue loans. Customers who opt for this form of financing usually plan to obtain ownership of the vehicle by paying fixed monthly installments over the term of the financing contract. Afterward the car belongs to them. Customers not only select the contract’s duration and the amount of the down payment; they can also make balloon payments in many markets. As in a leasing contract, they can thus take advantage of low monthly rates. In the case of three-way financing contracts, customers decide at the end of the financing period whether they want to return the vehicle, refinance the remainder of the loan, or pay it off all at once.

LeasingDaimler Financial Services remains the owner of the vehicle in all leasing contracts. Customers merely pay to use the vehicle and return it after the contract expires. Service-leasing packages combine the leasing contract with various service components such as maintenance, repairs, and tire services.

InsuranceOur range of insurance services includes motor insurance, GAP insurance, and payment protection insurance. In addition to insuring Daimler production locations and transport and product liability risks worldwide, the company’s Insurance Services unit manages the company and private pension plans of the Group’s employees in Germany.

Outstanding financial services Our products

Fleet managementIn many countries, Daimler Financial Services is one of the leading providers of fleet management services for cars and commercial vehicles. Its Daimler Fleet Management and Mercedes-Benz CharterWay subsidiaries in Europe offer comprehensive fleet management packages for cars and commercial vehicles, respectively. If the customer desires, such services can be expanded to include the complete management of entire fleets.

Deposits and credit cardsIn selected markets and in close cooperation with the Group’s automotive brands, Daimler Financial Services provides credit cards. In addition, Mercedes-Benz Bank offers call money accounts, savings plans, and fixed- interest term deposits.

Innovative mobility servicesCustomers’ mobility demands are changing — and so are we. The best example of this is car2go — an urban mobility concept provided by Daimler Financial Services in which smart brand vehicles can be rented at favorable rates by the minute anywhere and at any time. In short, customers are not dependent on fixed rental stations and can rent vehicles on the spur of the moment. The vehicles can be located and booked via cell phone or the Internet. The fee is processed by a telematics unit.


We have a clear strategic objective: to become the world’s leading providerof automobile-related financial services. We will therefore continue to pursue a profitable growth strategy in the years ahead. The global demand for automobiles will continue to rise in both the medium and the long terms. Forecasters predict that annual sales of cars and commercial vehicles will be much higher at the end of the decade than they are now. To exploit this trend, Daimler Financial Services’ has developed a growth strategy that is based on several key developments. First, we will support Daimler’s current product campaigns with customized financing and leasing offers that will enable us to reach new, younger groups of customers, particularly in the car segment. Second, we see considerable growth potential for the financial services business in the BRIC countries. In fact, these countries’ share of our new business is expected to increase from ten percent today to 25 percent by mid-decade. In India, for example, we will be launching our financial services business for the new truck brand BharatBenz this year, and we will also expand our leasing business in China. The third step involves enhancing our business system through innovative mobility services such as car2go. Key success factors in this regard include the use of cutting-edge information technology and the ability to network cars with their surroundings.

Keeping our eyes on the goalOur strategy

Vision, Mission, ValuesOur guiding principles

Our vision is simple but at the same time ambitious: Working closely with our automotive colleagues, we want to be the first-choice provider of financial and mobility services for our customers and dealers.

We want to achieve this goal by pursuing our mission — in other words, by · supporting Daimler sales and contributing to the Group’s financial success,· creating added value for our customers, dealers, and vehicle brands,· offering our employees attractive possibilities for professional development and fulfilling our overall social responsibility.

At the same time, we are committed — without any ifs or buts — to the values of Passion, Respect, Integrity, and Discipline. These values are shared by Daimler employees all over the world — no matter whether they work in the car, commercial vehicle, or financial services business. Integrity-related issues receive special attention at our company. For us, “doing decent business” and “doing business decently” are two sides of the same coin. What’s more, our understanding of integrity is expressly not limited to merely adhering to formal laws and regulations. The focus is instead on maintaining an ethical attitude, or “moral compass,” which guides us — even in complex business situations.


Daimler Financial Services is involved in humanitarian, social, and cultural projects all over the world. This commitment to social concerns is part of our corporate culture. It is not only embedded in individual units and departments but is also reflected in the dedication of all of our employees.

Day of Caring During a Day of Caring, our employees get a day off work in order to support selected charitable organizations and projects in their communities. Examples include renovating a youth center in Germany, planting rice fields in Thailand, and cleaning beaches in New Zealand.

Moved by Ideas Many of our employees volunteer to work in neighborhood projects during their leisure time. Our Moved by Ideas initiative supports these efforts. Whenever three or more employees work in clubs, charitable organizations or other non-profit institutions, Daimler Financial Services pays for the project’s materials.

Plus/Minus Our Plus/Minus seminars aim to increase young people’s financial literacy. We are ideally equipped to provide know-how in this area. After all, successful money management is one of our core areas of expertise. The seminars help young people reconcile their (consumer) wishes and lifestyles with the financial resources they have available so that they do not fall deeply into debt.

Youth Entrepreneurship Program In South Africa, we have supported more than 1,000 up-and-coming business-people through our Youth Entrepreneurship Program. In this initiative, young men and women who have good business ideas are given basic training in company management. The participants with the best business ideas are provided with start-up capital and further advice.

Teens The Teens project of the C/O Berlin photography forum teaches young people about various types of visual media, ranging from photography to film. The participants, who are between 14 and 17 years old, work in teams, where they discover their creative potential and jointly develop ideas. The team members then implement these ideas themselves under the supervision of experienced educators and renowned experts.

Menschen für Menschen Since 2003, Mercedes-Benz Bank Deutschland has been assisting Karlheinz Böhm’s Menschen für Menschen (People for People) aid program for Ethiopia. In 200, the bank financed the construction of the Degem Higher Secondary School, the only secondary school in a region with more than 100,000 inhabitants. The latest project helps women in the Midda region by providing them with microloans to set up their own businesses and teaching them basic entrepreneurial skills.

SEED In India, we not only set up a new national subsidiary in 2011 but also launched a long-term empowerment initiative known as “SEED.” As part of this initiative, we are cooperating with Habitat for Humanity Deutschland, one of our partners, to improve the prospects of disadvantaged families in all walks of life. The assistance we offer ranges from constructing shelters and providing education to giving advice on healthcare. The DFS company in India also organized its first Day of Caring within the framework of the SEED project.

Corporate social responsibilityA good corporate citizen


A review of 2011 Milestones

August Coinciding with the launch of the new Actros, Mercedes-Benz Bank presents its first use-dependent insurance for trucks. The insurance’s premium is based on the challenges the truck will face and the driver’s driving style. In the U.S., Mercedes-Benz Financial Services teams up with Mercedes-Benz USA and American Express to launch a co-branded credit card program.

September For the third time in a row, Mercedes-Benz Financial Services Australia achieves the highest dealer satisfaction ratings in an AC Nielsen study. At no other company do dealers “down under” feel themselves in such good hands.

October The new Mercedes-Benz Bank service center commences operations in Berlin. From its offices in downtown Berlin, the center processes and man-ages the leasing, financing, and insurance business of commercial customers. Up to 700 jobs are to be created at the new service center.

November Daimler Fleet Management offers a new environmental reporting service. The service enables fleet customers to determine changes in individual vehicles’ fuel consumption so that they can identify areas with potential for major savings. Mercedes-Benz Auto Finance Company China is named China’s best automobile finance company at the China Auto Golden Engine Awards ceremony. In Germany, Mercedes-Benz Bank once again takes first place in the Autohaus trade magazine’s insurance study.

December In the U.S., Mercedes-Benz Financial Services achieves an unprecedented result: For the first time in an individual month, business surpasses the $1.1 billion mark. This result represents an increase of over 30 percent compared with the previous year.

January Daimler Financial Services begins the year in a strong position. The company finances or leases almost 2.5 million vehicles worldwide. At the beginning of the year its contract volume is about €64 billion.

February To commemorate the 125th anniversary of the invention of the auto-mobile, Mercedes-Benz Bank introduces a special offer that enables buyers to finance a new A-, B-, C-, or E-Class vehicle or a Viano van at just 1.25 percent interest.

March Mercedes-Benz Financial Services USA announces it has achieved a new mobile payment milestone: Customers have used smartphones to make around $20 million in loan and leasing payments since an app was introduced for this purpose.

April Daimler Financial Services holds its second Day of Caring in Croatia. With the help of their families, employees from the Croatian national subsidiary provide assistance to an SOS Children’s Village in Lekenik.

May Mercedes-Benz Bank expands its range of insurance products by offering traffic-related legal expenses insurance for the first time. The insurance covers up to €1.5 million of the legal costs per traffic-related damage claim.

June The Daimler Financial Services Board of Management is restructured. Franz Reiner takes on responsibility for the Europe region and also becomes Chairman of Mercedes-Benz Bank. Peter Zieringer is appointed to the Board of Management, where he is responsible for the Americas region.

July The new national subsidiary Daimler Financial Services India Private Limited begins operations at its headquarters in Chennai. In Germany, Autohaus Bankenmonitor names Mercedes-Benz Bank the best financial services provider in the German automotive trade for the third time in a row. In the U.S., Mercedes-Benz Financial finishes first in all of the categories of the J.D. Power dealer satisfaction study. Daimler Truck Financial begins offering retail and dealer credit for the Fuso brand in the U.S.


Martin GeersDirector Corporate & Marketing CommunicationsFinancial ServicesPhone +49 30 25 54-11 00Fax +49 30 25 54-11 [email protected]

Harald BertschHead of Media Relations Financial Services andCommunications Mercedes-Benz BankPhone +49 711 25 74-40 10Fax +49 711 25 74-9 40 [email protected]

Oliver WihofszkiMedia Relations Mercedes-Benz Bank and EuropePhone +49 711 25 74-40 39Fax +49 711 25 74-9 40 [email protected]

Andreas SpannbauerMedia Relations Daimler Financial Services Phone +49 711 25 74 40 78Fax +49 711 17 79 01 94 [email protected]

James RyanHead of Communications andCorporate Marketing AmericasPhone +1 248 991-6600Fax +1 248 [email protected]

Jack FerryMedia Relations, Mercedes-Benz Financial Services andDaimler Truck Financial AmericasPhone +1 248 991-6610Fax +1 248 [email protected]

Michael BraunMedia Relations Daimler Financial Services Africa and Asia-PacificPhone +65 6849 5632Fax +65 6849 8485E-Mail: [email protected]

Feel free to contact usYour media contacts

Daimler Brand Portfolio

Mercedes-Benz Cars

Daimler Trucks

Mercedes-Benz Vans

Daimler Buses


Daimler Financial Services AG, COMStuttgart, Germanywww.daimler-financialservices.com

daimler financial service at a glance. fiscal year 2011

Automotive

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daimler brand portfolioone

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