Björn Scheib - Vice President, Head of Investor Relations Dieter Zetsche - Chairman, Head of Mercedes-Benz Passenger Cars Bodo Uebber - Chief Financial Officer, Finance and Controlling, Daimler Financial Services Martin Daum - Daimler Trucks and Buses

Tim Rokossa - Deutsche Bank Patrick Hummel - UBS Jose Asumendi - J.P. Morgan Securities Ltd. Stephen Reitman - Societe Generale Horst Schneider - HSBC Trinkaus & Burkhardt AG Harald Hendrikse - Morgan Stanley Michael Raab - Kepler Chevreux Tom Thorpe - Evercore ISI Jürgen Pieper - B. Metzler Max Warburton - Sanford C. Bernstein Georges Dieng - Natixis Securities Adam Hull - MainFirst Bank AG Stefan Burgstaller - Goldman Sachs International Björn Scheib: So good morning, ladies and gentlemen. This is Björn Scheib speaking. On behalf of Daimler, I would like to welcome you all here in Stuttgart, as well as on the Internet here to our full year 2017 Investors and Analysts conference. We are very happy to have with us today Dr. Dieter Zetsche, the Chairman of the Board of Management and the Head of Mercedes-Benz Passenger Cars; our CFO, Bodo Uebber, Member of the Board of Management responsible for Finance & Controlling and the Daimler Financial Services. I also welcome very much Martin Daum, Member of the Board of Management responsible for the Daimler Trucks and Buses. Yesterday, at the annual press conference, Dieter Zetsche and Bodo Uebber presented our financial figures for 2017 as well as the strategy in details. All relevant materials and respective presentations can be found on the Daimler Web site. In order to give you maximum time for your questions on our today's conference, Dieter Zetsche will begin with a short introduction, directly followed by a Q&A session, where Bodo and Martin will also be available to answer your questions. Having said this, I would like to remind you that this investor's conference is governed by the Safe Harbor wording that you can find on any of our published documents. Please note that all our presentation contains forward-looking statements that reflect management's current view with respect for future events. Such statements are subject to many risks and uncertainties. If the assumptions underlying any of these statements prove 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. Please be aware that this conference will be broadcasted, recorded and then will be available for reply on our Web site. And last but not least, please switch-off your mobile phones and with this, I would love now to pass over to [Indiscernible].

Thank you, very much and good morning, ladies and gentlemen. And welcome to our analyst and investor conference. I know you’ve already gone through our numbers in detail so to start off I would simply view the major highlights. Mercedes-Benz Car remains on a profitable growth course. In 2017, we sold nearly 2.4 million cars, an increase of 8% over the prior year. The biggest contributors to our growth were on the E-Class and SUVs. The second half of the year the new S-Class provided additional sales momentum. In 2017, Mercedes-Benz Car once again not only sold more cars than our direct competitors, we also grew stronger. On the retail basis, it was an increase of 10%. That means we continue to build on our leaderships in the premium segment. To be specific we are 10% and more than 20% respectively ahead of our two main competitors. One key reason for this is our success in China. Mercedes-Benz sales there grew by 28% to 595,000 vehicles. Mercedes-Benz Cars EBIT increased to €9.2 billion, that is 13% more than last year. Our return on sales reached 9.7%. Daimler Trucks sales amounted to 471,000 trucks in 2017. With little support from the markets that is a remarkable result. We are able to affirm or build on our strong market position in almost all markets. We are also able to raise Daimler Trucks EBIT to €2.4 billion. With efficiency measures, we’ve introduced, particularly at Mercedes-Benz Trucks, there is a good chance to achieve our target level also in terms of profitability. Mercedes-Benz Vans, the year was marked by continued strong growth with 12% increase in sales, we surpassed the threshold of 400,000 units. At €1.2 billion, EBIT was nearly exactly at the prior year level. In 2017, we also showed in real terms how we envisioned changing from a van manufacturer to system solution provider. This range is from ride sharing to new delivery models with transporters and drones. At Daimler Buses, business developments were shaped by an improved economic situation in Latin America. In total, we sold 28,700 buses and chassis last year, 9% more than 2016. The operating start of €242 million was at the same high level as in the prior year. Daimler Financial Services had another very good year. New business climbed by 14% to €70.7 billion, and contract volumes rose by 6% to nearly €140 billion. This lead to an earnings of €2 billion and a return on equity of 17.6%. Mobility Services also belongs to DFS core business. Today, we have an entire portfolio of digital services, nearly 80 million people in more than 100 cities worldwide already use these Daimler services. Compared to prior year, the number of customers doubled. And we continue to build on this leadership position. This brings me to the key figures of the financial year. Revenue increased to $164.3 billion in 2017, group EBIT reached €14.7 billion. At 40%, profit increased twice as fast as revenue. So we have grown very profitably. At 9% return on sales, we achieved our target profitability in our automotive business. Free cash flow from our industrial business fell to €2 billion compared to the prior year. This was due to the fact that we contributed €3 billion to the German pension plan assets of Daimler AG as part of an extraordinary allocation. Without this effect, free cash flow would have increased despite the much higher investments we had made in the brands and new products and technologies. Net profit came to $10.9 billion or €9.84 per share. On this basis, we will propose to the Annual General Meeting that the dividend be raised to €3.65 per share. This would allow us to distribute a total of €3.9 billion to our shareholders. This is a dividend yield of roughly 5%. In the current interest rate environment, that is a very attractive rate. Our 2017 results show our Company is fundamentally healthy and highly profitable. But that’s no reason to stand still, we are driving change in all areas at Daimler. We’re changing to stay what we are; number one in auto mobility. In doing so, we are relying on four closely linked strategic building blocks that result in a whole. We all call it our four C approach. First, C is core business. The focus on our core business is the foundation of our current success. Its Daimler’s economic backbone. That’s why we’ll continue to strengthen it. Above all, we're investing in new products. In January, for example, deliveries for the new versions of the S-Class coupe and cabriolet began. And the new CLS will be launched in March. Just over two weeks ago, we unveiled the new addition of the Mercedes icon in Detroit, the new G-Class. And this very day, we will present our new A-Class in Amsterdam. In total, we will introduce more than a dozen new passenger car models in 2018. We’re using the technological knowhow and profitability of our core business to tackle the big issues facing the future of our industry in a big way. We define them with the term CASE. As the second C is about nothing less than the reinvention of individual mobility. One example is our commitment to autonomous driving. Step-by-step, we have been introducing automated driving functions into our production cars. This allows customers to gain increasing confidence in these technologies. At the same time, we are working on level 5 autonomous driving fleets from metropolitan regions. As the trend to product organization continues to grow, so does demand for convenient individual mobility services, that is exactly what we are highly motivated to provide. We know we are not alone. The entire industry is talking about robo-taxis right now. But to create such an ecosystem, one must first master several things. It starts with the technology in the car and software platforms and extents to smart feed management and financing. We’ve put ourselves in an excellent position in all these fields over the past few years. In the early 2020s, we aim to put the first self driving taxis on the road. The pace is also fast in the topic of electric mobility. Over the next few years, we will invest more than €10 billion in the expansion of our electric fleet. By 2022, we will electrify the entire Mercedes portfolio. We will offer at least 50 variants of electrified vehicles. By 2020, we will transform smart into the first car brand in Europe and the U.S. to completely switch to electric. We are also electrifying our vans, trucks and buses with the same determination and rapid pace. All of this goes to show with already flip the switch in the direction of a key mobility some time ago, and we have much more to come. At the same time, we are also reinventing ourselves at Daimler. For this reason, we’re further developing our corporate culture; culture’s C, number three, and we want the entrepreneurial’s bridge, we are promoting to be reflected in the fourth C, our company structure; of course the inner mindset and the outward organization should complement each other. We therefore plan to run transform our divisions into legally independent units, which will improve both transparency and accountability for all three divisions and provide us with more flexibility, moving forward. We are convinced giving more responsibility and a broader scope for action to our divisions will make us more agile and allow us to work with an even sharper focus with the specific needs of each respective customers. Our divisions will be able to adapt quickly for industry-specific market developments. In addition, the plan structure support our ability to incorporate with new parties. The next few months will be marked by a thorough and careful examination of the economic, fiscal and organizational implications of the envisage new structure. If the results of these studies are positive, the Board of Management and its advisory of board will give the go-ahead for the reorganization in the course of this year. The new structure would have to be approved by our shareholders with majority of at least 75% at the Annual General Meeting in the spring of 2019. Considering the extent and complexity of the project, we are well on schedule. Core, case, culture and company structure, these are the four fundamental components of our future strategy, but one C is still missing, our customer. The customer is at the center of it all. After all, we can only be as successful in the future as our products and services on the market. What benefits our customers is also good for our employees, business partners and shareholders. So much for the outlook. Now, what does all of this mean for our expectations and guidance for the year 2018? This year, the global economy could develop in a similarly favorable manner as it did in 2017. We expect growth of well over 3%. Global passenger car demand is expected to slightly increase. Truck demand overall is likely to significantly increase in the region’s most relevant to us. For vans and buses, we also expect positive market momentum. We want to slightly increase our car sales in 2018 and thereby achieve another record. Trucks, vans and buses aim to significantly grow. Financial Services are also aiming for further growth. On this basis, we expect the following results from our individual business units. Cars, at the same level of the prior year; Trucks, significantly above the level of the prior year; Vans, slightly below the level of the prior year; Buses, significantly above the level of the prior year; Financial Services, at the same level of prior year. Taking together, in 2018, we expect to achieve group EBIT and the magnitude of the prior year. Daimler is and will remain an attractive investment. We offer strong balance sheet, comprehensive strategy and perspective flexible structure. We are confident we will achieve further profitable growth. And given our effective dividend policy, we are confident investors will appreciate the valuation potential of Daimler. In recent years, we have fulfilled our promises, we have delivered. And now we are designing and building our future. We are doing so from a position of strength. With that, ladies and gentlemen, I appreciate your attention and welcome your questions. Thank you. A - Björn Scheib: Thank you, Dieter for products and detail. A few practical points for our Q&A session before we start. Before asking your question, please identify yourself with your name and the name of the organization that you’re representing. Understood. Please ask your question in English and as a matter of fairness, I repeat this every time. Please limit your amount of questions that you are about to raise to a maximum of two in order to give everybody in this conference the opportunity to ask their relevant questions. With this, now we’re going to start and we’ll start with Tim.

Tim from Deutsche Bank. I will have two questions, one is on R&D and CapEx spending and one is on trucks. Last night, we had a chance to see that you are probably the most advanced when it comes to mobility services among your peers. You also spoke about electrifying the portfolio. All that obviously costs money, you’re also guiding for R&D and CapEx spending to up again. Will there be a period of time where those ratios will start to come down again in the future, or given that emission standards are always continuing to tighten, will we just always continue to spend a bit more? And so now on trucks, your previous home market North America is probably running very well this year, Europe is still fairly stable, Brazil is finally coming back, you have your cost cutting program in place. Is there a reason why you shouldn’t achieve your mid-term margin this year already? Thank you.

Typically, you always see your R&D spending and your investments going down in the future, mostly because you don’t know what you will be do then. Having said that, we think it’s very realistic to believe that we can cap our R&D and investment at high levels and at the same time, continue to grow, thereby take our R&D ratio down again. I think that is a very realistic perspective.

And you’re absolutely right describing the general overall situation on the truck side. It’s indeed all of the bus, and the North American market is doing extremely well. Our programs we started in 2017 are going very, very, well, so we’ll have this year a much better fixed cost base than we had in the years before. And yes, Brazil comes out of the tank or will most likely come out of the tank in 2018. So given all of the above, that leads to significant better results than the prior year. And whatever the final number is significantly better means, it will be a higher number than it was in 2017. And it's very early in the year, so a little bit further down through year and we have ample opportunity to meet where it might confirm the higher number.

Patrick Hummel, UBS. Good morning everybody. My first question relates to the mobility service business, and I'm not going to ask now about car to go and drive now, but what I would be interested in for the other activities that you are the sole owner. Will you consider these assets also for potential candidates for partnership with other, i.e. it's clear and more important or is the edge that you have built, because you are certainly one of the leading OEMs in that area of mobility services. Is that more important to you? Leadership and exclusivity or partnership and scale. And my second question, I would appreciate a bit more color on the passenger car division, you’re guiding for flat EBIT on the positive side, you have the slight volume growth but you have a very big, 1 billion headwind on the FX side, commodities is another couple of 100 million headwind and R&D as mentioned is also going to go up. Can you help us with the other positive drivers price mix what you see or other cost changes that would help offsetting that pressure and would yield flat EBIT for the year in passenger cars? Thank you.

Just very generally on your first point. Of course in this mobility services scale is a very important element. And there are more significantly positioned in the market is the more likely we will gain new customers. And therefore, number one priority is to continue the very positive development in this regard of the recent past. To the extent we can do that on our own, we’ll do it on our own to the extent it would be more promising to do it in any partnership, we would go for that road. So it's not a value in its own to be the singular shareholder of this kind of activity. As far as cars is concerned, first of all, we see ongoing tremendous demand for our cars. You will see in very few days from today an excellent start into the year with January. And we have to face the fact that this year, which is on the one hand very good, we start to launch the next generation of the very, very successful compact car family, which in its last full-year have continued to run on the various times increase capacity limit. There are changeover automatically or necessarily leads to some restrictions there in the capacity. We are adding capacity with new plans but in this changeover, we have some constraints as far as capacity is concerned. Having said that, we will see sales growth in this year, and we see health restructure. We have seen in the past years, continuously either positive pricing or at least flat pricing with rather chance of some positive pricing, especially having said that, we're running at capacity with basically all of our products. We’ll continue to work diligently on our productivity in all value adding areas of the business. Of course, we are aware of the headwinds you were talking about. And therefore, we think as well that’s our target and we feel confident as in past years that we’ll deliver on our target to keep their profits or the results flat is an ambitious one but we’re committed to it.

Thank you. Jose, J. P. Morgan, just two items please. The first one for Martin on trucks. Can you share with us a little bit how far have you reduced the fixed cost base in Europe and how far can you go reaching the fixed cost base in 2018. And then with regards to the U.S., how much more capacity can you put or production can you add in Saltillo to support the 1.4 book to bill ratio, you have in the U.S. And if you can speak a little bit about the orders you’re seeing from competitors in terms of the semi-trucks in Tesla that will be the first point. Second point for Dieter please. On battery technology and I think for me at least the concern that I have around not seeing a major German champion on the battery front being able to produce cells. What are your thoughts with regards to this element and how do you think about solid state battery technology. It sounds like some suppliers are going to develop solid state battery technology, sounds they want to have start production by 2024. Do you consider this an interesting technology you would like to change to? Love to hear your thoughts there. Thank you.

Jose, that was a pretty trick question, I have one question and you put an A, B, C into it. So potentially the easiest one is about the production capacity and this is true for I would say for all, would be true for all regions. But especially for NAFTA we have extremely flexible production. So we can ramp up as the market demands it and at Saltillo plan, it will be our North American U.S. plants as well as. So I'm absolutely not concerned about at the moment about production capacity. There is certainly the sky not the limit, but the sky is pretty high. So I'm not concerned about that. Fixed cost wise we have -- we want to save significant amount of money. So we spend a considerable amount of one-time costs this year to reduce our -- last year certainly '17 to reduce it, so we wanted money back. And so I see it several hundred million euros annual as saving we see it and already a significant amount of that will be impacted our this year 2018’s results already. We will send the full effect in 2019 as we then realize the employee and personal measures, which are associated with that. The last one with Tesla, we’ll take all our competitors serious. But I have -- we are neither arrogant nor afraid of anything. And I can only point out that we launched last year with the E-Thunder, the first truck out of sales production which is a huge step further than just putting a prototype on the stage. We will have several launches with the Mercedes brands and the bus and truck side this year. So I have absolutely no doubt that in the game of the electrified trucks and buses, we will play a significant role.

As far as sales are concerned, you know that we have decent insight in this topic as we were -- very few wins where that are involved in cell production and cell development themselves. On the one hand, the current technology has evolved quite positively in the sense of cost down and performance up. Of course, like in any technology or most technologies you have kind of an S-curve and this development is flattening out. So we are all hoping for and expecting the next technology to take us further. There is no final breakthrough and no clear evidence which one of potential different technologies will be the one. Probably, the majority would have to bet money on that at that point of time, would go for solid state but that is not a safe bet. And the expectation is that sometime around 2025, we might see beginning of production of availability of the next technology, but not even knowing today which one it is obviously that is not a safe bet either. The good thing is that we are not involved in the production of these cells. Yes, we do research as well there and theoretically we might come to this breakthrough how likely that ever might be, but it’s very good at that point of time to have the flexibility to react depending on where technology takes us and that’s exactly what we will do. We know that beyond the technological and financial considerations, there’s another one which is some mandates like in China where you only can use white-listed batteries, which means they are produced in China. So there are further considerations we have to make and therefore it’s even better and even more important that you can adjust to whatever the demands there are and certainly not have a disadvantage to anyone else in this regard. Björn Scheib: So next one then Stephen, and after Stephen is Horst.

Stephen Reitman, Societe Generale in London. The question to Mr. Daum. You said before that when it comes to benchmarking, you can actually of course benchmark internally and I think you told your North American operations as sort of benchmark operations within the truck division. What lessons can be learned from that in the operations outside America and how easily are they absorbed and how welcome you find teams as to take these on board?

It’s like in any other part of the automotive, you need absolutely exciting products where the customers happily separates from his money to get your product, you have to have continuous work on your variable costs. So your margins on are not negatively impacted and then you have to run a lean operation with low fixed cost, so it’s that easy and that attitude we have all areas of the world and that’s job of the management team to make sure that this attitude bears its fruits over the years. So we are working heavily on that.

Perhaps Martin is not best positioned to qualify it in a way I would do it. It’s very simple task, has been fulfilled the best in North America within our operations and he has some insights to how that has happened, it’s certainly not harmful to apply the same knowledge two of Europe and Asia, and that’s exactly what we are doing.

It’s Horst from HSBC. I have got many questions on Mercedes cars. First of all, on Mercedes EBIT, when I see for 2017 this other cost change amount of minus 1 billion and I see your statements for 2018, I get the feeling that we maybe should expect minus 500 million of the cost changes in 2018, just due to rate rises, raw material prices increases, higher R&D. But I cannot assess what are the efficiency gains that you might be booking. So little bit more color on other cost changes, what we should expect for 2018 would be helpful. In that context also when you say that you are constrained in terms of capacity, and if we see that volumes outside China probably grow less and probably more flattish. Is it fair to assume that the impact from volume structure net pricing will be rather flattish in 2018? And then the last question that relate also to pricing is, I realized more and more that BMW and Audi they get annoyed about your good performance. So therefore BMW says they want to catch up with you until 2020. My concern is that we see on the back of that a tougher pricing in the premium market just because TSA pay more attention to market share. Would you share this view and if not why you’re not concerned about that and how important is market share for you in particular?

Cost changes, we have told you that we plan to increase our R&D spending again in 2018 over 2017. We have a year with significant additional content into the vehicles based on CO2 improvements which we need, mostly based on that and on the raw material side we rather see a flat situation in 2018. Let’s leave FX effect outside of that consideration. And we are very, very determined to continue the strong improvements on the operational side in the sense of productivity and efficiency. So that overall we will have another significant three digit million number in at least three digit million number on the other cost changes, in the higher range there are up to altogether perhaps a billion. So this is part of our plan. We, as I said, are so much faced with demand for our products that there is not that much uncertainty. Of course, tomorrow the world can fall apart but to high extent certainly in the first month, which you already know our volume development is defined by our capacity and therefore there is not that much risk to it. But again as I said before for the very same reason, we feel good on the pricing side you see what kind of growth we have shown in recent years. And as I told you if the pricing was positive or at least flat, which I think proves very clearly that we have not bought market share but with that we have offered attractive product, which is our customers or customers’ of our competitors wanted to buy. And that's exactly the path we will follow. So we will not to do anything stupid there in order to get market share. For instance you see last year for 11 months we have been number one in China that of course was due to the problems Audi had in the beginning of the year with its dealer body, but we by no means try to do any stupid ways to keep that position in December because we just don’t care. It’s for us important that in the long run we solidify and continue the appeal our products have to the customers but what that means in the single market and the single year in terms of market share number one or number two, there we don’t care. Fortunately, our sales people do care and try to become number one in all the markets they have a real strong fighting spirit, but they have limited batches. That's what they are working with. So again, all these things you mentioned are part of our planning for this year and what we want to accomplish at the end we told you was flat EBIT, which at that level again I think in this environment and with all this investments and with the future, there is pretty decent performance. Björn Scheib: So next is Harald and after then Michael.

It’s Harald at Morgan Stanley. A few questions, one can we go back to the battery sell question, because it's not just the technology but it seems to me you’re reliant on the suppliers to make sure that the capacity is going to be available. And I know in the past you said you’d rather buy and I think that makes a huge amount of sense. On the other hand, I don’t think it's very likely that you’re going to buy all your batteries from China or Korea. And it seems zero evidence that anybody is investing a significant amount of money in German battery manufacturing. Can you maybe explain why that is? And also maybe is there a risk that the industry is going to be forced to put money into this because obviously it's a very heavy capital commitment, you’re asking your suppliers to make. It feels like that these decisions don’t get make quite through and you might have to become more involved yourself. And then secondly not the favorite question I'm sure, but your comments on diesel this week. It’s pretty clear the industry doesn’t have much stomach for a hardware fix. On the other hand, we have a huge number of cars in the road that clearly are causing a pollution problem that the courts need to fix, and we don’t want a ban. So if we don’t want a ban, we don’t want a hardware fix, I mean what other solutions are there and maybe can you give us a little bit of context there because it's pretty obvious that the industry has some responsibility there.

Starting with batteries, we were in a situation where there was significant amount of unused battery cell capacity which of course has an impact on pricing. We are not in that situation anymore. At least, looking forward to the orders which are being placed now for the years to come which in it-self of course has an impact on pricing again. At that point of time, I do not foresee any kind of shortage and the company’s were engaged in that business are continuing to invest. Of course, scale is an important aspect in this regard as well and in their existing technology as you said, the likelihood that new players would start the game is not high. And therefore, the game might become different if there were breakthrough in the technology but there is no speculation there, so lot of if's and that. But as I said before, assuming that would there be a fantastic new technology and would be found in whatever in some place in Germany and someone would build huge capacity to provide this fantastic cells, we would continue to sell Chinese produced cells in China because that’s just the mandate. So it’s not just the market and the technology that’s playing here. Beyond all the other news which are filling the paper every day, you have perhaps seen as well that there number one positioned in this pollution discussions is held by Stuttgart at the famous Neckartor. At the Neckartor, we have seen declining NOx and particular values for years and in the last year compared to allowed number of please don’t nail me on the large digits, let me say 40 days, we've seen 44 days of exceeding the limit. So it was very close to getting within this scope and this is mostly driven by the replacement of old vehicles by new vehicles, which we have all together accelerated with the programs we are running. Even though the media do not give any value to their software fix as we can or improvements we can deliberately and to our vehicles we're committed to do, this is range of 25% to 30%, which we can improve the NOx performance of these vehicles which is significant as well. So if we were to go for this development in a rational way, we would see and the discussion suggest that the last year all the cities became terribly bad and now we are in this terrible situation. As I said, the fact is just the opposite and it’s getting better all the time, and it just takes a few more years with all measures which have been decided to come below the limits across the board. Will this patients exits, will the public and the political discussion allow that to happen, I can’t tell you. We have some dates like now in February, some core decisions and some, which I can’t foresee the outcome. We are convinced the best way is -- and do not want to start to discuss the downside of our hardware fix which is just the financial issue it goes far beyond that all the negative aspects of it. So we will know more in a month from now and we will go from there. As I said before, having listen to this entire discussion, our customers have brought in 2017 more diesel cars from us in Europe than in 2016 whereas the share has declined by three percentage points in Europe, because we sold more and more gasoline powered vehicles. This shows that our customers are more rational on their decision as well. Björn Scheib: Next one is Michael and after this is Tom.

Michael Raab, Kepler Chevreux. When I look at the two components that make the U.S. dollar related FX effects in this year, I think it’s hard to presume that the translation effect element is going to be a negative one. But when I look at the transaction effect of it, is that going to be still a positive one and if so perhaps lower than the previous year or which direction which magnitude it’s going to take?

We have already given guidance to the 2018 FX effect, which is about 1 billion. There of course negative and included is the translation effect maybe on trucks. And just for information, it is not only the U.S. dollar it is Chinese renminbi, it is the Turkish lira, it is Japanese yen and the British pound. So even pretty evenly distributed, which shows you that there is a major effect from the smaller exposures and of course due to the euro appreciation that effect accounts for 1 billion.

When I look at the transactional rates, you’re going to use with your dollar related contracts this year. Are they still better than the previous year or already worse?

Of course we do go specifically into the hedge rates due to the competitive data, so that we are not disclosing. You get guidance on the effect and I do think that is something you can work on.

Tom Thrope here from Evercore ISI. Just a quick one on mobility, if I may. You noted in some sense partnership makes sense and in other senses go alone and make sense and I think just ask one on your ride sharing, your potential tie-up with BMW. Can you maybe elaborate on why BMW makes sense as a partner, given you don’t -- scale’s question about and you don’t necessarily have a complementary skill set. So why does BMW make sense as opposed to pursuing a partnership with a bigger more prevalent mobility provider or even considering a partial IPO of the whole mobility services business as opposed to just the ride sharing part? Thank you.

As you know, it’s a pure speculation in the media about partnering with BMW. On the other hand, Dieter pointed at large. There are two major objectives; one is to strengthen the market position, which is finally also to increase the customer base and the transactions and on the other hand, to get all the capabilities you need for the future for running a platform in the future of autonomous driving robo-taxis. The levers we do have to support this strategy is organic growth, which we have demonstrated last year by another 100% growth in the KPIs. Secondly, we go for M&A transactions, no doubt just to complete our position wherever we can, we go we look into partnering on top and of course we also do not exclude that we go for third party equity funding or external funding. So we need always to consider in moving forward what supports our strategy most and you will see us then deciding on the one or the other or combined elements of what I said right now. Björn Scheib: So next then would Jürgen and then it’s Max. Jürgen Pieper: Jürgen Pieper from Metzler. One question on demand with all this diesel discussions with possible gasoline discussions we will reach sometimes that find particular emissions of gasoline cars could become a problem, which was a wave of electric cars starting 2020. Isn’t that likely that the consumer at some point goes into wait and see attitude and simply waits for the new technologies and we get a recessionary environment at least in some regions.

You have forgotten to mention the critical comment about electric mobility from Cobalt to infrastructure to recycling to what have you, which I’ve added of course as of. On the other hand, I just told you that being bombarded by 20 articles per newspaper for years, our customers provide us with best sales that are numbers 59 months I think including January and on top of that, we should not look at the growth purely from a German perspective. There are small impacts we are seeing in their take rate between diesel and gasoline are basically limited to Germany, Great Britain and to that extent, France. Italy, for instance, has never shown any reaction to it, many other countries the same. So we are a little bit overwhelmed by the media and the political discussion fueled by elections on top of it. The customer as I said before has little more rational approach to this issue. Is there risk, of course there is always risks, and I can’t exclude 100% any developments. I just can say what happens so far and we are confident that we will continue to offer so many attractive products that the customer will decide for one of a product and going forward more and more they have the chance to see if they want to include electric vehicles in their choice. Björn Scheib: Next would be Max.

Good morning. Max Warburton, at Bernstein. Can I look to 2019 and beyond and ask two questions about electric vehicle demand. Mercedes-Benz obviously has a very sophisticated market research organization, and you’re probably spending a lot of time from to figure out what’s real demand going to look like. What are your latest thoughts on that? I mean it occurs to me that we seem to have Tesla model freeze being sold in the secondary market at below list price in the states in recent weeks, which seems odd. Jaguar's claimed orders for the I-PACE seem quite modest. How are you feeling about actually the vehicle demand in 2019 and 2020? Is there a risk that the German's brining or the premium car makers bringing vehicles to market were not going to have enough buyers for these first generation vehicles?

I'm not sure if the customers we can ask in these polls know by themselves what they will do next year and the year after. Until about that we can ask all the different institutes who are driven by whatever ideas in there, their expectations. I said you all the time it's like a bottle of ketch-up. It will come you don’t know when and to which extent when you shake it. And therefore, the number one priority we have to follow is flexibility. So whatever we do in this regard, we have to be able to react and that's exactly our main guidance. Of course the money we spent we have spent and we can't put it in any more that is clear. And we will need these investments, we will need this product there is no doubt or whatsoever. Our best guess is that by 2025 we’ll be between 15% and 25% of our production full battery electric vehicles but that's our best guess. And I can't confirm that by any market studies in any form. Perhaps one thing I could say a little closer to the market we get when we ask our sales organizations. And while in the beginning these numbers were purely top-down, we are seeing meanwhile a confirmation in some cases even little demand going beyond these down numbers by our sales organization. This is still not the customer but this is one layer closer to the customer. Last of course the development will be heterogeneous, it will be different in different parts of the world. And the bet that we will continue in China or even though there were some little bit more hesitant comments by minister more recently but that in China, we’ll have a significant development in this regard that is pretty safe. And especially in China, it's good to know that more than one -- or about one third of all the sales of electric cars are supplied by two manufacturers, which is BAIC and BYD, and these are our two closest partners. So we know very well what's going on there and have the best insight into that market as possible.

Just the second part to have a follow-on onto this, you talked about this 15% to 20% estimate for 2025. What's the worst outcome for profitability if it's lower than that or higher than that?

Let's first say, we told you on our last Capital Markets Day for Mercedes Cars that we are putting all these parameters together. Taking this planning assumption and are seeing that this of course based on the investments and based on lower margins or contributions on these vehicles, there are burden on our profitability from the sales of these vehicles as well, burden in the sense of less profitable not profitable. And we told you as well that by now we're working to compensate and offset these effects and we told you that our realistic objective is to keep our profitability in this range of 8% to 10% in this transition, in this transformation. Now, when the assumption on the electric vehicles will be too high than what's coming at lower rates, this would have a positive impact on our profitability as a logical consequence of what I just said, that will certainly have a negative impact on our capability of further driving down our CO2 footprint and vice versa. So that’s what we know today. The good thing is that we are preparing ourselves today for these challenges, which are, if we talk about, seven years down the road of course, it starts earlier. And therefore I have lot of preparatory time and therefore we are very confident as in the past whereas sometimes that burden came shorter that we will deliver on what we told you in this regard.

Next one would be Georges.

Good morning. Georges Dieng, Natixis. Two questions. One on China, if you could may be elaborate a bit on the outlook you see for China, especially the longer term trend in terms of margin, potentially margin erosion as you're heading for more investments, especially in electrification. Another related question on China is how you intent to address, to address the NAV quarters. My understanding is that at least in'19, you will not be able to meet the requirements and I guess you will have to buy credits to get there. Is that an issue and all? And last point if I may on the U.S. tax reform. Did you make, let's say, have you fine-tune, let’s say, your assessment of the U.S. tax reform in '18 and beyond in terms of effective corporate tax rate or other items that might be relevant. Thank you.

We continue to see significant growth dynamic in the Chinese market overall. We continue to see the premium market to outgrow the general markets and we have built for ourselves very solid platform to benefit from these opportunities. At anywhere in the world, its true in China as well that electric vehicles are below the average of our profitability. Perhaps one thing we should mention when we talk about contribution margins. We have lower vertical integration for electric vehicles and therefore we need lower contribution margins which does mean that the profitability would be the same but this is one aspect we have to consider in this regard. So this applies for China of course as well. As far as the quarters are concerned, some people misunderstand when they hear 8%, 10% or 12% that we would have to sell 8%, or 10% or 12% of our production with battery electric vehicles. The fact that you get credit per vehicle and this changes over time, but let's say for full battery electric, you can assume five credit so we can divide by five and you want to come to the share of your production, which you have to sell electric which makes these targets more achievable. Our plan of course is to fulfill but we have access there, as I said before, talked about our relationship to main most successful vehicle manufacturers. In China, we have access to credit, if need be. But overall, our objective is to fulfill of course. Pressures, when you talk about the pressure on margins in China, I think their bike and motors numbers are public and you can see that they had a very nice development in recent years as far as profitability is concerned.

The bike and motor numbers are public and you can see the BBAC performance very much is contributing to the operation performance of this company.

It’s not in the first place indigenous bike brand, which is responsible for these numbers. So this is an indicator that this is not only a volume gain, but it’s nice gain of all. Clearly, you know the structure for us in China is different both as far as revenue are concerned as much, as well as how the margins are concerned because of this partnership situation. But overall, China is not only from a volume perspective but from profit perspective of course an important contributor for us as well. So taxes…

Just for your information on the 13th of February, our annual report is available. So you can also look into the detailed development of detailed set of BBAC. You see all the details of our joint venture. The corporate tax rate, which was between 31% and 32%, is now reduced by 3% due to the U.S. tax reform. We will go now into a range of 28% to 30% with respective cash effects in the future. Of course, the tax reform had no effect now in 2018 on the cash but on the ’17 -- in ’17 on the cash but on the net income, as you know.

It’s Adam Hull at MainFirst. I just want to drill down a little bit more on trucks and particularly on a midterm perspective. When you benchmark yourselves against your peers, could you talk a bit about where you really fall in short and where your opportunities in terms of self help are? Because I think back in September Martin you indicated that you are 8% over the cycle and what even rather be a minimum in your mind, you really ought to potentially be doing more. Brazil losses I think are coming down, quite a sharing of your parts using a scale; India margins. But could you really help us on the self help measures that you can really achieve over next two to three years or so? I realized you got the Capital Markets Day in June. But maybe you can give us a little bit more feel on that self help for your business which is of course by far the largest truck business in the world? Thanks.

You basically answered the question, while posing the question. So there is the one big item, which we have disclosed in the past and I think we did formidable progress in the last couple of years and especially last year is Brazil in order to get the brand, the structure of the company right-sized to get the product far more attractive. We gained significant market share. The year ’16, ’17 I think we’re coming back on the cost side and then now and with the different market rebounding that certainly was an important step to get back to profitability. And other long term investment from our side, which puts question on the profitability, was certainly India where we started. Where we decided to go with a Greenfield approach that means doing everything new from the factory, over to the product, to the team and building it up, and we bet when we started eight weeks ago and that shows you how long you have to look in the future. We betted that at one point of time, this market converts to a more technology driven market when it comes to emissions and it converts on the customer side to a more best utility area in logistics where in time and in cost is more important than just arriving. Here we saw a big breakthrough in last year with the regulations concerning Euro 4 and we see that the government is clearly serious about to modernize the complete Indian market and now the game is completely different, now we have the right product. Now our global scales and technology can be of a tremendous help on the local side, and I think we are absolutely great positioned to serve that let’s say building market. And I’m not talking just about the entire market size in India, I talk about that segment of the market where the values we sell all over the world, quality, reliability, fuel efficiency, total cost of ownership, advanced emissions technologies, safety technologies where those things come to fruition and then we can serve that. So I see here a very positive outlook in the years to come, it’s still a long journey, so that will be a big driver in 2018. Very important is for us Western Europe just by the size, and here we started intense work in all aspects of the cost side. And I’m sure that in 2018, we can reveal significant steps forward, which then will be shown in our bottom line. When we launched that program and I don’t know the time when it was disclosed to you, but we put 1.4 billion target on top of everything. So where we want to improve our profitability in this area and I would say Europe and Brazil together, I would say we are pretty much on track to get that money. So I’m really positive about it. I hope that answered your question.

And if could just ask one left with the market rising now. Can your margins, in NAFTA, which I think are at pretty good level, double digit margin already. Can that drift higher, will you get a bit of operating leverage there with a rising market do you think into ’18 and ’19 maybe?

First of all, I don’t know. We never disclose margins in regions, so that’s pure speculations from analyst. But certainly, a rising market always helps this margin and while a declining margin always put some pressure on margin. So as this again calculation from analyst, so you should talk to them. Björn Scheib: We've got now two more people on the list. And after this, we may have room for one or two more questions. The first one would be here and then there after this.

We have heard that diesel sales figures are up. I guess, it's not only a question of product probably it's also with regard to prices and finance conditions. So my question is what is the current situation regarding receiver values? And second part of this question is how do you manage residual value risks in the future, because when you see increase four years the cars sold today are coming back and in an environment where we maybe see increasing electric car sales? Thank you.

So in general terms, we had no -- as we have disclosed already our number yesterday, we have no material effect on the residual value not in the respective regions not in the specific area of diesel, but also are in the specific area of any other car. So to say of course our risk management focus on any development. As for example in the U.S., you have developments between SUVs and Sedan's as you know. We have in Europe a diesel discussion and we are watching all this developments. For the future of course, we do the same as we do today. So there is nothing difference in terms of how we approach the residual values from a process point of view or from assessment point of view and that will hold true also for the electrified cars, and so there is no difference. Of course we are might grow and we grow sometimes for in the early beginning of electrification we for example we took over the battery for example as a separate piece of the financing product, because due to new technologies for example you have to take out this risk so to say for the customers. But other than this, we’re doing the same in the future as we do today.

Good morning. Stefan Burgstaller, Goldman Sachs. I got two questions. One just wanted to hear your perspective on pricing power. So when you talked about your capacity constraint, you clearly have a good product people want that. And when we think strategically forward, there is a question about the impact on the car market demand from mobility services. And it’s just not an opportune moment to really try and limit your capacity expansion, increase the flexibility and really press the pricing power of the Mercedes-Benz brand in this period of structural change and much as dreaming, is it just not that much of a premium brand? That's my first question. And the second one, I live under the impression that the industry particularly the premium manufacturers have expanded down to value chain into compact cars, partially because there is all the economic strategy to comply with CO2. Again, if I think forward and imagine a world of electrification in a more electrified world, it should be easier to comply with CO2. So how strategic is a compact car segment when you think about the next decade for premium car manufacturer, like Mercedes?

Let me start with the second question. You know that the formula this year to fleet requirement per manufacturer is calculated is a weight based formula. And our objective and our target internally is that every single segment of our vehicles complies with its own CO2 requirement. And I can tell you that this challenge for compact is not naturally and easier one than the same for bigger cars. So if it were and I don’t know that and if it would have been the motivation for entering the segment, it would not have been a good decision on that basis. It was a very good decision overall. And beyond the profitability, which we accomplished in that segment with current generation and we will accomplish with the next generation and that is clearly highly valid generating in a sense of [DCVA]. I am totally convinced that there is coolness factor of the brand of Mercedes, which helps in the sales of Maybach S-Class vehicles, has significant component coming from the compact car development, which we've shown in the market. And again, even the high end customer wants to relate to a relevant brand, which is in the current stream of development. The customer base we had before was running the risk that it would be in go for extension and therefore its very nice that we changed our average age by 10% this is with all respect to all of our customers of course, I'm part of them. So there are many benefits, which we're having from them and some scale aspects are coming from that as well, where other of our vehicles benefit. So the compact car are not way to accomplish our CO2 targets they are serving a much broader purpose. Of course you always have to try to find the good balance between pricing and volume. Before I set the target of becoming number one volume wise in the market, I would say we were caught in this trap. We said we're different kind of animal and that customers don’t buy our cars or has no relation to the fact that we are the best car company for premium cars and no board is better been asked. And I'm convinced that at the end of the day we have Election Day everyday and the waters tell us who has the best package and when they go for other vehicles for other brands then we don’t have the best package. And this notion the smaller your brand the better your pricing power, I think is limited. Of course everyday and every single tactical and strategic movement you make in any market, we have to find the best balance and I cannot exclude that there is perhaps a little bit more upside in pricing, which would overall have a positive impact on our profitability versus, volume, I cannot exclude that. But as a general strategy say, well let's not build any plans anymore and be satisfied with what we have. I think at the end of the day, we would go again for extinction. We are not in a different leak. It’s not a separate market for us where we are the only ones and then there are these dumb guys who are called competitors that’s not the situation. Björn Scheib: Okay. It seems that we have pretty much covered your open questions. With this, thank you very much. So ladies and gentlemen, thank you very much for your questions and for being with us today. For the ones who are listening on the Internet, thank you very much for all joining in. Also, very big thank you to the Daimler management team for answering all these questions. As we already told you, we’re going to host a Truck Capital Markets Day on the 6th of June in Portland, Oregon. So please if you are being interested in trucks, make sure that you note this date in your calendars. Now, investor relations and the Daimler management team remains at your disposal to a couple of more further questions. And we wish you all safe travels back home and wherever you have listened, thank you very much for joining in. Bye-bye.