Daimler-Benz Doubles Operating Profit In First Six Months.

STUTTGART, LONDON--(BUSINESS WIRE)--July 31, 1997--

Improved operating results especially in Aerospace

Increased revenues in all divisions -- up 14% overall

Favorable outlook for second half year

Daimler-Benz has posted an operating profit of DM 1.8 billion for the first half of 1997, more than doubling the operating result of the first six months of the previous year (DM 0.8 billion). The worldwide success of new products in particular has substantially strengthened the earnings power of the group's business operations. At the same time, the increased efficiencies resulting from restructuring combined with strict cost management have also contributed significantly to the improvement. In addition, exchange rates favoring Daimler-Benz have helped increase earnings.

In view of the high level of orders, new product launches, productivity increases, and favorable exchange rates, Daimler-Benz expects a further improvement in operating profit for the second half of 1997 compared with the first six months.

The company's mid-year financial results, which were prepared according to US GAAP and presented in London, show group revenue up by 14% to DM 55.9 billion for the period January through June 1997 (first half of 1996: DM 49.1 billion). Increases were substantial in all the divisions and in nearly all important markets. Daimler-Benz is expecting revenue of more than DM 115 billion for the whole of 1997 (1996: DM 106.3 billion).

"Innovation is the key to our success in the marketplace," said Daimler-Benz Chairman, Juergen E. Schrempp, at the half- year results press conference in London. "The programs designed to increase efficiency have continued to improve operating results. The concept of value-based leadership is working. Though we're not satisfied yet with the overall level of profitability, we are beginning to achieve the sort of returns we want. We're going to continue strengthening and expanding our industrial activities and our services business, but we won't be investing in new industries," Schrempp continued. "Our healthy growth generates secure employment. In Germany alone, we'll be creating more than 3,000 jobs and employing ten percent more apprentices this year," he noted.

"Preparing for the future is a top priority at Daimler-Benz. During the current year, we will increase our investments by nearly DM 1 billion to more than DM 7 billion," said Dr. Manfred Gentz, Daimler-Benz Chief Financial Officer, at the London press conference. "At the same time, our financial strength has improved significantly. At DM 4.7 billion, cash flow from business operations exceeds the previous year's figure by nearly DM 2 billion."

Aerospace achieves turnaround 

The greatest increase in operating profit within the Daimler- Benz Group was achieved by the Aerospace division. After the previous year's losses, Aerospace finally contributed to operating profits again with DM 74 million (first half of 1996: minus DM 677 million).

Once again, with DM 1.429 billion (first half of 1996: DM 1.409 billion), the automotive business as a whole made the greatest contribution to the operating profit of the Daimler-Benz Group. Commercial Vehicles achieved an improvement in operating profit, which, however, still remained slightly negative. The favorable growth in Passenger Cars is to some extent balanced by increased advance expenditures for new product launches, which will generate additional income in the second half of this year. At DM 220 million (first half of 1996: DM 212 million), the Services division has increased its contribution to the operating profit. Posting an operating profit of DM 124 million (first half of 1996: minus DM 132 million), the directly-managed businesses also contributed to the overall improvement. This figure includes a one-time income of DM 200 million from the sale of the recognition and sorting system business, AEG Electrocom.

Double-digit revenue growth at all divisions -- 26 percent at Dasa

All four divisions were able to post double-digit increases in revenues during the first half of 1997. Revenues in Passenger Cars increased by 11% to DM 25 billion (first half of 1996: DM 22.4 billion). At the same time, Daimler-Benz sold a record 336,000 passenger cars, and the company expects to produce and sell more than 700,000 passenger cars in the course of 1997 -- more than ever before. Revenues in Commercial Vehicles rose by 16% to DM 17.8 billion (first half of 1996: DM 15.3 billion), and the production and unit sales of commercial vehicles will likewise set a new record of more than 400,000 in 1997. Aerospace revenues increased by 26% to DM 6.7 billion (first half of 1996: DM 5.3 billion). Revenues in the Services division increased by 18% to DM 7.2 billion (first half of 1996: DM 6.5 billion).

Daimler-Benz is the world's most comprehensive provider of technologically advanced transportation products, systems and services, and has 290,000 employees and revenues of approximately $70 billion. Daimler-Benz is focused on the development and manufacture of Mercedes-Benz cars and commercial vehicles, Freightliner trucks as well as rail systems, diesel engines and microelectronics. Daimler-Benz Aerospace builds aircraft and space systems and Daimler-Benz InterServices provides leasing and sales financing, mobile communications and information technologies. North America, where Daimler-Benz employs more than 19,000 people, is the largest regional market outside of Europe and accounts for approximately 20 percent of worldwide revenues. In 1993, Daimler-Benz became the first German company to list its stock on the New York Stock Exchange (symbol: DAI). -0-

                  Daimler-Benz in the first half year 1997


Daimler-Benz Group               1st Half   1st Half   Change
                                 Year 1997  Year 1996

Operating profit in DM million      1,849        827   +1,022
Revenues in DM billion               55.9       49.1      +14%
Foreign share of revenues             67%        63%      +4%age points
Net income in DM million              992        782     +210
Net income per DM 5
  share (EPS) in DM                  1.92       1.52    +0.40
Cash flow from Operating
  Activities in DM million          4,681      2,815      +66%
Employees (June 30, 1997)         291,025    288,152   +2,873
Employees outside Germany          69,102     66,249   +2,853

Operating Profit by Segments     1st Half   1st Half   Change
in DM million                    Year 1997  Year 1996

Automotive                          1,429      1,409      +20
Aerospace                              74       (677)    +751
Services                              220        212       +8
Directly managed businesses           134       (132)    +266

Revenues by Divisions            1st Half   1st Half   Change
in DM million                    Year 1997  Year 1996
unconsolidated revenues

Division Passenger Cars            24,980     22,409      +11%
 Sales (Units)                    335,794    318,063       +6%
Division Commercial Vehicles       17,846     15,346      +16%
 Sales (Units)                    191,994    168,376      +14%
Division Aerospace                  6,679      5,291      +26%
Division Services                   7,166      6,526      +18%
 change rate without debis
 Marketing Services (desinvested)
Directly managed businesses         3,145      3,138       +0%
 1st half year 1996 without Sorting
 and Recognition Systems (desinv.)

NOTE: To receive the Consolidated Interim Report and the speeches of Mr. Schrempp and Dr. Gentz, please call [phone].

CONTACT: Daimler-Benz AG, Corporate Communications 

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Daimler-Benz North America Corporation

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Bernhard Harling

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