Christina Schenck: Good morning, ladies and gentlemen, and a warm to our Capital Market Day Mastering Transformation. We will kick today off with our Annual Results Conference for 2024. We're very happy to have you here with us today, and I would like to introduce myself. I am Christina Schenck. I'm the Head of Investor Relations and Treasury.

Willem Spelten: Good morning, everybody. My name is Willem Spelten. I'm Heading Corporate Communications. Also, a warm welcome from my side. We start today with the Annual Results Conference for the like approximately first 30 minutes, followed by the Capital Market Day Mastering Transformation providing a comprehensive update on where we are standing and where we are intending to go for analysts, for investors and for the media.

Christina Schenck: So in total, our presentations will last for roughly two hours. You can follow our stream with simultaneous translation into Chinese and German. For those of you in the room, you can access the translation function as well. Channel one for German, channel two for English, and channel three for Chinese.

Willem Spelten: And both Q&A sessions after the CMD will be broadcasted on our website, so you can also join digitally. The event ends around noon today, and we will now start with the annual results conference hosted by our CEO, Ola Kallenius, followed by our CFO, Harald Wilhelm.

Ola Kallenius: Good morning, ladies and gentlemen, and hello to everybody that is watching this Annual Results Conference and Capital Markets Day on the stream. And again, welcome. We would like to start by sharing the numbers of 2024, but then spend more time today talking about the future of this company, what's happening in the industry and what is Mercedes-Benz doing to propel itself into a prosperous future. That is what today is all about. But let's start and look at the numbers for 2024. Everybody knows that 2024 was another exciting year in the auto industry, but a year that was also defined by macro challenges and also a tough market condition. How have we fared during this year? In the market conditions that we encountered, especially in China in the second half of last year, yes, it did affect our revenues and accordingly also our profitability. But in that context, to be able also in the competitive set to print a €9.2 billion free cash flow is a very strong statement of a company that has a solid foundation. And in spite of the fact that we returned back to shareholders almost or around €10 billion through the dividend, but also through share buybacks, the net industrial liquidity of the company still sits at around €35 billion. So the foundation, and the balance sheet of this company is very strong, which we think is an advantage as we tackle the next few years where the market conditions probably also will see its challenges. What was going on at Mercedes-Benz Cars? Well, at Mercedes Benz Cars, for those of you who joined us yesterday, you got a little special presentation on the G-Class. It's one of those unique icons in our portfolio. And surely, that was one of the big events in 2024, launching the all new G and also the insanely performant electric G that many customers are also now turning to, the perfect car for adventure, now at zero emission. But 2024 was also a year, where we have laid the foundation for what we're going to talk about in the update into the future. Markus Schafer, Head of R&D is here today. His team, but also all the teams in R&D, in production, and marketing and sales, they're readying themselves for what is going to be the biggest tech and product launch offensive in the history of this company. So whereas maybe we didn't have so many launches in 2024, that didn't mean it was a slow year. It was probably one of the busiest years that we have ever had, and we're ready and poised to go. If you take a little bit closer look at the structure of the sales, as I mentioned, we and others encountered a Chinese market with subdued consumer sentiment. And, yes, that also affected some of the upper ends of the segments. Whereas we have in a successful way protected our market share and in many cases actually increased our market share, this is something that we had to deal with in 2024, and we're looking at how does this develop in 2025, and how do we make sure that our very strong position on the top end that we can protect it and also in the next few years build upon it. On the xEV side, if you double click on xEVs and BEVs and you do an analysis of the premium luxury market or what's going on, you quickly see that in the segments where we have the most of our first generation electric vehicles, which is E-Class and S-Class segments, sedans and SUVs alike. In most markets, Mercedes-Benz is the EV leader in those segments. And this is in spite of the fact with all the market pressure and many market participants resorting to price action, you're not completely immune to that. We try to be a little bit more careful. The biggest segment in the EV side for premium and luxury is GLC and C-Class segment. There we have no offering in our portfolio today, but when we meet here next year, we're ready to go. Those products are in the pipeline, and they're coming in 2026. So in a thoughtful way, we manage through this period. You can see that the plug in hybrids have been quite successful. I don't think there's any company in our competitive set that has a better lineup for plug in hybrids. Most of our offering is WLTP 100 kilometers and above. Very few companies have that. And we can see a renaissance of the plug in hybrids. And in this day and age, where I think it's clear that the transformation into electric mobility is going to take a little bit longer than maybe most people thought five years ago, and it's going to be heterogeneous. To have that card as well to play, is good. That's a strong hand. The Van division. The Van division had another banner year. The profitability was, again, unusually high. When, Mathias Geisen, who has now moved into marketing and sales, presented the van strategy a couple of years ago, he said, a light commercial van company based in Europe that can print a double-digit margin at all is a phenomenal result. And here again, they have done it a north of that. What is it? It's the strength of the portfolio. It's the strength of the products, good structure, disciplined go-to-market strategy, and also good on pricing. That doesn't mean that you can sit back. The Van division is going through similar to the passenger cars, maybe even more in relative terms a very big change. You know that the cycles of vans are longer, and we have started also here the biggest investment and product offensive in many decades. And we will launch the first product of the so called VAN.EA architecture next year and then following products the years after that. They're as vigilant about cost as we are on the passenger car side. If you're making more money, you cannot kind of relax and become a little bit loose. You have to have the same discipline. One example of that, we're announcing that we are, again, adapting our production network. We're selling our plant in Argentina to improve the utilization of that plant to an investor group. So they will act as a contract manufacturer to us, but can use unused -- unutilized capacity in that plant for other things. So again, improving our fixed cost position for the van division. So strong profitability, but not a reason to sit back and relax. Also, the van market could see, that the market was normalizing somewhat, and there was also market pressure on vans, which affected our overall sales. But as I mentioned, with a very, very good structure, we are kind of in Europe the premium van of choice. We have a strong business in the United States, and we have a niche business in China that we think with the next VAN.EA architecture, we can grow further. That leads me to Mercedes-Benz Mobility. For those of you who have covered financial services company, you know in the interest cycles, you're at the back end, you're at the front end and so on, that it is affected by interest rates, and there is a lag there. I think a very important thing for the financial services business is what does your new business margin look like? When you acquire new business? Is it healthy, or is it under pressure? So even if the actual results in 2024 was not one of the best years of our Mercedes-Benz Mobility division, that new acquisition profitability is looking healthy. So I think we're preparing ourselves for a cycle there, depending, of course, on how interest rates develop and if inflation stays down or maybe comes down even more. But I also want to give some kudos to the mobility team, because not only are they kind of the wing person of marketing and sales facing the customers, they're doing other enabling things. And one of those projects is charging solutions. What was a PowerPoint presentation and an idea a couple of years ago is now starting to become reality. Through participation in consortiums and through our own activities, we are now building a Mercedes-Benz charging network. High power charging network will be fantastic for this car that is next to me here around the world. And I've already visited some of those, both here in Europe and in the United States. And kind of really feels good when you are a Mercedes driver, you hook up, and it's just plug in. It's very quick, and you go. And the message for that activity is clear. Going into the future with the electric offensive that's coming, the message to these customers is we've got your back. If you get a car from Mercedes, you're going to get the convenience with it. And with that, I will hand over to Harald who will drill down on the financial numbers. Thank you.

Harald Wilhelm: Yes. Hello, everybody. It was from my side, very happy now to dig a bit deeper into the numbers, obviously. And I would say let's get started with cars, right? So we heard on sales before, revenue evolution, I mean, is in line with the sales. Given the circumstances, Ola, I mean, pointed out, we printed 8.7 billion of EBIT on the car side and the number slightly higher than that on the cash flow before interest and tax. How did we get there? Let's have a look at that. I mean, the bridge, but before digging into the bridge, obviously, I think a word on the fourth quarter, where did we end up on the fourth quarter? Also at 8.1% is on the full-year, so ahead of the 6% to 7%, which we predicted at the end of the third quarter. And that was thanks to a better volume, definitely a strong mix in the fourth quarter and also more cost efficiencies, which we could pull somewhere already in the fourth quarter, which I think is encouraging if we think about mid-2025. But back to the full-year and the full-year bridge, obviously. So what happened in 2024? Well, very obvious on the chart, the bucket volume structure and net pricing is negative. Inside, I mean, you have net pricing being negative. You have the lower volume. You have a bit of a worse mix in 2024. And we also stepped up the effort to enhance product content, so what we call life cycle measures which had a headwind for 2024. As well, at the same time, as we guided for the used car business came in significantly lower than 2023, and we also recorded towards the tail end residual value adjustments in the bucket of volume structure net pricing here, as you can see. On the FX side, we see chiefly the impact of the Turkish Lira. What happened however on the industrial performance side, and I think if you look at that, that also is encouraging if we think about 2025. Basically, it's €1 billion of an improvement. If you bear in mind that within that, we had to swallow headwinds from onetime supplier cost, meaning chiefly due to the capacity adjustments we have been talking about since quite a while. So you can see that the underlying improvement is even higher than the €1 billion in 2024, coming from manufacturing, coming from material cost efficiencies as well as raw material tailwinds, which we could cash in. And talking about efficiencies, I would say also you could see efficiency at work in the R&D markets, right? So really, I mean, trying to work hard on the products, but also on the efficiency of the engineering organization, that's what you see basically here in the bridge. Leaves me with the other bucket, what happened over there, lower BBAC at equity result, including the China Dealer support we had been talking about, I mean in the third and the fourth quarter. Some lower valuations, valuation adjustments, impairments, which sit inside and the absence of prior year positive impacts, which favored 2023, which were no repeat in 2024. A word on the adjustments. The diesel ones, I think are well known from the first quarter already. The new one is €350 million adjustment on top on ACC, and that is related to the adjustment in terms of the adjusted industrial ramp up side at ACC, which factored in at €350 million outside the underlying in the reported on the right hand side of the chart. How did we translate that into cash? So at a rate of €1 billion or even yes, at a rate of €1 billion, let's say, €9 billion, how did we get there? I would say, overall working capital, I mean pretty well managed. Inventory down, so definitely a tailwind here on the cash side on the inventory. Trade payables were also down, offsetting that I mean more than offsetting that. You see that on the numbers, I mean, on the chart. Net investments running ahead of PPE now but obviously in support of the product portfolio firework we are preparing. And also here on the others, I mean the usual one, the reversal of the equity and the DV for BBAC. And obviously, you see the noncash elements from valuation impairments as well as the dealer provisions, which have been recorded but not cashed out yet in quarter four. So what else? Let's move to the indicators on change on cars. I think these KPIs we're looking at on a regular basis to track whether we are online with the strategy execution. Judge, yourself, please, I would say despite the challenges we could see in 2024, the ASP is up by almost 40% between 2019 and 2024. We ended in the fourth quarter the ASP at €72,000 which I think is a good number. Look at the workforce reduction, 11%, 15,000 people. They're of 10,000, I mean, white color, which we reduced since 2019. And that is obviously a key support to the fixed cost achievement of 19% compared to 2019. And I would like to emphasize this is net of inflation. So if you bear in mind the inflation numbers in Europe and in the world, I think that's a quite sizable number. On the investment side, you also see the discipline at work. All-in-all, 8% down compared to 2019, with a strong emphasis on the R&D side to support the product portfolio development, but a very stringent and disciplined approach on the CapEx and the PPE side. But we'll talk about that a bit more in-depth later when we come to the CMD part of the session. Now I look at the vans. Ola commented on the sales side already. I would like to emphasize, however, I mean look on the revenue side, which suffered less. I mean, how was that possible? Mix at work, disciplined pricing, but mix favorable mix at work, and that is also key reason why you see very solid print on EBIT and cash flow for the van division in 2024. Let's go to the bridge here as well. So how did we move throughout the year, ending at a very strong 14.6% return on sales. The volume structure pricing bucket is slightly negative, so the volume loss has been quite nicely compensated by a better mix in 2024, thanks to V-Class and other portfolio evolution. As you know, we stepped out also on the metrics in the U.S. and the pricing was actually pretty stable in 2024. Looking on the industrial performance. So this is slightly negative. Some product related cost and inflation headwinds, which we suffered here. And on the others, that is related to model changeover at FBAC. I would leave that here for the vans and jump to from the EBIT side and jump to the cash side. Strong translation of the EBIT into cash at a rate of one, working capital actually balanced, well managed, and the investments running ahead of depreciation, not a surprise is we invest into the ramp up of the van platform on the EV as well on the ICE side. Looking at the indicators of change on vans. Well, also a pretty decent ASP step up by 40%. Active workforce reduction also at work, 10% down. Fixed cost, also 19% down. Again, net of inflation. And on the investment side, obviously, up in support of the VAN.EA. So I would say strategy execution, if you judge it from the numbers, well on track on the van side. Looking at the mobility. New business, slightly down, in line with the market evolution. Tough competition in China here. A bit of FX effect on the portfolio side, but roughly same order of magnitude. But EBIT impacted, as Ola pointed out already before, what is the reason? If we look into the bridge, it's pretty obvious here that the interest margin is a function of the past interest rate developments suffered. That is the majority of the impact you see here on the slide. A bit of resilience also impacting here on the fleet side. And then we had impact on the cost of credit risk deterioration in the H1, chiefly in the coming from the U.S. which stabilized, I mean, in the second half of the year. What else to say? You also hear, you see efficiencies at work, I mean, to compensate, to mitigate the impact from the margin side. And also, we stepped up the effort on the charging infrastructure, which impacted I mean the number by roughly 1% return on sales in 2024. So without, it would have been a bit closer to 10%. Now looking at the group side. We talked to vans and cars and mobility. So I would just say the recon, pretty balanced. So central function has been basically outweighed by positive contribution from the Daimler Truck side. With that, I mean, we are at an including the adjustments I talked about before, we are at the group EBIT reported at €13.6 billion, that translates after effective tax rate of 26% into a net income of €10 billion, €10.4 billion to be precise. And you can see the EPS of €10 which obviously has been favored, supported by the accretion effect from the share buyback. So looking on the cash evolution in 2024 at the group level. Again, business side, we explained, leaves me with the income tax, 3.9% obviously down in line with the underlying results. Interest rate, I mean is positive. And then in the others, you have the DV contribution from trucks throughout the year. And yes, I think in these circumstances of where we had been in 2024, €9.2 billion is a solid number in terms of free cash flow. On the NIL side, well, you see the cash flow at work was €9 billion as explained before. You see the shareholder returns, €5.5 billion of DV. We completed both programs of the share buyback, the four plus three programs, €7 billion and that means €10 billion have been returned to shareholders, to you in 2024. We also got some DV and capital return from Mobility. That makes an closing net cash position of €31 billion compared to an opening of €31 billion. I would say this capital allocation framework was pretty much at work. Wouldn't you agree with me? So let's come to the outlook. So the assumption chart, I spare you that. However, I would like to emphasize one point. The outlook is based on the current today's regulatory framework. What does it mean? Any additional tariffs over and above, which do exist today are not included, I mean in this guidance. However, I'd like to give you a bit of a sensitivity if the tariffs for exports from the EU into the U.S. would step up from the current 2.5%, say to 10%, what would be the impact on a gross basis on the margin for cars? I would say up to 100 basis points in terms of, gross impact, coming from that. However, before any mitigation, mitigation, when does it come, how many vehicles do you have in country, how do you react to it. That's why it's just utterly difficult to give any number on that one, and that's why we guide before any incremental impact, which could be possible in this respect. A word on the measures which have been taken in China for the imports from the U.S. to China, which impacts obviously vehicles with engine size bigger than 2.5 liters, displacement. So that is a very limited impact. The reason is we already have quite a lot of vehicles in country. Therefore, the base to which applies is more limited. So now let's dig a bit into the division guidance for the cars. Where do we see the sales evolution in 2025? We take a prudent and a cautious view here, I would say. We look at the various markets. We look in particular at Edge China. We see a very competitive environment continuing in China in 2025, and that's why we assume some further impact. Whereas in Europe, we see rather a stable sales situation for 2025. Overall, in the U.S., we see a very solid underlying custom demand momentum maybe in terms of the group sales. However, the number might be slightly lower in '25 than in '24. That means, all in all, I mean, we see the sales for 2025 at slightly lower than 2024. What does it mean for the margin side? Sorry, first on that, I just jumped over the xEV share. So we expect that to step up. As Ola pointed out before, very strong plug in portfolio at work where we see good momentum. Obviously, this beautiful vehicle will come to market, but the impact in 2025 and taking the share higher is still more remote. That is something you will rather see then in 2026 moving forward. Now coming to the margin on cars. So we expect, I mean, the margin on cars to be between 6% and 8%, return on sales adjusted, again, before the tariffs I explained before. How do we get there from the 8%, the 8.1% in 2024? The volume is slightly lower, as I just explained to it before. We see this -- the mix slightly favorable with all of the beautiful products, which came and will come to market. We see the pricing stable that is our target. This is our ambition that we hold and defend and stay disciplined, I mean, on the pricing side. Now the 1 billion question, CO2 in Europe, I would say that 1 billion question turns out to be a low three digit number for 2025. So I think all of the concerns you had, at least I think for 2025, we can calm you down on that one. And so then actually, you might have know what is really changing the needle. As everything I said before, more or less is a wash. So, I mean, you're left with a lower contribution, given the volume I mentioned on the -- from the BBAC side. The contribution from BBAC in 2025 is expected to be lower. We do anticipate some FX headwinds for 2025 and, what is in our hands to mitigate that, to stabilize them in the margin, performance, performance, performance. And that means, that we take a hard approach on material, on production, on fixed cost to mitigate the impact. I mean, I said before. And with this, all in all, if you make the math, I think you come from an eight to a bucket of six to eight for 2025. What do we expect for the first quarter? Maybe a word on this at this stage. So we see the volume for the first quarter for cars at about the level of quarter one 2024, and we see the result, the margin for the first quarter also in within the guidance bracket, i.e., the 6% to 8% for the first quarter. What else on the KPIs here? The CapEx side, we see a significant increase. That is to prepare and support the product launches, I mean, to come '25, but then '26 up to 2027, whereas the R&D side is expected, I mean, to be flattish. And with all of that, I mean, we believe we can basically convert the margin into cash at the rate of 0.9 to 1.21. On the van side, we see the market being intense. So with a lot of competition here, we want to stay disciplined, i.e., value over volume. That's why we also see the volume slightly down here on the van side. We'll step up the xEV share with the Sprinter, the new eSprinter. And what does it mean for the margin? So we see that at the 10% to 12% for 2025. How do we get there? Lower volume, as I just said. The pricing and the mix, solid, stable. Here the headwind from CO2 in Europe has a more meaningful impact. The number in absolute is higher on demands for Europe than it is on the cars. And therefore, obviously, on a percentage basis, given a smaller business, it has a more material impact. So probably one of the most important levers or impacts on the margin walk from 14% to 10% to 12% between '24 and 2025 is coming from the CO2 in Europe. And at the same time, we are ramping up the effort and the prep work for the VAN.EA or Van architecture and the investments into our Eastern Europe Beowulf facility. So with all of that, before tariffs, a 10% to 12% on the vans. Now on the Q1, we see that in terms of the margin, also in the same ballpark as the fourth quarter. And R&D and PPE is expected, I mean to increase significantly to prepare for VAN.EA and the Jawor. Mobility. We expect the return on equity to be between 8% and 9%. What do we see here? Basically, we see some tailwinds in markets outside of China. However, pretty tough competition continuing in China. So that's, I mean, basically how that balances out. Then we continue the investments. We step up the investments into charging in 2025, whereas, I mean, the cost of credit risk are expected to be rather flattish. That brings you to 8% to 9% altogether. And also, the Q1 is expected to be in that corridor. And it leads me with a group guidance. So on the assumptions of the division, obviously, no surprise that the group revenue is expected to be slightly below in 2025. The group EBIT as well as I mean, the cash flow is expected to be significantly below on the assumptions I just outlined on the division side before. If you then factor on the cash flow in the matter of fact that the cash conversion on the van side is lower due to the ramp up of the investments on the van side, I think you explained the guidance for the cash flow at the group level. And I think with this, I hand back to Cristina and Willem. Thank you.

Christina Schenck: So, thank you very much, Ola. Thank you very much, Harald, for providing us with a review on the 2024 numbers.

A - Christina Schenck: Welcome back to our analyst and investor Q&A. I'm very happy to have with me Ola Kallenius, our CEO; Harald Wilhelm, CFO; and Markus Schafer, CTO. Please bear with me, I will take you through the safe harbor wording for a minute before we start. I would like to remind everyone that presentation and Q&A are governed by the safe harbor wording that you find in our published documents. Please note that our presentations and comments contain forward-looking statements that reflects management's current views with respect to future events. Such statements are subject to many risks and uncertainties. If the assumptions underlying any of these statements proof incorrect, then actual results may be materially different from those expressed or implied by such statements. Forward-looking statements speak only to the date on which they are made. Now just a few practical points. Please ask your questions in English. And as a matter of fairness, please limit it to two questions. Please state your name when I call you and the name of the institution and then ask your questions. For representatives of the media, please understand we have the analysts and the investor Q&A first. Yours will follow straight after. To the investors and analysts following us online, you're welcome to send us questions to the email address, you will see on the screen. We've also shared it this morning. And now for the participants in the room, please raise your hand if you want to ask a question, and I will call you up. Once it's your turn, please unmute yourself, clicking the speaking button and once you're finished, please also mute yourself again. Ladies and gentlemen, I don't have to ask you to raise your hand. So I see lots of hands here. I will start with you, Tim, over to you.

Tim Rokossa: Yes. Thank you very much. This works. Tech is amazing here Ola. That's good. I have two questions, please. The first one, probably go to you, Ola. You said it's about distilling the DNA of the brand in many of the things that you are deciding to do. Can you help us distilling the essence of today? You left us with a lot of information, a bit we already knew. You made it sound like a very logical continuation of what we learned in Monaco three years ago, yet the world has totally changed. You're taking out capacity, you're reversing back from the BEV focus towards more ice focus again. So you're actually changing quite a few things, which is pretty difficult. I assume. I think most of us left Monaco thinking you want to do luxury and you want to do bath. What are the two things you can leave us with today? And then secondly, Harald, perhaps more to you. We already had the discussion post Monaco that we find it very difficult to judge how much you can control internally, if you don't give us a reference number for things like fixed costs, investment numbers we kind of know, right, but that sort of stuff. It's kind of the same today. I think most people would assume your assumption that pricing is stable sounds quite ambitious with everything that's going on in the world, or the more important it is for us to understand the cost side. Can you help us to drill down on that a little bit more? Is there any net number that you want to leave us with that you want to achieve in terms of cost savings? Thank you.

Ola Kallenius: Yes. Thanks, Tim. I'll start with answering your question. So whereas the market conditions are indeed different now and the landscape is different. And I would say we all agree that transformation is not a linear thing and probably in many markets, it's going to take longer. What are the two things that you need to take with you. In terms of the product portfolio, we said we wanted to elevate ourselves in the different segments that we operate in, top end, core and entry. So this product that we're launching now this year, I think, is the first proof point of that. In the entry, narrowing the portfolio to the positions that we think are going to be most successful on a worldwide basis, elevating the substance of the product but also the appearance of the product and trying to gain a healthy margin development in that segment. At the same time, we said we want to grow the core we had, let's say, a gap in the portfolio, the biggest volume position for BEVs in core is clearly the GLC segment and the C class segment. That is about to be filled next year and we said we wanted to grow organically in core. And then we wanted to put more emphasis on the top end. If you remember the chart in my presentation with a number of models in the next three years, you could clearly see that the highest number of models is in the top end, not only to defend, I think you said that also had to defend our position with this, which is strong there, but also try to build it and venture into new things like AMG EA, where we want to kick off an electric chapter also in the Performance segment in an authentic and credible way. So from that point of view, even though the market conditions have shifted significantly, even though China is a different place now than it was maybe three or four years ago, I would say that we're staying the course. And if somebody would be looking at saying, "Well, you could sell more cars, if you do a car that is smaller than this car," yes, we could. But would it really be profitable growth? We don't think so. And with the brand that we have, the cost structure that comes together with that brand, honing that, I think we used the Diamond as a honing that we're largely staying the course. One thing has changed even though we had the insurance policy built in, we thought some years ago that the progression towards EV on a worldwide basis would go faster. We had said we will be able to serve markets by the end of this decade, fully electrically comma where market conditions allow. If you don't believe that market conditions will be dominant electric in 2030, 70%, 80% or more percent it would not make economic sense to just cut off your very healthy and profitable ICE business. So a little over a year ago, we made a decision to do a dual track to activate the insurance policy, you saw the new V8 yesterday at AMG, I mean we never stopped readying the engines and transmission combinations for the next generation, but we're now adding the vehicles to it. So yes, there is a change, but it's a change that does not lead to disruption. It's not like we stopped and it's like, oh my goodness, let's dust off the room, Marcus and start again. It is happening in a flow it has an impact on our investment profile. But in spite of that, I think what Harald showed, we're managing this in a sensible way. So we're staying the course. But if the world changes, you cannot be so stubborn that you're not willing to adapt, you have to adapt as well. And that's what we're doing on the BEV ICE dual track.

Harald Wilhelm: On your second question, I mean, Tim, well, may I think we give quite a lot of data points. You will understand that we're not giving the pricing objective for June 2025 on a given product. There, we said, we want to stay disciplined, which means the strategy in terms of value over volumes absolutely still applies. However, I mean, we'll be competitive as well. So where we deem appropriate, and it means we can also strike. But this is case-by-case, market-by-market, product-by-product, I think on this one, one cannot give an absolute reference. Definitely, the product momentum to come will use a part of that momentum and the step up of the product, also to step up competitiveness of the offering further. But altogether, therefore, I think the assumption to go for a stable pricing moving forward. If you take all of that into account, I think is a fair one. When it comes to absolute references on production cost on material cost. I think it's a bit difficult, as you know by heart, that there's volume mix structure. So giving a number doesn't mean anything but you see the percentage improvements, which we did which we want to do moving forward, which I think are very ambitious in a pretty short period of mean of time. You did see in the bridge for 2024 already how much that yields in terms of year-on-year performance, 1 billion industrial performance, underlying even higher, as I said, as you have one time inside. And for fixed cost and investment, actually, you have actual references. On the investment side, clearly, you did see €12.1 billion for cars in R&D and PPE in 2024. So it goes up by €1 billion and it comes down in '26, and it will be 10% below 2024 in 2027 and that means 20% below 2029. So I think you have the references here. And on the fixed cost, let me say, and I say it's going to be more than 10%. You do not -- you cannot retrieve all of the fixed cost, I mean from the P&L statement as a part is obviously in SG&A, a part is in COGS. But let me say, if we achieve the incremental 10% by 2027, fixed cost will be at the edge of a single to a double-digit billion number, which I think is quite meaningful guide.

Christina Schenck: Patrick, you were very fast. So you go next.

Patrick Hummel: Thank you, and good morning. Thanks for your presentation. Two questions from my end. First one, is regarding the growth you envisage in the top end segment. There seems to be a significant increase in that bridge for 2027, and I'm curious to understand how the split between BEV and ICE would look like for that year within the top end segment? And also how you think about it by region? I just generally think we have a lot of evidence in the market that BEVs in the top end segment are not an easy sell when it comes to residual values, when it comes to consumers that expect growing the eight engines, et cetera. So I'm just trying to better understand how much optimism or aggressiveness you've baked into your TAS [ph] share growth driven by BEV? And my second question regarding Daimler Trucks. You had it on a slide, Harald. But if I look at the authorization, the €5 billion share buybacks you're going to do or plan to do over the next 24 months, you would just max out that 10% authorization without any potential for returning even more in case of a Daimler Truck stake sale. So I'm wondering, does that mean we should think about another spin of Daimler Truck shares or a special dividend in case you sell down your Daimler Truck stake? Or how would you go about it? Thank you.

Ola Kallenius: So, I think I'll start with the first one. If I double-click on the chart with all the cars on it and you could see that there were a lot of positions on the top end, some of which I referred to. So you get a major, major refresh of the S class and the equivalent Maybach next year. You get a major refresh of the GLS also next year. So here you have the main vehicles that carry the eye side of that operation. You saw last night at AMG that maybe we're kind of plugging some holes. So the resurrection of the V8, the brand new flat crank V8, I mean, who isn't saying enough to do something like this at this day and age? Well, the AMG people are. And if you carefully looked at the chart that Michael showed yesterday, you could see that there were other ICE variants also in the AMG portfolio coming. So I would say on the eye side, we are refreshing, renewing and maybe tidying up the picture a bit. Now to your question on the BEVs, yes, we're investing into this AMG EA architecture. I remember when we went to our test track down in emending in the fall. And it was the first like real drive had driven the AMG EA early prototypes up in the north of Sweden on ICE, but it's not the same thing. And I drove this thing, and again, like holy shit, this -- sorry, for the expression. This is what performance should feel like. And the guys had even programmed and we will most likely launch that. There even program what they call the V8 mode. So I turn on the V8 mode, and it sounded like a V8 on the inside, on the outside, and software emulated the gear shift, a good job there of the team, even if you don't need it technically speaking on an electric car. So I was thinking to myself, this is in same performance. It's proprietary technology so when do we break the psychological barrier of the customer saying, "Wow, this is so good, I desire this and I want it." That is the attempt that we are going to make. But even the AMG version of this year, 400-kilowatt plus with those same features and everything, they're going to be a blast to drive. So we will do our utmost to change the perception or maybe create the perception of a valuable performance electric vehicle as well. Is there some uncertainty? Sure. There is some uncertainty. But the technological package will be the real deal, and that is part of the growth. And I did not take out my yard stick here to measure exactly on the graph. But I think we were a little bit more cautious on what that absolute number is going to be like in 2027 than we thought some years ago when the market conditions were different. So we were now at 280-ish and I think it's reasonable to believe that we can climb above the 300 million again and then build upon that.

Harald Wilhelm: With regard to your second question, I think there are two elements to answer. I mean #1 is a more technical as by corporate law, and you know it, I mean you can only seek 10% authorization from the AGM. So given the market cap, well, this is maybe slightly above €5 billion, but it is not €10 billion or is not €8 million, maybe it would be different. I mean if you would have a different view. But I mean, as of today, it is what it is. So therefore, I mean the authorization is a precondition. And obviously, what we proposed, I mean, to the Supervisory Board and what got approved or need to be in sync with that authorization. That's why it is an envelope. Also technically in the order of €5 billion, supported by cash flow and monetization of the Daimler truck stake. To your second question, I mean, could we expect something else on the DT stake? No, we checked it carefully from a legal point of view, there is no precedent of minority spin in corporate law. It would be a pretty complex operation with lots of uncertainty. Would require lots of approvals. It would also constitute probably tax risk or I mean, tax burden for many of the investors, which you don't want to see. And frankly, I think we're not in a hurry. I always said it. It's a great performance evolution of DTE over time. There is more potential to come. So careful market-friendly monetization, I mean, over time, and you know what the liquidity can absorb I mean you know that better than me. I think this is a way to go, and that will support, I mean, the cash generation in '24, 2025, and we'll use €5 billion of that to buy back shares, and that's what it is.

Christina Schenck: George, over to you.

George Galliers: Great. Thank you for taking my questions. George Galliers from Goldman Sachs. The first question I wanted to start with is, what do you think is the benchmark today in China for a premium car player with respect to Level 2 ADAS? Is it point-to-point driving operating 98% of the time with minimal need for the driver to intervene? Is it lower than that? And how is the CLA going to perform relative to that benchmark? The second question I had was just with respect to the net liquidity. €30 billion plus is a very big number. Why is that required? Some of your global peers are saying they need effectively close to zero. I think in the past, Daimler talked about a number of €10 billion when you're a larger company with trucks. Is this level of liquidity required, because there might be M&A you have to pursue from a technology perspective? Is it required because the earnings in China could be read at some point? Is it required because maybe if the Europe keeps the 2035 ban on internal combustion engines will go into a period of very low volume in Europe? I think the market really wants to understand why that security blank is needed.

Christina Schenck: Marcus, do you want to start?

Markus Schafer: Yes. I think you're hitting the point. I think one of the great customer benefits that customers enjoy in China right now is assisted driving and especially what we call Level 2++ driving. And this is really an additional help and assistance to the customer. The clear goal we have to be at benchmark levels with this car with this AI with the supercomputer and the car with the sensor set that we have in the car with the compute algorithm to hit this benchmark level point-to-point, driving in very, very dense urban traffic and the key of the system was developed, especially in busy, busy China streets. So that's exactly what we're targeting. What are we doing in terms of even topping the competition there, is reducing the hardware set there. So we are driving a high-definition map less, because we're not using a high-definition map. And our development with our algorithms, we were able also the lead the LiDAR in the car. So we are able to perform on the same level as benchmark in China with less hardware. Plus, and we should elaborate in another workshop, what we call functional safety. So we have a long, long history of developing ADAS system. 25 years we are working on that in-house, especially when it comes to functional safety, which is a key requirement from our point of view there to put you in a safe space there. I think also we're going to define a benchmark when it comes to functional safety. Third point is cooperative steering. Typically, when you interfere in a system in China and start to move the steering wheel, then you kick out the system and we have a long tradition that you can do both at the same time. And this gives you even additional feel of safety and security and that you are in control if you want to be. So I think we are adding additional flavor here defining really, really top when it comes to assisted driving, especially in China, but also in the U.S. than in Europe, as you know, is not allowed yet. But you will drive this car this afternoon even here in Germany in Sindelfingen. So we'll get the experience in Sindelfingen. So we are able to scale the system also globally if legally and regulatorily allowed.

Harald Wilhelm: And George, your question on the nil. I agree with you, €30 billion is a very comfortable number. But there -- is there any hidden agenda behind the €30 billion in terms of retain them, clearly, no. How to illustrate that. Well, I mean if we would see the risk of China basically turning into red. I think I wouldn't stand here and talk about the objective to retain BBAC in double-digit territory. If we would see the risk of volume collapsing globally as a function of market ISEV, whatever, I think we would not stand here and give a margin target for 2027 as we did. And if we would have any material M&A in mind, I think we would not stand here and say that we intend to generate free cash flow from the organic business and then use the DT stake and I mean to do the €5 billion share buyback. It will be just totally inconsistent. And would they be? So yes, it is a very healthy balance sheet. It's -- I think it's good to have it. But I think there is, at the same time, a very generous return policy to shareholders as demonstrated and I think earlier today with my little math in terms of total shareholder return of 100% or the €100 or €200 example. And I think with the €5 billion and the DBO €4.30, you see the commitment to continue in that direction.

Christina Schenck: Jose?

Jose Asumendi: Thank you very much. Jose from JPMorgan. Thank you for the presentation A couple of questions. I was very impressed with the China margin. So would love to hear a little bit more around the material cost and the fixed cost initiatives in the region to sustain the margin in the double-digit level. Is there also maybe tactically an option to maybe take down some of the capacity in the region. I think you mentioned on the slides optionality. So how do we think about that maybe in '25 and '26? And then second, on the sale of the Daimler truck stake, do you have any KPIs any margins you would like to see? Any elements you would like to see from Daimler truck to maybe judge a little bit better the timing of the sale? Thank you.

Harald Wilhelm: Yes. Thanks, Jose. Maybe very quickly on the DT stake. I think we said everything which has to be said on the subject matter. So we intend to -- we would consider, I mean, monetization in the doses in the way I described it before, and do that in a market-friendly manner. But I think any other indication, I think we know -- I mean let's see as we go along. We have two years as part of the SBB program as obviously, that is going hand-in-hand. So nothing to be added, I think in this respect. On the China margin, and first, I mean, let me say yes, 15% is a good departure point, but it's a good competitive environment. You saw all of the initiatives to protect that moving forward. But I would say if we're able to retain the BBAC at a healthy margin level in the super competitive environment with having the right products in the market, adjusting the cost base down, grapping into the opportunities also for more local sourcing. This is the fitness check which then I think makes, I mean BBAC super robust and maybe it's even an opportunity, I mean to take some of that opportunities over to rest of world. And I would also say maybe I'm talking about BBAC 15% here today, 2024. This is BBAC result only. I think you all know by heart that we're doing supply business, which has a decent margin. And there are other profit pools, I mean on top of it. So the entirety, I think is good and demonstrated in a super competitive environment, 2024, that it is resilient, and we will make it even more resilient moving forward. Jointly with a partner, jointly with Spike absolutely determined also, I think pretty clear is they have a joint interest with us to make BBAC successful in the future in terms of its products, but also in terms of its bottom line.

Markus Schafer: But maybe also to add partnerships. I mean we were approving with our four-cylinder engine to have a local development of components there with local specification with local partners could take us to cost levels that we have not seen before. So follow the source was the typical approach in the -- actually in the present, but doing more localization with local partners there. This is the key focus right now of the R&D and procurement team in China and elaborating on further partnerships also when it comes to components.

Christina Schenck: Henning?

HenningCosman: Yes. Thank you very much. First one, perhaps for Harald to come back to the pricing. I appreciate you don't want to give us price points for '26, but I just wanted to check with you if you agree that. Well, I think we gave a very reasonable guide overall, right, for 2025? Would you agree that within that pricing is perhaps the most volatile or uncertain assumption and indeed, whether it's stable or not stable, could make the difference between the 8% and the 6%. Would you agree with that? And I think in previous calls, you've gone through the elements of pricing list price discounts dealer compensation, residual values. If you could touch on that and how you see that the stability element. And the second question is also a little bit geared to the 2027 and maybe to bring in Marcus again. On the slide, you had the 30% ex-EV penetration. If we assume the increment comes from EVs is double of what it is today. How do we think about that in terms of margin parity? Because if you double the EVs, you go to 20% EV alone, while you have the 10% margin ambition, does that necessitate getting close to parity? Is that an assumption that's baked in? Thank you.

Harald Wilhelm: Yes. On the pricing, I think it's fair to say, as you do, that probably is one of the most volatile assumptions in any outlook at this juncture. We have a determination to be disciplined in this respect, but we are not the only one in town, right? So it also depends obviously what's happening in other places by other people. So we do consider, I mean some volatility in any outlook, obviously. But I mean, considering either I mean a massive step-up or a massive step down, where do you put the line? So -- but I mean the backbone is a disciplined approach and product, product, product, product is at the end. I think the product makes a pricing and nothing else.

Markus Schafer: On the on the margin side or I mean, basically, we're bringing the cost of the EV down by more than 15%. We do not assume price premium on the EV over the ICE. That means that we can narrow the gap, but I say it also loud and clear any statement that you can close the gap, we find that a difficult statement and we don't want to promise things you cannot do. So all of the effort is on getting the right products out and getting the cost down by more than 15%, the variable cost of the product, thereby the margin gap will narrow and the hire for longer ICE obviously builds a nice bridge, I mean to absorb that moving forward.

Christina Schenck: Stephen, yes?

StephenReitman: Thank you very much. Could I ask about the CLA again? First of all, maybe a simpler one. You talked -- you're saying the public introduction of the vehicle will be in a month's time -- are you going to open the order book at that time as well? And when will the first customer delivery start for this vehicle? And if you give maybe by geography as well? And secondly, you mentioned about that you understand that BEVs cannot command a premium to the ICE vehicles. When this vehicle was first introduced to us, I think we saw this in May 2022. I think thinking afterwards was that it would have a -- with all the technologies would command a premium. Now you've mentioned the 15% reduction in BEV costs that are coming in with this, but that would have probably been baked in already into some of your thinking. So could you describe some of the other steps you've taken to bring the cost of this vehicle down in order to reach the sort of the new realities of how you can price this in today's market? Thank you.

Ola Kallenius: So I'll start with the timing. We will have what we call the -- we are following our normal procedure here. We'll have what we call the World Premiere in about four weeks' time, which will be at a big event in Europe, invite the world to look at the car. Then we take the camouflage off, we show all the details of the technology. We have teased a lot of the things today. Then usually, some weeks after that, we have what we call a sales release. So that happens later in the Spring on the way towards early summer, then you can actually go in an order. We start in Europe first. The production of this vehicle starts in our plant here in Rastatt, then we kick off production in the Fall in China. I usually have this gap four, five, six months roughly historically. And we also start production in the summer then late summer for the United States, but then we have the shipping. So China and the United States then come in the Fall, and it's kind of then the rest of the world. So that's how it's going to unfold.

Harald Wilhelm: On the margin side, let's not confuse things, please. So let me clarify. So when you say, we do not assume price premium of an EV over an ICE product -- it means this EV product should have roughly similar pricing than the respective main combustion ICE sibling of that product, right? When we say the margin gap between -- or the margin improvement, with a 15% cost down we're doing. We're comparing with predecessor product. So which means if you compare -- we don't have predecessor CLAs, but let me take a GLA to a future GLA electric to be compared with an EQA today will have a definitely better margin, thanks to the cost work we're talking about. So please let's separate the two.

Ola Kallenius: And maybe one thing to mention. I think Markus actually mentioned that Markus and his team have done a sensational job on the combustion one. So on the combustion side, our powertrain, I would say, by our standards, cost-wise is very competitive.

Christina Schenck: Okay. Anthony, over to you.

AnthonyDick: Yes, thank you. Three questions on my side. The first is on CO2 compliance. So thanks for providing the kind of indication of the impact on the cars business. On the Vans business, could you just remind us what would be the impact? I just noted it would be higher. And then could you also break down a little bit how that splits between potential mix dilution and also any kind of costs that you would pay out to your polling partner? And then lastly, on the -- on this kind of topic, if we were to get some relief on the regulation front from the EU maybe in a couple of weeks, how would that impact your estimate for this compliance cost in 2025? Then my second question is on China. Just wondering how, considering what we're seeing the very high levels of price discounting in that market, how you're balancing value and volume. Are you targeting a specific market share or defending our market share in China? And then the last question is on investments. Could you maybe talk us a bit about ICE investments for the year to come, again considering that the lifetime basically of the ICE has likely been extended with what we've seen in the market over the last couple of months and years? Thank you.

Harald Wilhelm: Maybe quickly, I get started on the CO2, and you pick up on the regulatory and maybe the partner framework. And I mentioned that, I mean, the number on the car side is a low three-digit number in the walk from '24 to '25. Maybe let me do it, I mean, the following way. It's a very low three-digit number, which sits in there. And the absolute number which sits in the Van bridge year-over-year is maybe a bit less than double of that amount, which sits on the car side for the reasons Ola explained before. given the higher CO2 footprint, obviously, off of a van vehicle compared to a passenger car vehicle. I hope that it explains, I mean, number one on the car side. But number two, that actually also the walk on the margin from 2024 to 2025, quite a significant chunk of the margin deterioration or dilution in still holding at a nice 10% to 12%, however, is coming from that CO2 impact in 2025.

Ola Kallenius: On the regulatory side at the kickoff dialogue, the so-called strategic automotive industry dialogue at the end of January, pretty much every single industry representative at that meeting. And certainly, the Auto Industry Association that I happened to lead this year as well as the supplier association said loud and clear five or six years ago when the targets were set, certain assumptions were made. It's very clear that in terms of natural demand in the market, proliferation of charging infrastructure, et cetera, some of those assumptions have not come to fruition. So it is wholly reasonable from a regulatory point of view to review this and think about some relief especially in the context of what's going on in the global economics. So you have two other strong economic regions, North America, United States, North America and China, they're not taking money away from the auto industry actually doing the other thing around. They are putting money into the auto industry. Is it the most rational thing for Europe right now to rigidly stick to that or have some flexibility and pragmatism in mind? That's what we're advocating for. Whether or not the EU commission will decide to change 2025, that is unknown. So I don't think it would be serious to put a number to it. We have just said it is a sensible thing to do. If they do it, though, the way we have structured our agreements is we can flex. So indeed, if they create relief, we would have some relief and we'll see what happens. Maybe on the market share for every single car, you look at your relative market share, you look at your relative pricing -- it should come as no surprise to have done the same calculation for this car in China. So we have a hypothesis. But you said it, Harald. We're not alone in the market, and the market is a dynamic place you have to be able to calibrate that in your mind as you get closer to market introduction. But of course, we have a hypothesis. We're not going to name individual volume targets on individual vehicles here, we never have, but that is in place. And it's a balanced approach value over volume is our general philosophy, but it's not no volume. So it is also volume in a market that we have discussed is highly competitive.

Harald Wilhelm: And the investment profile, I think we touched base on that one. Clearly, what you saw in product portfolio and on component evolution serves, I mean a nice portfolio very well far into the 30s and the investments needed for that on vehicle side, on component side, on software side, are embedded in the investment plan we laid out here, I mean, today. How can it work? However, then with an investment coming down. You heard, I mean the streamlining of the drivetrain components on the ICE side and I think largely accomplished is, I mean, they meet EU 7 targets, so I mean you need to be there anyhow. So the investments are largely behind us. And so we can really leverage that, I mean, well into the future and many other components, not ICE related, but I mean EV and ICE, I think is the most prominent example. Obviously can be leveraged. So what's left, so to say on a pure ICE platform is not nothing, but obviously is a much lower effort which is needed to get the competitive products, I mean into the well, the 30s. So -- and all of that is embedded in the investment plan.

Christina Schenck: Okay. I see some red flashes on the screen. So I think we're running out of time for everyone in the room. Thank you so much for asking your questions. Of course, thank you to you also for answering all of the questions and for everyone joining us online. We will now take a quick break and take a few minutes until the media Q&A will continue.