Annual Report 2019 Key Figures Daimler Group 2019 2018 19/18 € amounts in millions % change Revenue 172,745 167,362 +3 1 Investment in property, plant and equipment 7,199 7,534 -4 Research and development expenditure 9,662 9,107 +6 Free cash flow of the industrial business 1,368 2,898 -53 EBIT 4,329 11,132 - 61 Net profit 2,709 7,582 -64 Earnings per share (in €) 2.22 6.78 -67 Dividend per share (in €) 0.90 3.25 -72 Employees (December 31) 298,655 298,683 -0 1 Adjusted for the effects of currency translation, revenue increased by 2%. Cover photo VISION EQS provides a preview of future large electric luxury sedans. With this vehicle, Mercedes-Benz is making a clear statement for the continued appeal of high-quality vehicles and self-determined driving. We are convinced that perfect craftsmanship, emotive design, luxurious materials and individual driving plea- sure will remain desirable in the future. Because the idea of luxury – today and in the future – stands above all for personal freedom. With the VISION EQS technol- ogy carrier, Mercedes-Benz is focusing on a completely new, fully variable battery-electric drive platform. It is scalable in many respects and can be used across many models. Thanks to the modular system, wheel- base and track width as well as all other system com- ponents, especially the batteries, are variable and thus suitable for a broad range of vehicle concepts. Daimler’s Divisions > OK DAIMLER AG KEY MESSAGES Mercedes-Benz safeguarded No.1 position in luxury segment, sales recovery in second half of year accomplished Underlying performance in line with 2019 Capital Market Day outlook; material adjustments booked Net Industrial Liquidity: target of >10 bn. euros achieved Strategy set for carbon-neutral mobility & transport Measures initiated to reduce cost and increase cash; focus on Free Cash Flow and capital allocation 2020 outlook confirmed 2 MERCEDES-BENZ CARS HIGHLIGHTS 2019 Mercedes-Benz leading luxury car brand; first time ever No.1 in premium segment in China Ramping-up supply of high-demand vehicles; significantly reduced inventories in Q4 Committed to carbon-neutral mobility: “Ambition 2039” defined, all-new EQC introduced to the market, battery production ramp-up smart: all-electric; new business model for next- generation products - cooperation with Geely Cash generation and performance improvement: program in place, targets identified, measures initiated, plan established to cap funding Mercedes-Benz EQC 400 4MATIC: combined power consumption: 20.8 - 19.7 kWh/100 km; combined CO2 emissions: 0 g/km 5 MERCEDES-BENZ VANS HIGHLIGHTS 2019 Continued sales growth to new record level New V-Class introduced and all-new EQV presented; series production of eSprinter started; development of new electric product in small-van segment Industrial situation stabilized Efficiency measures initiated Streamlining product portfolio: End of production X-Class Financial performance impacted by material adjustments Mercedes-Benz EQV 300: combined power consumption: 27.0 kWh/100 km; 8 combined CO2 emissions: 0 g/km, provisional figures DAIMLER TRUCKS HIGHLIGHTS 2019 Daimler Trucks world’s leading truck manufacturer Strong performance in NAFTA despite softening market in Q4/2019 Launch of new Actros,“Truck of the year” EU market weakened faster than expected in Q4/2019; first effects from efficiency programs at MB Trucks EU Goal of carbon-neutral transport set; electric trucks of all classes are tested in customer use Start of development and testing of fully autonomous trucks on public roads in the U.S. 11 DAIMLER BUSES HIGHLIGHTS 2019 Daimler Buses continues to be industry benchmark in profitability Maintained leading position in our core markets Serving high demand for our electric city bus eCitaro Delivered on target margin; continued efficiency effort 14 DAIMLER MOBILITY HIGHLIGHTS 2019 Continued strong support of industrial business: Financing about half of new vehicle sales Prudent risk management Maintained attractive returns despite higher equity demands due to regulatory requirements Start of YOUR NOW joint ventures and prioritization of mobility services Driving efficiency and digitalization 17 DAIMLER 2019 ADJUSTMENTS IN GROUP EBIT in million euros 23 DAIMLER 2019 NET INDUSTRIAL LIQUIDITY in billion euros Free Cash Flow industrial business FY 2019: €1.4 billion +7.6 -10.6 +7.1 -2.1 16.3 -3.2 -0.6 -3.5 13.1 11.0 Net industrial Effects from Net industrial Earnings and Working Depreciation and Additions to Investments in Dividend Net industrial liquidity initial application liquidity other cash capital impact amortization/ property, plant, and disposals of payment liquidity 12/31/2018 of IFRS 16 1/1/2019 flow impact impairments equipment and shareholdings Daimler AG 12/31/2019 intangible assets 24 2. ELECTRIFICATION EXPANDING xEV PORTFOLIO Ramp-up of EQC production to meet high demand; smart from now on EV only; market launch EQV this summer; world premiere EQA later this year. More than 20 Plug-In hybrid variants by 2020; comprehensive roll-out of 48V technology Ramping-up battery production on track: 9 factories in 7 locations on 3 continents xEV share more than quadrupling in 2020 (2 to 9%); sales of 48V vehicles more than doubling 33 The Divisions and Brands 2019 2018 2017 19/18 € amounts in millions % change Mercedes-Benz Cars Revenue 93,877 93,103 94,3511 +1 EBIT 3,359 7,216 8,8431 -53 Return on sales (in %) 3.6 7.8 9.41 . Investment in property, plant and equipment 5,629 5,684 4,843 -1 Research and development expenditure 7,518 6,962 6,642 +8 thereof capitalized 2,904 2,269 2,388 +28 Unit sales 2,385,432 2,382,791 2,373,527 +0 Employees (December 31) 152,048 151,3162 142,666 +0 Daimler Trucks Revenue 40,235 38,273 35,7551 +5 EBIT 2,463 2,753 2,3831 -11 Return on sales (in %) 6.1 7.2 6.7 . Investment in property, plant and equipment 971 1,105 1,028 -12 Research and development expenditure 1,490 1,295 1,322 +15 thereof capitalized 53 40 45 +33 Unit sales 488,521 517,335 470,705 -6 Employees (December 31) 83,437 82,6762 79,483 +1 Mercedes-Benz Vans Revenue 14,801 13,626 13,1611 +9 EBIT -3,085 312 1,1471 . Return on sales (in %) -20.8 2.3 8.71 . Investment in property, plant and equipment 240 468 710 -49 Research and development expenditure 543 666 565 -18 thereof capitalized 96 176 310 -45 Unit sales 438,386 421,401 401,025 +4 Employees (December 31) 21,346 21,8102 25,255 -2 Daimler Buses Revenue 4,733 4,529 4,5241 +5 EBIT 283 265 2811 +7 Return on sales (in %) 6.0 5.9 6.21 . Investment in property, plant and equipment 134 144 94 -7 Research and development expenditure 203 199 194 +2 thereof capitalized 23 41 30 -44 Unit sales 32,612 30,888 28,676 +6 Employees (December 31) 17,960 17,7292 18,292 +1 Daimler Mobility Revenue 28,646 26,269 24,5301, 3 +9 EBIT 2,140 1,384 1,970 +55 Return on equity (in %) 15.3 11.1 17.7 . New business 74,377 71,927 70,721 +3 Contract volume 162,843 154,072 139,907 +6 Investment in property, plant and equipment 87 64 43 +36 Employees (December 31) 12,680 14,070 13,012 -10 1 The amounts have been adjusted due to first-time adoption of IFRS 15 and IFRS 9. Further information is provided in Note 1 of the Notes to the Consolidated Financial Statements. 2 Adjustment of the number of employees in 2018 due to changes in the Group‘s internal allocation of employees. 3 At the Daimler Financial Services segment, the Group’s internal revenue and cost of sales have been adjusted by the same amount. These adjustments have been fully eliminated in the reconciliation. B Management Report Daimler once again achieved high levels of unit sales and revenue in 2019 in a challenging environment. Our numerous new products and innovative services contributed to this. At the same time, however, earnings and the free cash flow decreased significantly. Within the framework of our sustainable corporate strategy, we are vigorously pushing forward with the transformation of our businesses for a CO2-neutral future. To achieve this, the application of substan- tial funds is required, reducing our earnings in the year under review and also in the future. Against this background, we have taken comprehensive measures to strengthen our financial position again. 60 B | COMBINED MANAGEMENT REPORT | CORPORATE PROFILE Corporate Profile Business model We have used the previous structure of five divisions in our report on financial year 2019, analogously to the reports for the Daimler can look back on a tradition covering more than 130 first three quarters of the year. The new reporting structure years – a tradition that goes back to Gottlieb Daimler and Carl with three divisions will be used as of the first quarter of 2020. Benz, the inventors of the automobile, and features pioneering achievements in automotive engineering. Today, the Daimler The management reports for Daimler AG and for the Daimler Group is a globally leading vehicle manufacturer with an out- Group are combined within this annual report. standing range of premium cars, trucks, vans and buses. Its product portfolio is rounded out by a range of customized With its strong brands, Daimler is active in nearly all the coun- financial services and mobility services. Daimler’s goal is to con- tries of the world. The Group has production facilities in tinue playing a leading role in the development of products Europe, North and South America, Asia and Africa.