Daimler-Benz announces half-year operating profit of DM 827 million; Positive earnings trend expected to continue in second half of 1996; Schrempp: "a positive first phase, but we want to be in the front ranks of the world's most profitable corporations ".

LONDON/STUTTGART--(BUSINESS WIRE)--Aug. 29, 1996--In the first half of 1996, Daimler-Benz generated an operating profit of DM 827 million (1st half 1995: DM -613 million). The company expects the positive trend to continue in the second half of 1996. Operating profit was for the first time calculated in accordance with U.S. GAAP.

"We're pleased that the tough steps we took last year are turning Daimler-Benz into a company focused on achieving world class profitability," noted Board of Management Chairman Juergen E. Schrempp at a press conference held in London today to report the Group's interim results. "We're not there yet, but we are on the right path towards a total renewal of our company's creative energies and profit performance."

The Group's interim report for January to June 1996 shows a consolidated net income in accordance with U.S. GAAP of DM 782 million. This represents a positive swing of DM 2.4 billion over the first six months of last year. Comparable consolidated sales revenues rose by approximately 9% to DM 49.1 billion during the period under review.

"By reducing the group from 35 to 25 highly focused business units, we are already a leaner, more productive and more profitable company. Nevertheless, overall profitability is not near where it must be," said Schrempp. "The task for the Daimler-Benz Board of Management now is to promote a continuous process of growth and long-term profitability in all business units of the group, and move into the front ranks of the world's most profitable corporations."

"The next priority is to find solutions for underperforming businesses in the portfolio," Schrempp said. "Plans are well under way to address those areas to ensure future profitability," Schrempp emphasized. "The board of management will develop the group through growth in the existing business units. We will only take new activities on board if they promise healthy returns and if they fit the group strategy," said the Daimler-Benz chief in London.

Statements prepared in accordance with U.S. accounting standards

The Daimler-Benz interim report for the first six months of 1996 was for the first time prepared exclusively in accordance with U.S. accounting standards. "This means Daimler-Benz can provide investors and the world capital markets with statements which are transparent, comply with international standards and allow direct comparison with companies all over the world," said Dr. Manfred Gentz, Chief Financial Officer of Daimler-Benz, commenting on the interim report at the press conference in London.

Daimler-Benz's external reporting now uses a figure, the operating profit, which in the future will also be one of the internal controlling yardsticks for the business units of the group. The return on capital employed, the yardstick applied to all individual business units - a minimum return on capital employed of 12% for each business unit is required - is calculated as the quotient of operating profit and capital employed.

Mercedes-Benz: Record Unit Sales and Sales Revenues in the Passenger Car Division

Mercedes-Benz demonstrated strong results during the first half of 1996 fueled by strong passenger car sales on all major markets, increasing productivity and continued reductions in costs, reflected most recently by the launch of the E-class. The Passenger Car division achieved new unit sales and sales revenues records. In the Commercial Vehicle division, the picture was more mixed: while van business performed very well and the North American truck activities showed further gains, European truck business was affected by depressed market conditions and the discontinuation of the heavy-duty series.

The productivity improvement programs already underway will therefore be rigorously continued. Mercedes-Benz contributed DM 1.4 billion (+3%) to the operating profit for the first half of the year. During the first six months of 1996, its sales revenues increased by 6% to DM 37.8 billion.

Dasa: Operating Profit Remains Negative, Despite DM 1 Billion Improvement

At Daimler-Benz Aerospace (Dasa), the streamlining of the portfolio, cost-cutting measures and the competitiveness-improvement initiative resulted in a significant reduction of the operating losses. Spurred also by a more favourable foreign exchange environment, the operating profit improved by almost DM 1 billion. Nevertheless, the figure of DM -0.7 billion remains substantially negative and the cost-cutting programmes must be vigorously continued. Comparable sales revenues for the first half of 1996 increased by 9% to DM 5.3 billion.

Increased Operating Profit and Continued Dynamic Growth at debis

Daimler-Benz InterServices (debis) improved its results for the first half of the year in its Systemhaus, Financial Services and Mobile Communication Services divisions, significantly increasing its operating profit from DM 156 million to DM 212 million. At the same time, the company continued its dynamic growth; the period January to June 1996 saw sales revenues grow by 21% to DM 6.5 billion.

Directly Reporting Businesses

The directly reporting businesses Rail Systems (joint venture ABB Daimler-Benz Transportation, ADtranz), Recognition and Sorting Systems and Diesel Engines made a significant positive contribution to operating profit, while Microelectronics showed a loss. Those former AEG companies which are still represented in the statements for the first half of the year and which still rank as `directly reporting businesses' also recorded a negative operating profit, so that the overall figure for the period totalled DM -132 million.

CONTACT: Daimler-Benz AG

Roland Klein, 011-49-711-17-93635

Eckhard Zanger, 011-49-711-17-93311

or

Daimler-Benz North America

Bernhard Harling, 212/909-9717

To receive a copy of the Consolidated Interim Report

and the speeches of Mr. Schrempp and Dr. Gentz, please

call 212/909-9716