Bjoern Scheib - Head of Investor Relations Bodo Uebber - Member of the Management Board, Head of Finance and Controlling, Daimler Financial Services Dieter Zetsche - CEO

José Asumendi - JPMorgan Patrick Hummel - UBS Tim Rokossa - Deutsche Bank Michael Tyndall - Citi Charles Winston - Redburn Partners Horst Schneider - HSBC Kristina Church - Barclays Sascha Gommel - Commerzbank Stephen Reitman - Société Générale

Welcome to the global conference call of Daimler. At the customer’s request, this conference will by recorded. The replay of the conference call will also be available an on-demand audio webcast in the investor relations sections of the Daimler website. The short introduction will be directly followed by Q&A session. [Operator Instructions] I would like to remind you that this teleconference is governed by the Safe Harbor wording that you find in our published results documents. Please note that our presentations contain forward-looking statements that reflect management’s current views with respect to future events. Such statements are subject to many risks and uncertainties. If the assumptions underlining any of these statements prove incorrect then actual results may be materially different from those expressed or implied by such statements. The forward-looking statements speak only to the date on which they are made. I now hand over to Bjoern Scheib, head of Daimler Investor Relations.

Good afternoon. This is Bjoern Scheib speaking. On behalf of Daimler, I would like to welcome you, both on the telephone and on the internet, to our Q2 results conference call. Today we are very happy to have with us our CEO, Dr. Dieter Zetsche, Dr. Wolfgang Bernhard and Bodo Uebber. In order to give you maximum time for your questions, we will begin with a short introduction directly followed by Q&A. Now I would like to hand over to Dr. Dieter Zetsche. Thank you.

Thank you, Bjoern, and good afternoon ladies and gentlemen. Last week, we already made our main message public. Daimler remains well on track. The adjusted second quarter EBIT exceeded market expectations in all our divisions. Today we released our detailed report, you have the numbers in front of you, so I’ll keep it brief before we look to the future. In the second quarter, we sold over 761,000 vehicles 7% more than the same period last year. Our revenue rose by 3% to EUR38.6 billion. Adjusted for special items, our EBIT rose by 6% to EUR4 billion. Group net profit was EUR2.5 billion, free cash flow of our industrial business came in at EUR2.1 billion in the first half. Net liquidity or industrial business stood at EUR17.4 billion at the end of June. Now let’s turn to the performance of our business units. Mercedes-Benz cars set yet another record in the second quarter with 547,000 sold vehicles. The same goes for the first half of the year. For the first time ever, we crossed the 1 million sales mark in just six months. At the same time, we slightly improved our already good pricing. In China, actually some of our vehicles are even traded above listed prices. In the second quarter sales were especially good in Western Europe, plus 13% and in China plus 29%. Our SUVs contributed to the growth with an increase of 41%, especially our GLC exceeded all expectations. As expected, we saw model lifecycle declines in S-Class and E-Class sales. Smart sales increased by 17% in the second quarter with the strongest growth in China. Adjusted for special items, our EBIT at Mercedes-Benz cars came in at EUR2.2 billion, the same level as the strong prior year quarter. This is all the more remarkable because we further increase investments in our future. Adjusted return on sales in Mercedes-Benz cars reached 10% in the second quarter. This proves once again that our strategic profitability targets are ambitious, but achievable. At Daimler Trucks, second quarter sales were 108,000 units, 13% below last year’s number. The main reasons were market slowdowns in the NAFTA regions, Latin America and Indonesia. In Europe, however our sales volumes increased by 13%. In addition, we continued to build on our global leadership. Our market share in the NAFTA region for example rose to 41% in the truck Classes 6 to 8. Adjusted EBIT came in at EUR661 million, adjusted return on sales of 7.6% below the level of the strong prior year. That shows, although we had to adapt our guidance for trucks due to market conditions, we are well positioned to grow profitably and are much better in managing the cycles. Mercedes-Benz vans increased its unit sales in the second quarter by 22% to a new record or nearly 100,000 vehicles. In particular, our new mid size segment was well received. Vito and V-Class together were up by 39%. Adjusted EBIT reached EUR462 million and therefore nearly doubled compared to the prior year quarter. Adjusted return on sales was a robust 13.4%. The main drivers here were good sales performances in Europe with plus 20% in the NAFTA region plus 13% and in China plus 122%. At Daimler Buses, unit sales decreased in the second quarter by 5% to 7000 buses and chassis. Adjusted EBIT stood at EUR89 million, which is 56% above the previous year. Adjusted return on sales were 7.9%. At Daimler Financial Services, new business rose by 4%. At the end of June, contract volume reached EUR120 billion. The return on equity reached 19.3% and exceeded again the strategic target of 17%. In sum, the development of earnings in our division show we are well positioned in all business units. Our long term oriented and systematically executed strategy continues to take hold that is more important than ever because in the next few years our company will change more than ever before. It’s not just about reinventing the car, it’s about re-inventing our entire company. We would therefore like to take this opportunity to discuss our short, medium and long term outlook briefly. I’ll begin with the remainder of the current year 2016. Our guidance remains unchanged; we expect to significantly increase group sales for the full year. At Mercedes-Benz cars we aim to continue on our growth path. In the fall, we’ll introduce two additional models to build on our successful C-platform, the C-Class Cabriolet and the GLC Coupé While SUVs will make their full market impact this year, we will also increase E-Class availability. As of this month, our E-Class Estate is available for purchase. In China, we continue to have every reason to be confident. This year we’ll bring 10 new models to this market. This fall for example, comes the popular long wheel based version of the new E-Class. At Daimler trucks, we expect a significant sales decline due to persistently difficult economic environment through 2016. But I need to emphasize that even with our updated guidance we expect our 2016 results to be among the best in our truck division. For buses we anticipate a slight decline in sales; however we expect to maintain the leading position in our core markets. The Mercedes-Benz vans on the other hand we plan to significantly increase sales, particularly in Europe we expect a strong growth. Additionally, we will further expand our presence in China. After the successful launch of the V-Class, the Vito will follow in the second half of the year. And Daimler Financial Services also expects to once again slightly increase its new business and contract volume. Based on these plans and our market expectations, we expect to slightly increase group revenue and our EBIT adjusted for special items this year. Thereby we expect our performance in the second half to be much better than in the first. Adjusted for special items we aim to achieve EBIT numbers for cars, buses and financial services that are slightly above prior year levels, meanwhile our truck division will likely be significantly below and our van division significantly above last year’s levels, in some current developments, Daimler are therefore clearly positive. Our confidence in the medium term outlook is based on two factors, strong demand for our products at increasing efficiency. At MBC, we currently have the youngest portfolio among our direct competitors. We want to maintain this position over the medium term, to do so we start by bringing 10 new or renewed models to the market next year. Trucks, we are working to build on our leading position in security, connectivity and efficiency. To strengthen our global presence we have opened six regional centers around the world in just seven months. We will once again prove our technology leadership at the commercial vehicle IAA in September. And Daimler Financial Service just announced to invest EUR1.1 billion in the purchase of Athlon. That strengthens our position in an important growth market, holistic fleet management. Through it all our company is getting more and more efficient, for instance developed and agreed on the target [indiscernible] for German plants by expanding our global protection network and strengthening the modular architecture of our vehicles. The result, a strong core business which enables us to make investments in our future. To drive our transformation we are also working to refine our corporate culture throughout the company. At the beginning of the year I informed you of our leadership 20:20 initiative. Meanwhile about 150 new ideas have emerged. They include for examples proposals to shorten decision path and to bring innovations with more speed to the market. 80% of those ideas immediately got the green light and are now in the execution phase. Our goal is clear, we aim to transform Daimler into an even quicker and more agile company. That brings me to our long term outlook. The major automotive trends. The future of our industry will be more and more autonomous, connected, shared and electric. Our company is already in an excellent position in all four areas. That’s true for our commercial vehicles as well as for our passenger cars. We are heavily investing in the connectivity of our cars and trucks with services such as Mercedes-Benz uptime for truck operators as well as with Mercedes Me for passenger car customers. In autonomous driving we demonstrate our leadership time and times again. On Monday, we introduced the worlds’ first partially autonomous bus. Today, we already have several hundred experts working to enhance the artificial intelligence for our vehicles. With car2go we lead our industry in car sharing. The future of the combination of autonomous driving and car sharing has tremendous potential. In the coming years we will massively accelerate the pace of transformation of our power trends from combustion to electric drive. Over the next two years we will invest EUR40.5 billion in the research and development at Daimler, the major part of which will flow into green technologies. At Auto show in Paris we will introduce electric concept car with a 500 kilometer range. There we will also have our new electric drive smart models on display. The launches begin at the end of the year. In addition, at Mercedes-Benz, we are working on a new architecture on all electric vehicle family. Electrification is also picking up in our commercial vehicles, more to come on that later this month and at the IAA in Hanover in September. It’s clear to us that this transformation must be approached holistically, for that reason we recently created a new unit at Mercedes-Benz cars to master the linking of these four strategic areas more consistently than all others in the future. All of this leaves me to say the following with confidence. For 2016, we confirm our guidance. In the medium term we are reinventing our company forging ahead step by step in order to preserve one thing in the long term sustainable and with attractive dividend. And now I look forward to your questions. Thank you.

Thank you very much Dieter. Ladies and gentlemen, you may ask your questions now. The operator as always will identify the question by name, but please also introduce yourself with your name and the name of the organization that you are representing. Two practical points please avoid using mobile phones as well as hands free speaking systems; second please also ask your question in English. Last but not the least, as a matter of fairness, please limit the amount of questions that you are about to raise to two to give everybody on this call the opportunity to ask questions. Now lets’ get started. Thank you.

[Operator Instructions] The first question is from the line of José Asumendi of JPMorgan. José Asumendi: Hey thanks, José JPMorgan. Couple of questions. The first one if you could comment, please, on Mercedes-Benz Cars, please on pricing power across the different regions, level of inventories as well as the investments we should be thinking about for the all-electric platform. The second question, please, for Dr. Zetsche. If you could please comment on your thoughts on the vertical integration you need in battery manufacturing in the longer term. When do you think you will be in a position to go back to cell manufacturing? And if you could please quantify how many gigawatt hour capacity do you plan to have in the short term, let's say 2017 and 2018. Thank you.

Thank you for your questions. First of all our level of inventories is good, rather to the low side especially of course on the cars which are very hot in the market. And this is true all over the world in all regions. As far as our electric architecture is concerned, so at that point of time we do not give specific indications about investments. It’s clear that as a tendency, electric vehicle platform requires somewhat less investment if you include the drive train. When we are talking about batteries and there specifically the cells, we said before that with the current technology. We do not see neither a connectively feasible opportunity, nor a need for any new investments from our side. When there will be the next technology, whatever it might be and this is like in 5 to 10 years, there might be another opportunity to go ahead but that is as I said at that time, basically a pure speculation. I think I skipped one question of your first part where you ask about pricing, the net pricing again globally had a slightly positive development over last year. Thank you. José Asumendi: Thank you.

The next question is from Patrick Hummel, UBS.

Yes. Good afternoon, gentlemen. Two questions, please. First one, on the trucks business, you delivered still a fairly healthy margin in the second quarter, but the order intake is still trending down quite meaningfully and now also in Europe. So, I was wondering in terms of profitability what we can reasonably expect for the second half of the year, if you can make any comments on that. And also given that we now have seen even a decline in European orders, is there any need for adjusting the cost base in Europe in the trucks division? That will be my first question. And the second question, very simple for Mr. Uebber. In terms of the currency and other cost effects in the second half, I mean you had a negative FX in the first quarter. It's now pretty much zero in the second quarter. Does that mean we should expect at least 0.5 billion of tailwinds in the second half of the year, if you could just give us an update on that as well as on the other cost line? Do we see further increases in the second half there as well? Thank you.

Thank you, Patrick for the question. I will start off with the truck business. As you see in our press release so far, we again are adjusting our market guidance for Brazil. We don't see that Brazil will turn for the better. For the rest of the year, we think that it will go down another 5% of our guidance. So, we think Brazil will be at a minus 35% compared to last year. So, this is the changes in market guidance. The other thing is that, as you said after the first quarter, we think that the NAFTA market will -- we think that the NAFTA market will go down this year by 15%, as the market has been going down 6% only for the start of this year, for the first half. We believe that the second half will be considerably lower and we also see that in our incoming orders, so incoming orders have been going down throughout the first half of the year and we will closely watch. For the third quarter now, whether -- the incoming orders will be picking up. Europe is developing quite robustly. We see that the market is growing and these effects will be showing through the second half of this year. So with continued work on the cost side of our business on the material costs, on productivity in our plans, on logistics costs, we see that the second half of the year, profitability will be slightly higher as compared to the first half. However, there are risks remaining with respect to NAFTA. So, we will see how this whole year will play out, but generally speaking, a lift through efficiency and cost measures combined with European lift that we will see will give us slightly higher EBIT in the second half compared to the first half. One more correction, Brazil is at minus 25% now, not minus 23%. With minus 25%, that’s our guidance for Brazil for the whole year.

Okay. Thank you.

Patrick, our guidance which we gave end of Q1 for currency is still valid for Daimler in total. We expect a slight tailwind for the whole year. The dynamics are almost also the same. The emerging markets currencies are a burden for the currency development and the matured markets like dollar but also China, the renminbi are trending in the right direction, so that is offsetting so to say the impact. Looking at the second half of course Mercedes-Benz Car Group will be positively affected by currencies. You saw in the first half, net negative of EUR250 million and of course that would -- the development of currency will positively impact the second half of the year. For the cost development, we had on the car group a negative development of EUR650 million for the first half. Please keep in mind it was also impacted by the interest rate development. Therefore, we need to discount the long-term provisioning. This impact was roughly EUR150 million. We do expect also for the second half, less of development, so a better position in the second half than in the first half for the car group.

Thank you very much.

The next question is from Tim Rokossa, Deutsche Bank.

Yes. Thank you very much. It’s Tim Rokossa, Deutsche Bank. I would like to touch on the long-term targets, Mr. Zetsche that you spoke about. Two questions on that. The first one is autonomous driving. You said that’s clearly a key trend. I think no one would disagree with that. I’m sure you’ve seen the announcement by BMW, Intel and Mobileye and the intention to make this an open platform. You’ve seemed to take an approach….

Sorry to interrupt you. Could you speak a little bit slower because the connection is pretty bad? I have a hard time to understand you. Thanks.

No problem. You seem to -- I’m sure you’ve seen the announcement by BMW, Mobileye and Intel and the intention to make EVs an open platform. Now, you seem to take the approach to develop a lot more in-house when it comes to autonomous driving and you are certainly very advanced when we look at the capabilities of your cars already on the road. Do you feel in the position to do more of this in-house, or do you feel invited by this corporation? And then the second question is just on electric cars. You mentioned the presentation of a full electric car in Paris in September. You previously spoke about electrifying your fleet on a continuous basis from now and I think you have a target of 10% electrified, electrification of you fleet by 2020 if I’m correct. Now, VW has obviously announced quite aggressive targets for their full year electric cars. Do you share the view that full EVs will come a lot quicker than most people currently project, or do you still believe in a continuous phasing with hybrids, primarily in the first place and then full EVs once the battery technology is more advanced as you spoke about earlier? Thank you.

Thank you for your questions. As far as autonomous driving is concerned, you were basically right with your assumptions. We have lot of in-house capability and as we think that is a technology, which will differentiate competition that is one of the focus where we concerned or concentrate and focus on in-house development. We see, as you said, as well our situation as a very strong one. The announcement of BMW, I don’t think I should comment much on. As far as I understand, it’s basically a supplier relationship with these two suppliers. As you know, we do cooperate as far as the year is concerned, together with Audi and BMW. And we think that makes a lot of sense to have a current platform on the autonomous side. As I said before, I think it’s more competitive development we try to reach. As far as electric cars are concerned, if you allow me I would like, not to go into too much details. We will do that very soon at the Paris Auto Show. But again, your assumption is right that we see the likelihood of a faster development and increase of the self electric vehicles growing relative to, for instance, the perspective one year ago. And of course, we are adjusting our planning and this feels like in some others, I think it’s very important that you get the right timing when you are too early it doesn’t help you and when you are too late, definitely neither. So the big $5,000 is when is the right timing and nobody can exactly forecast but as a tendency and as a trend, I think we have become more bullish in this regard and the consequences of that, we will inform most specifically very soon as I said. Thank you.

Thanks a lot.

The next question is from Michael Tyndall, Citi.

Hi there. It’s Mike Tyndall from Citi. Just one clarification if I may and then another question around investments. And this one I guess is for Bodo. Just when I look at the cash flow statement under the operating cash flow, there is another item of roughly EUR1.4 billion which I presume is the addition to provisions. But I just wonder if you could just talk us through what’s in that EUR1.4 billion numbers that’s coming through in Q2 in terms of cash flow. And then the second question is around investments, specifically your guidance on CapEx and R&D. I noticed that in your press release you no longer have the explicit number of EUR7 billion and EUR7.2 billion. Is there a reason for that because it feels like on the CapEx side you are running somewhat light versus your EUR7 billion guidance, EUR2.5 billion in the first half? Perhaps you could give me a bit more feel for how that will play out in terms of progression? Thanks.

With regard to your -- first of all, our cash flow for the first time, I’m very pleased with this number. The EUR2.1 billion is, I think it hits exactly to what our guidance for the total year for Daimler. The first half, as you know is impacted by a good operating performance on the one hand, somewhat less than last year. Last year, we had a fixed benefit in our cash flows. So this year, of course we want do another time. Of course, our investments and total funding has increased against last year, also the first half and that will speed up in the second half. So, we will spend more in CapEx in the second half than in the first half that’s last year. The EUR1.4 billion is related to the provisioning of Takata. As you know, these are -- this quarter roughly EUR500 million and of course the change we did in the wagon E front. So that is incorporated in total in the EUR1.4 billion. That’s it.

Thank you.

Thank you.

The next question is from Charles Winston, Redburn Partners.

Yes. Hi. It’s Charles. Thanks for taking my questions. One, sort of slightly short-term one and one adjusting your strategic points. Just on the short-term on, clearly you’ve under shipped in terms if I look at the wholesale sales to retail, both in the first and second quarter at Mercedes. Would it be fair to assume that the magnitude of under ship, in other words correcting the inventory in the channel, should we assume that will unwind fully in the year? In other words, we might even see sell-in so to speak, wholesales sales into the channel exceeding retail sales in the second half or perhaps it might just still one would equate to the other, any guidance would be very helpful? And then my second question really relates to your strategic comment, which you didn’t talk about the cycle at all. You didn’t really talk about expectations for the U.S. market, Europe, et cetera. Perhaps you could add that side of the equation. I mean, clearly a lot of people now getting quite cautious about the U.S. car market and some of the changes we are seeing in financing there but nevertheless, Europe still looking very robust indeed. Perhaps you could just sketch out your thoughts a little bit by region as to how the background market cycle fits into your strategic thinking, particularly I’m thinking here relates to Mercedes? Thank you.

Thank you very much to the first part of your question. We did not try to correct excess inventory in our sales organization, but we were producing at full capacity with re-ships throughout our entire system on a global basis. And on that basis, obviously as retail demand went beyond that with our decline of inventories. So for the second half, we plan to do the same with our production system and bringing out every single unit possible and again, how the inventory will develop, will therefore depend on retail sales but we are positive in our expectations in this regard. Of course, there is one aspect you have to consider, which means that the B-Class as passenger car, M2 vehicle is reported on our retail sales whereas as we are having this division within our group for Benz, the wholesale is reported on the Benz side and that of course explains some of the difference between these two numbers as well. As far as the markets are concerned, of course we have frequent updates together with our economists. Of course, we listen to everybody in the world and of course, we are reading newspapers everyday as well. So, we see that in the states, the SAAR numbers are declining somewhat. We see that the premium car market is even a little bit more affected by sudden slowdown and of course, we see as everybody does, there are very strong development of light trucks versus cars in U.S. market. None of that being specifically supportive for our sales but in spite of that, we have flat sales basically throughout the first half and with our now introduction in the last stage of June for the E-Class, we expect more opportunity in the second half in the States. Of course, we are benefitting from the strongest V market in U.S. and around the world. That’s why -- again, we are working totally at capacity throughout our systems. Europe, we overall see a very positive sales development so far. We know about Brexit. We know about Turkey. We know about all the questions, the terrorist attacks in France and so on, which are sadly none of that beyond the political and human tragedy are supported for positive market developments. But so far we cannot see any significant impacts on our sales. So, Europe continues to be a positive development for us, with very strong growth in the first half and expectation of a strong growth in the second half. And as the last important region, China, we continue to have a very strong development relative to market, relative to our competitors I could perhaps warn you a little bit that percentage growth in the third quarter will decline on the one hand because of very strong third quarter last year. And on the other hand because of the change over to the E-Class which is basically one of the two main pillars of volume in China. But in the fourth quarter we then again expect very impressive sales numbers, so you could be alerted to that by now already. That is what we plan or what we expect. So, all together, in the world, which sees perhaps the 3% increase of passenger car markets globally, we do believe that we will significantly outperform that growth in the second half as well.

Thank you.

The next question is from Horst Schneider, HSBC.

Yes. Hello. It's Horst here from HSBC. I have two questions left. First of all on the cash flow, maybe you can update us, what we should expect now for H2 in terms of cash flow related to the one-off. So, what is a cash outflow that we should expect for example, here for the cartel and cartel fines, for example? And second what strikes me in Q2, you had a positive impact from trade payables despite the inventories and the sales went up, which is unusual. So have you got a moment special working capital programs in place? And should we expect also going forward that we have sort of developments that trade payables tend to be a [Indiscernible] and hopefully inventories came down a little bit? And then the second question relates to this Athlon acquisition that you have announced few weeks ago. I just want to know how many cars do you sell on an annual basis at the moment to Athlon and what do you expect then to sale to Athlon in the future? Thank you.

Horst, thank you for your questions. First of all, in cash flow, free cash flow guidance is unchanged. As we have said, for this year we are between last year's number without special effect as we have last year two and this year's dividend. So, in between is our cash flow guidance, as you know, for this year that has not changed. Of course we have to consider the next three months that we have payout for the settlement with the authorities with regard to antitrust of course that we need to consider. But as I said before I'm very pleased with the cash flow development in the first half. Yes, you have fluctuations in working capital with regard to trade payables and so and so forth, but also expect us to do a very discipline management of inventories. As Dieter just have said just a minute ago that our inventories of the car side for example, are on very good level, the same holds to also for the truck business, of course there is nothing to complaint about. Therefore we start good – with the good position in to the second half. With regard to Athlon, I ask for your understanding, we are in closing right now, so please raise this question to the end of the year and that we will update you more about the Athlon acquisition.

And just regarding cash flow again but your guidance is on an ongoing basis. That is not including these cash flows related to one-offs, right?

Right, right.

Yes. Okay. Thank you.

The next question is from Kristina Church, Barclays.

Yes. Thank you. Kristina Church here. I've got a question that follows on from Tim's question earlier on the future trend. And just what you see as opportunities versus threats in the changes in future mobility. If we look at the valuation that the market is willing to ascribe, say to Tesla [ph] and some of that trends for the future. Does that market threat to the premium end of the market or do you think that the investments that you've been making and we'll continue to make will highlight the differences there. And then in terms of as we move towards more electric vehicles, as you're talking about penetration rates rising just more quickly than you saw year ago. What do you see the balance of power there between yourselves and your supplier partners? Are you trying to keep more technology in-house or will you continue to use, need as much support from the suppliers on an electric powertrain as you would do in combustion engine powertrain? Thank you.

Thank you very much for your questions. First of all, all of these developments which are very much technology driven, mostly based on digitization, ultimately leads to better offerings to customers. And in this regards my first approach is that all of these are opportunities if you can give your customer got a products that's definitely an opportunity. Now, of course you have to use these technologies to the better end of the customer and you have to make sure that you do that in a faster way, in a better way than your competitors. And when you do that the future is bright. And that's why we focus so much on autonomous driving on connectivity, on sharing as well and on electricity, electrification as we have discussed before. And probably the combination of these four developments is what nobody can exactly foresee today, but we're probably the most potential rely, that all of that as I said before is connected with threat as well when you sit still and sleep is obvious but that's definitely not our plan. But not to extend to much that, that's why we are so much working on cultural side and our company as well, because you need to some extend a different mindset to grab these new opportunities which go beyond developing the best car in the world which was our task since ever and which we will continue to see our targets if you want our traditional site. To your second question, I don't see that in the first part as a question of balance of power. Today, we have about two-thirds or more of our value-added outside and this doesn't put us in that position or in an inferior position versus suppliers, but they appreciate our business. And going forward I definitely see in the electrical vehicle an opportunity of further reducing your vertical integration and thereby becoming more agile and less [Indiscernible] as an industry and particularly for Mercedes, that's definitely our objectives, so we see that as another opportunity for our overall development as a company. Thank you.

The next question is from Sascha Gommel, Commerzbank.

Yes. Good afternoon. Thank you for taking my question. So first one would be on trucks. In the second quarter we saw quite some destocking when I compared the retail to the wholesales. I was just wondering if that's a level you sort of comfortable now or should we expect further destocking for the rest of the year, because when I look to the historic numbers it is a quite unusual figure for the second quarter. And then my second question would be on the mix for the second half and for next year, maybe you can share your view how you see your mix developing considering that the E-Class volume should kick in, while the S-Class is coming down somewhat? Thank you.

In terms of stocks of our business – in the truck we were quite happy with the stock levels that we have achieved especially in United States with roughly two to three months of sales in wholesale and retail stocks, we're okay. We don't expect further destocking there. We're okay. Same applies to Europe. There is not much change to be expected. Regarding the mix on the pass car side, as you assumed of course introduction of new generation E-Class has a positive impacts on mix. There's a slight but which is that China is a very important market for the E-Class, and of course China means with local production that we have basically half of the business in our hands like everybody else who is active in China. But still, clearly it has positive impact on our mix. When we look to the next year all together we should see that of course the search of SUVs generally spoken, not all to the same extend have a positive impact on the mix as well. On the other hand we have other vehicle lines at a high end, which are progressing in their life cycle till the next face lift the S-Class being the main one there. So, overall I would say that mix will have – has a tendency of positive development, but not the different quality.

Thank you very much.

The next question is from Stephen Reitman, Société Générale.

Yes. Good afternoon. Two questions please. On China, quite an impressive improvement in results from BBAC in the second quarter, I think you stop production of the E-Class in the month of June. Do you expect that the result, there will some pressure on the results in the third quarter for change over costs on BBAC? And when do you expect then to be seeing a recovery in the results of BBAC. Will we have to wait for 2017 for that to come through? And secondly, you talked about Brexit. You talked about that you've seen no significant impact. Can you give a bit more detail on that? Would you at the dealer level, the levels of cancellations have been insignificant?

There are E-Class in China. It had already started in production. And after the accumulation of some stock will be launched in the market in the beginning of next quarter, and therefore the main impact in the third quarter will be lack of supply for the E-Class, of course, but not that much of change over costs. And therefore we don't see a long recovery phase, first of all, because you don't see a drop, significant drop and therefore not recovery. All together the volume goes up and therefore we expect very positive development for BBAC which is already very satisfactory -- satisfying levels by now. Brexit, I mean, we all can speculate on the futures, so I only can talk about the presence. And as far as the presence is concern we have no change in our sales numbers in Great Britain on one hand or in the remaining Europe on the other hand versus our planning. All together we exceeded our planning in Europe so far and we do not see any indication of a change yet. Other than that we only can watch the market very closely. And if we were to see any development of course we would have to adapt and react. But as the demand is pretty good on global basis, they are always some opportunities of reallocating product as well.

Thank you.

Thank you. The next question – I'm sorry, we have no further questions.

Okay. Ladies and gentlemen, thank you very much for your questions and being with us today. Also thank you very much to the Daimler management for answering all these questions from your side. A friendly reminder, as you know and you got already invitation for China Capital Market Day on September 6th and 7th in Beijing. We would kindly remind you to send in your confirmation because the application for the Visas is already starting. Now Investor Relations will remain at your disposals to answer any remaining open questions that you may have. Also to all of you listening on the internet, have a great afternoon, great morning, or a great evening wherever you located. Look forward to see you soon be it in China or somewhere. Thank you. Bye-bye.

Ladies and gentlemen, thank you for attendance. This call has been concluded. You may now disconnect.