It’s the Global Conference Call of Daimler. At our customers request this conference will be recorded. The replay of the conference call will also be available as on demand audio webcast in the Investors Relation section of the Daimler website. The short introduction will be directly followed by a Q&A section. [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 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. May I now hand over to Bjorn Scheib, Head of Daimler Investor Relations. Thank you very much.

Good morning, ladies and gentlemen. This is Bjorn Scheib speaking. On behalf of Daimler, I would like to welcome you on both the telephone and the Internet to our Q2 results conference call. I'm very happy to have today with us our CEO of Daimler and Head of the Mercedes-Benz Cars, Ola Källenius; Martin Daum, Member of the Board of Management responsible for the Daimler Trucks and Buses; and Harald Wilhelm, member of the Board of Management responsible for Finance and Controlling and the Daimler Financial Services. In order to give you maximum time for your questions, ladies and gentlemen, please stay disciplined and after this short introduction, limit yourself to one and max two questions in order to get everybody in this call to get opportunity to raise questions. Now I'd like to hand over to Ola. Ola Källenius: Thank you, Bjorn, and a warm welcome from me as well. Obviously, Q2 hasn't been an easy quarter for us. We had to adjust our earnings forecast two times and our free cash flow is reflecting our high level of investment for our future and a significant increase in working capital. So let me be clear, our numbers are far from satisfactory. Looking ahead, we expect the tangible improvement in the second half of this year with the main driver being our strong product line-up and our own industrial capability. In Q2, Mercedes-Benz Cars and Daimler Trucks defended their leading market positions based upon their attractive products, and we're building on that. For example, with the premier of the old new GLB and the start of production of the new Actros. Our pipeline remains very full. At the same time, we intensified the review of our current and future portfolio to focus our resources on the most relevant and profitable parts of our line-up. For Smart, as an example, we have already made respective decisions. Plus, we launched efficiency programs in all areas of our business and have moved ahead with the implementation of our new company structure. So what was the situation in the markets in the second quarter? Again, the Chinese past year car market decreased significantly in the second quarter. That also goes for India, demand in Europe was slightly below the previous year and the U.S. remained on about the same level as the last year. Car sales in Japan exceeded the prior year level. In sum, worldwide demand for cars continued to weaken in the second quarter, but the premium segment proved to be more resilient. Truck markets develop favorably in North America and Europe, as well as in Brazil. Some emerging markets faced headwinds, for example, Russia and Turkey. Demand for vans and buses continue to be high in major markets, notably in Europe. Now Harald will tell you about our financial performance in the second quarter. Harald?

Thanks, Ola, and good morning, everybody. Overall, at Daimler, we sold 82,000 vehicles, that is 1% less than in the prior year quarter and that is mainly due to the sales situation at passenger cars. At the same time, our revenues increased by almost 5% to €43 billion. The growth is mainly coming from the stronger services and parts business in Mercedes-Benz Cars in the quarter and very favorably [indiscernible] the Daimler Trucks and the financial services coming from positive structural mix in sales and in the FX development. Looking at the free cash flow from the industrial business, we finished the half year at the minus €3.3 billion. On the EBIT side, due to the one-off charges of more than €4 billion the group EBIT came in at minus 1.6, which is obviously significantly below the prior year. As a result of that, the net profit was also significantly below the previous year's figure at minus €1.2 billion. Earnings per share amounted to minus €1.24. The tax income reported in the P&L is due to the deferred tax assets resulting from the pretax losses. If we look at the performance evolution on slide five, obviously the €1.6 billion EBIT negative was burdened by the exceptional items reported in our ad hoc statements. If we exclude these, we achieved an EBIT of €2.6 billion this quarter. In other words, it's overall roughly in line with prior year level performance. How did we get there? Overall, if we take volume structure net pricing together, it was slightly positive and that is due to an increase of Daimler Trucks and Buses. On the FX side, we faced some headwinds with the renminbi, the British pound, as well as the couple of emerging market currencies. In the other cost changes, if you take the €350 million of the one-off disclosed items away, you see higher expenses for new technologies and future products at NBC, as well as cost inflation that could not be fully compensated this quarter. Let's have a look at the net liquidity, page six. This decreased to €6.6 billion by the end of the first half. The decline, again, at the end of 2018 is a result of three elements, which roughly weight equally, number one, the implementation of IFRS 16; number two, the dividend paid and number three, the free cash flow of the industrial business. After the first half of the year, this industrial free cash flow of minus €3.3 billion reflects being the cash flow from earnings, as well as other impacts of €1.9 billion after a slow start into the year. In addition, the free cash flow reflects the strong ramp-up in working capital of €3.5 billion due to the significant higher inventories of finished and unfinished goods in all our divisions. We have continued our strong investments into our future with about €5 billion going into property plant and equipment, as well as intangible assets. That significantly more than the depreciation/amortization. Clearly, we expect the free cash flow to be significantly positive in the second half of the year due to a swing in working capital. Therefore, the net industry liquidity will increase substantially in the second half of the year. In other words, we expect the full year free cash flow to be positive. Despite the temporary and lower net industrial liquidity, we are safeguarding our financial flexibilities with balanced mix of funding instruments, which you can see in the appendix. This allows us to mitigate risk and volatility and is key to support our A rating. Now let's have a look at the development in divisions. Back to you, Ola. Ola Källenius: Thank you. Mercedes-Benz continues to be the leading premium car brand in the world. In Q2, sales of our new compact family increased by almost 30%. The G-Class, which was fully revamped last year, also grew by double-digit rate. But in some, MBC unit sales were slightly below the prior year level, largely due to model changes in the SUV segment. And the situation will be improved in the course of the year. With €22.3 billion revenue of Mercedes-Benz Cars was slightly below the prior year quarter and the EBIT fell to minus €672 million. Without special items, the Q2 EBIT is €1.2 billion versus €1.9 billion in Q2 of 2018. Beyond the stated market conditions and model changes, the primary reasons for the decline in earnings were, constraints on vehicle availability, net pricing in a highly competitive environment, foreign exchange rates, especially with regard to the Chinese renminbi, higher material costs, plus expenses for new technologies and future products. That's why it's important to work even more efficiently on future technologies as part of the transformation that the industry is in. One example of that is the development corporation on autonomous driving where we will share cost and develop the technology of the next-generation together with BMW. Looking ahead, we expect to turn the tied in the second half of the year, particular based on projected strong fourth quarter. If we move over to Benz, Mercedes-Benz Vans, again, reached the prior year sales record of 111,000 vans. Sales of the Sprinter grew especially strong. On the other hand, we faced tough competition in the midsize segment. Sales decreased by 8%. Revenue increased by 4% to €3.7 billion and at minus €2.1 billion EBIT that was significantly below the prior year level. And the earnings were burdened by net pricing also here foreign exchange effects, and of course, the mentioned special items. Now Martin will elaborate on our truck and bus business. Martin, over to you.

Thank you, Ola. Daimler Trucks increased the sales in the second quarter to 126,000 units, fueled by very strong sales in North America. Even better on the revenue side, we had plus of 14% to €10.5 billion, mainly due to favorable mix of our products. The EBITDA increased by 33% to €725 million compared to the prior year quarter. If we look - next page please, if you look at the EBIT, the higher unit sales, the net pricing and the foreign exchange rates had a positive effect on the earnings at trucks. On the negative side, higher costs mainly related to higher raw material prices and our extraordinary measure, which we did concerning the [indiscernible] So we look at the results, we ended up before disclosed items at a 7.4% of - for the truck. The incoming orders at trucks were lower than the exceptionally high numbers in the prior year. This applies particularly to North America, but you have to highlight that 2018 was very unusual year in North America. So we are now back to a normal season that the majority of the orders will come in Q3 and Q4, so we are back to normal year. We have very strong and solid order backlog that provides a good visibility for the second half of the year. So we feel confident for that period. On the Bus side, sales grew by 12% to 8,400 units, in particular, the demand for CD buses was very strong. The revenues increased to €1.3 billion and this €106 million EBIT rose by 61%. If we look at that EBIT, we see certainly the special impact we had if we compare with the first quarter where we had a delay in deliveries, which we are able to make up mostly in the second quarter. So this is rather an unusual quarter, but we are well on track in our profitability in the bus business. Higher unit sales in the EU30 region in Brazil partly offset by a retail product mix made rather rest of the impacts. Foreign exchange rate related effects had a negative impact on earnings, and Harald, I will pass on to you for the mobility services.

Thanks, Martin. So Daimler Financial Services, the new business came in at €18.4 billion, which is roughly at the same level in previous year and that reflects obviously the global market development. Therefore, the contract volume is at 156 fueled by favorable FX tailwind. The EBIT at 431, that is significantly up. If we look on the page 17, you will see that, I mean, this is due to the charge of the Toll Collect arbitration proceedings in the prior year quarter. If we look at the performance evolution, we see a bit of a headwind coming from normalization of cost of risk and some higher expenses for the new mobility solutions. Let's have a look at these. On the page 18, so jointly with BMW, we pushed ahead with our YOUR NOW joint ventures at full speed after the creation in Q1. Now the mobility services are used by 75 million customers. We push hard on the scaling and that is on track and jointly, we want to continue to grow globally in this area with a particular emphasis on the right hailing [ph] business. That brings us to the outlook and I hand back to you Ola. Ola Källenius: Thank you, Harald. Global demand for passenger new cars in 2019 is expected to be slightly lower than in the previous year. We see the demand for vans and buses to remain high - should remain high in major markets. Truck demand is developing differently in the regions relevant to us. Overall, however, we expect the market conditions to remain favorable. So what does that mean for our sales outlook? At cars, we expect sales on the prior year level. For the second half of the year, we see an upward trend due to significantly better vehicle availability, especially with regard to the SUV, the GLE, a very well received product where demand exceeds availability by far right now. In addition, we expect momentum from - new or upgraded vehicles, including the CLA shooting break, the new - all-new GLS and also the all-new GLB. At Vans, we're also expecting sales on the prior year level. Growth will be generated in the U.S. and in Europe and we expect to gain additional sales momentum from the new Sprinter. At Trucks, we assume slightly higher unit sales with growth in North America, Brazil and India. And at Buses, we expect to significantly increase sales with slight growth in Europe and in Latin America and significant growth in India. If we move over to the EBIT outlook. We adjusted the EBIT outlook for the cars and vans due to the onetime effects in our current commercial and industrial outlook. We now expect 3% to 5% return on sales at cars and minus 15% to minus 17% returns on sales advanced. As a consequence, we now assume that the group EBIT in 2019 will be significantly below the prior year level. Based on their underlying performance, the earnings forecast at our other divisions remain unchanged, meaning 7% to 9% return on sales at trucks and 5% to 7% return on sales of buses and 17% to 19% return on equity at financial services. For 2019, we expect the free cash flow of our industrial businesses to be significantly lower than 2018. So what are the priorities for the second half of the year? Of course, we are very focused on solving our operational challenges and remove restrictions, in particular, improving availability of our high demand, high-margin vehicles. We will push efficiency in the short and midterm through comprehensive performance programs in all divisions and the benefits of PROJECT FUTURE. And we will prioritize capital allocation and enhance our focus on free cash flow by establishing the mindset shift towards cash. At the same time, we will continue the transformation of our company at full speed with investment in new technologies. We will work on our new sustainable business strategy, the announcement of our ambition 2039 was the first piece of that puzzle. And the fact that yesterday, Byke [ph] as our long-standing partner in China, is now also a long-term oriented shareholder at Daimler underscores the future potential of our company. The second half of 2019 has just begun and we are determined to make it count. And with that, we look forward to your questions. Thank you very much.

So Ola, Harald and Martin, thank you so much for this introduction. Ladies and gentlemen, you have the opportunity to ask your questions now. The operator will as usual identify the questioner by name, but please, again, introduce yourself with your name and the name of the organization that you're going to represent before asking your question. [Operator Instructions] The operator now is now going to explain the procedure and then we're going to start.

[Operator Instructions] The first question is from Arndt Ellinghorst of ISI Evercore.

Yes. Good early morning everyone on the call. My question really is on your net liquidity. And you're now at the level of €6.6 billion as you've shown us, that's down from about €21 billion peak level a couple of years back. And if you could just update us what's your minimum net cash level is right now? Is that about €10 billion I think that's a number I have in mind. And then, secondly, could you give us some color of how much of the €2.6 billion these are related provisions might turn into a cash payment this year or even next year? And then Harald, if you could give us some color on the free cash flow walk for the second half because I think you need to generate about €4 billion to €5 billion of free cash flow in the second half to generate, just give or take €1 billion or €2 billion for the full year? Thanks.

Thanks, Arndt. And good morning. So first on the net liquidity, I mean clearly, at 6.6 we are not and we cannot be happy at all. And therefore, I mean we clearly see the second half year free cash flow to be very positive and to recover what we lost, I mean certainly in the first half of the year, and I think as I said before, I mean, therefore, the net liquidity position should restore significantly in the second half of the year. We'll not give thereby today a new full year target number on the free cash flow. The formal guidance is below 2018, but I said before, the free cash flow for full year is going to be positive. So that means yes, we're going to recover. How can we do that? Higher earnings contribution in the second half of the year with heavy margin metal coming soon [ph]. And the most important part of it, the working capital swinging i.e. the inventory, which we build up in the first half of the year, we intend to reverse that situation in the second half of the year. I mean, therefore, we should come back to a net liquidity level, which is very solid. And bear in mind also the financial flexibility tools, which we have as a whole. On top, I mean the second half will be supported as well by dividends to be received in from China. Ola, do you have anything? Ola Källenius: Good morning, Arndt. With regard your question on free cash flow impact of the current proceedings, as you know, these proceedings has been going on for some years now and we are cooperating with the authorities in this matter and are determined to reach resolution on this. To predict the time line, it's very difficult. And our experience tells us to make a precise statement about that does not make sense at this point in time. I can only reiterate that we are pursuing resolution. We will get back to you as soon as we have new information, but cannot make a firm prediction on when potential cash flow impact of this will happen.

Okay. Thank you. And Harald, do you have a number in mind for minimum net liquidity?

I will not say the number in terms of minimum net liquidity, but clearly at 6.6 I'm not happy for the half year. And I said it before, this will be higher full year basis. And as Ola emphasized, cash generation is in our focus moving forward, so that should be a low point.

Okay. Thank you.

And the next question is from Tim Rokossa of Deutsche Bank. Your line is now open. Please go ahead.

Good morning, everyone. It's Tim from Deutsche Bank. I would have two questions, the one is a follow-up to Arndt’s free cash flow target. Ola, I think your comment that the focus shifts to cash is surely absolutely, welcome. And also the free cash flow is expected to be positive from the full year. Harald, you already gave us some of the ingredients, you spoke about product availability, working capital, China dividend, when you talk about capital allocation prioritization, what exactly do you have in mind on that side? Can you give us some examples? And then secondly, you guys said this morning you haven't intensified your portfolio reviewing your cost-cutting efforts, you also announced your Capital Markets Day, how can we expect the communication around your efforts? Well we have to wait until November to hear about the plan and get some updates on certain projects and targets, will you update us in between and presumably Ola, you're probably still targeting 8% to 10% for Mercedes by 2021, right? Thank you.

Let me go-ahead maybe on the capital allocation question. Well, the difference probably is going to be very in isolation. Each and every of the projects, which has been initiated and done in the past make sense economically, I think that's an assumption I need to start from. But we will need to look, I mean on a more consolidated basis what we can afford to do and prioritize the investments moving ahead. Is that going to have a material impact on the second half of the year, I would like to moderate expectations here as - I mean most of the stuff of the second half in terms of the investment the projects, I mean is committed and will not do any short term stupid cut on these investments., but clearly that's the way we're going to look at the portfolio, at the investments I mean, moving ahead and therefore, I mean that will phase in 2020 and beyond. Ola Källenius: Tim, with regard to your question, when we will get the full detail of our game plan in terms of performance improvement and efficiency. We started this efficiency programs earlier this year and we have in the wake of the results that we've just seen intensified these programs. Of course, when it's eager to tell the whole story as quickly as possible, but we have decided that we wanted to come out with a more comprehensive message and therefore, when we do a Capital Markets Day and I'll just piecemeal it for you. So rest assured, we are working hard on this and measures are being put in place, but I don't want to give you our half-baked answer this point in time and you have to bear with us a little bit together to get the picture because beyond performance improvement, which is, of course, crucial. We need to look at where we want to play in the long-term as well and our long-term strategy looks like we want to present both of those items to you later this year.

I think comprehends plan makes a lot more sense. The 8% to 10% for Mercedes in 2020 Ola, is that still on the table? Ola Källenius: 8% to 10% is our strategic corridor. There's no question about that. I don't want to revise change or do anything at this point in time, but again, just ask you to bear with us. We'll come back with a comprehensive plan towards the beginning of Q4, I think we'll be the in Capital Markets Day, and then we'll have a more information about how the second year as progressed. We'll have the planning cycle behind us for 2020 with more visibility of what we think the markets will do and where we stand on the different technologies projects. So hang tight for now and we'll talk in more detail later.

Thank you very much.

The next question is from José Asumendi, JPMorgan. Your line is now open. Please go ahead. José Asumendi: Thanks very much. José Asumendi, JPMorgan. Morning, everyone. Couple of items please. First one Martin on trucks, so can you just may be elaborate, which region still offer the most amount of margin potential improvement going forward? And in the light of the order intake in Europe, do you think we need to see some production adjustments into Q3? Second question for Ola and Harald. Can you comment a bit around the overall market situation in China, there's obviously a sharp contrast between the overall market and demand. How do you see demand evolving in the coming quarters for Mercedes Benz and can you put a little bit in contrast with your product launches and your product planning? Thank you.

First, it's fairly easy the biggest movement we have in the market - on the margin side is certainly still in Brazil. There we come out of the dark rooms in the last years. This year, it's better than last year, but still a long way to go both on the markets as well as concerning our product portfolio. So I'm pretty optimistic here for the next years. Secondly, Europe is for us an area where we came to margin wise better and working hard to achieve that. Concerning your questions about whether we see production adjustments in Q3, trucking is always a volatile market. And we have our production system setup according to that. So we've built to order. So we might see some slight adjustments in Q3. Yes, but that might be single days where we close down the plant using the big time accounts plus our worker staff, so it's more or less a kind of extra holiday in the peak of the summer time, which is not of any problem, but I don't see any big adjustments for the moment. But if the market - if the market changes unexpectedly, we are always possible to follow this - our measurements immediately.

With regard to China, as you know, the overall market has been in contraction, which started already last year. We grew last year and we also managed to grow slightly in the first half of 2019. Perhaps not as much as we had originally set out to do, but nevertheless, slight growth. Driven by our product momentum and relieving some of the constraints that I measured, in particular, the GLE, we are planning to grow at a higher rates in China in the second half of the year compared to the first half of the year, but one must recognize that the overall market is more uncertain in China than it used to be and that the overall market is in contraction. In spite of this, we're cautiously optimistic that the growth story that we have planned for the second half should be possible to implement. José Asumendi: Thank you very much.

The next question is from Stephen Reitman from Societe Generale. Your line is now open. Please go ahead.

Good morning, A operational question. You've mentioned that you have very strong demand for the new GLE. And I guess, GLS, but I guess, the problem is being you won't be able to supply the vehicles in sufficient quantities. How far are you through resolving those problems - bringing up to the full production levels that you plan to be at? And my second question is relating to the slide 19 on the YOUR NOW joint ventures, the GMV, the gross merchandized value is showing the recurring rate of €3.4 billion against the €3.2 billion reported for the first quarter. Is this referring basically to the annualized rate or is this actually the €3.4 billion that reflects the full half year? Thank you. Ola Källenius: So starting with the launch of the GLE and then also the GLS, which is imminent in our operations in Tuscaloosa in the United States. We started that launch late last fall and primarily, due to supplier constraints, we have not been able to follow the launch we had originally set out to do. The product itself is very hard. We received tremendous feedback from our dealers and from customers. But it's not satisfactory position when you can't deliver and you have demand. We have put together comprehensive measures, primarily at the suppliers, but also at the plant to tee up in the second half of the year to get back on track. We used the traditional shutdown that is around 4th of July, just a couple of weeks ago, to do retooling at many of the suppliers where we've had constraints and we're ramping up after that retooling. And also here I would say I'm cautiously optimistic, even though you have after every tool like that some issues that you have to go through. And it feels like I'm looking every day at these numbers and the team on the ground are cautiously optimistic that they can turn that situation around. So we believe yes, that availability will be significantly better in the second half of the year. And also, some of that stock Harald alluded to that as part of the working capital that we have built up that is sitting to be finished that we can wind that stock down in the next months to get into a more normal situation. This is one of our absolutely top priorities right now for the second half of the year.

And Stephen, thanks to put this in spotlight on the growth of the YOUR NOW JVs with the [indiscernible] GMV value as per industry practice, mean we are using previous, annualized data and you see we are on track with the scaling here. Looking forward, I mean, we will certainly endeavor to give you more ingredients top line, but also at the end, bottom line how we intend to run that business but for the short period, I mean I had a chance to look into it, I'm very pleased to see.

Thank you.

And the next question is from Patrick Hummel from UBS. Your line is now open. Please go ahead.

Yeah. Thank you. Good morning, guys. Two questions please. First one is basically following up on the cash flow discussion with earlier on. Just thinking a little bit ahead for the next couple of years, you had special items, €4.2 billion this quarter. Most of that is going to become a cash outflow over the next couple of years. And in light of that, what does that mean for the dividends? I mean, if you're basically not generating much free cash flow over the next couple of years, the net liquidity is down to €6.6 billion, I get it, it's improving little bit over the next couple of quarters, but do you think dividends should really be a priority, would you hold onto the 40% payout target? Or what's your latest thinking about dividends? And the second question, you highlighted that you will prioritize investments in relatively easy way. To save money as collaborating with others and you've entered some partnerships with BMW for example, in autonomous driving department. I want to hear your thoughts basically, how do you as the new management team think about going much further than that for example, thinking about sharing ice powertrains, even platforms, et cetera? Thank you.

Thanks, Patrick. On free cash flow and the dividend, very clearly, we are very conscious how important I mean the dividend is to our shareholders and what's in the centerpiece of our thinking. However, at this juncture of the year we have a lot ahead of us for the second half to generate the significant free cash flow. I think we said before, we want to be cash flow positive full year. So again, in terms of the net liquidity position at the end of the year, you just do it mechanically that means it should be back to double-digit by the end of the year. I emphasized it before. It means that is a very solid - I mean net cash position. We should achieve by the end of the year and then we're going to look at, I mean dividend from that angle. Moving forward, I mean for 2020, I certainly do see the ingredients for higher cash flow generation, our potential let's talk about it when we are getting closer to it.

With regard to Corporation, of course, the transformation of the auto industry, as we know is fundamental and is something that we got for many, many years with the move towards more electrification and other trends that drive the change of this industry. To share the burden of the capital requirement to master that transformation, we are very open for corporation. We take a pragmatic stance here. And we look for partners that are trying to solve the same problem that we're solving and sharing this burden. We have some of this going on with BMW, we have been working in the background on a procurement cooperation for more than 10 years and we intensified that with two main projects in the last year or so, which is, of course, the mobility services that Harald alluded to and now also autonomous drive, which is very capital intensive development. So where we can find win-win situation even with a competitor, we're going to be pragmatic about this. Another example, I mentioned was Smart. We found the best way forward for Smart together with our new shareholder, GLE, moving effectively this business to China, doing engineering and production there, pursuing at totally different cost structure than we have had previously. So that in that entry segment, we can find a return that is respectable and acceptable. With Reno, we're working on live commercial vehicle projects, and so on. So here, yes, we are open for cooperation very important in this regard is also look at your own culture and your cooperation ability and this is something that we're also thinking about how do we make sure that Daimler is cooperating partner that is effective and that we will be focusing on with the partners that we have, but in general, open for win-win situations and that could include if an opportunity arises also combustion powertrains.

Thanks, guys.

The next question is from Angus Tweedie, Citi. Your line is now open. Please go ahead.

Thanks, guys. A couple of questions here. Firstly, on R&D, I just wonder if you give us some sort of an update on how the split is between what's going into new technology versus old ice powertrains there? That would be helpful. And then, secondly, I was hoping if you could talk a bit more about the financial service business. We're seeing good revenue growth there, but new contracts they seem to be growing quickly. Specifically, could you mention how your leverage ratios differ between geographic markets, mostly China, U.S. and Europe? That would be helpful. Thank you. Ola Källenius: With regard to our [indiscernible] cars and maybe Martin wants to say a few words also on the truck side. Even though we don't disclose this split specifically, it's clear that the percentage going into "new technologies" is rising rapidly. Although as before I moved into this new role, I was Head of R&D for 2, 2.5 years. It's not right to talk about new and old technology. There's only new and new. With regard to powertrains, combustion powertrains, on the path to CO2 compliance in the different regions, there is still work to be had on combustion powertrains and we're in the process of updating our current portfolio completing the portfolio on the one hand, but also updating the portfolio for upcoming Euro 7 and also squeezing more CO2 performance out of these powertrains. So part of the picture, as we're going electric in a big way is, of course, in the weighted fuel economy, some investment in the next year is going into the powertrain, the commission based powertrain portfolio as well. Further out, there is room for significant simplification of that powertrain portfolio, but that's the discussion when we talk about strategy later in the fall. But for the next few years, it makes sense and it's rational move to continue to invest in the powertrain portfolio, even though, of course, "new technologies" are taking a much bigger share of our investments going forward. Martin, trucks?

On the truck side, I would say similar picture. We spent a total of €1.3 billion on R&D. It's very difficult to look at where new technology starts and old one stops, it's all new. If we do a new electronic backbone infrastructure it's that just because we want to add connectivity and autonomous on that backbone or whether we use it for active drive systems, which are still considered - active safety systems, which is still considered old technology, which is not true because it's a very new one as now. Our digital cockpit in the Actros, which I considered pretty much new technology, we still counted under old. If you go to the classical CASE, connectivity autonomous electric lifeline [ph] I would say it's about 20% to 25% of our investments are going into that field. The rest are new technologies in our old well-established and trucks.

Well on the financial services side, I mean, the new contract volume obviously follows, I mean the global marketing evolution on the passenger car side as well as on the truck side, I mean, which is in terms of units slightly down as I said earlier minus 1%, so, therefore, we cannot explain the contract volume to grow significantly, I mean at this juncture. In terms of the leverage ratio, the question you asked. I mean, globally we remained very prudent in terms of our risk management approach and at the same time, we had to adjust slightly for cost of risk in some countries, some emerging countries. However, I think that remains at very reasonable healthy level. If you look into the appendices of the disclosure, you have the net credit losses, so the actual ones, which remain at the historically low level I think that gives you some comfort on where we are in that respect.

Can I just follow from that? And that's very helpful color. Just thinking of the leverage, I mean other material differences between, especially Asian markets and the more developed markets, would that be fair? Ola Källenius: I would not, I mean develop - I mean fall beyond that right now in terms of leverage difference between the markets. Let me take that away and we'll come back to you on that.

Thank you very much.

The next question is from Daniel Schwarz, Credit Suisse. Your line is now open. Please go ahead.

Thank you very much. I have a follow-up question regarding the GLE and GLS bottom-neck. Is it possible to quantify the working capital effect from that? And as I understand, several suppliers have been involved in that. Would you say the problem was more on the Mercedes side in terms of the planning of the suppliers or is it really a problem mostly on the supplier side? And if so, do you expect the compensation from suppliers? And the second question would be on the EQC, could you give an update on order trends pricing level of options and may be a split between fleet and private buyers of the EQC? Ola Källenius: With regard to the situation with the GLE and GLS, it does not make any sense for competitive reasons to start discussing who did what in this regard. We don't disclose specific working capital for individual models. I can only reiterate that we were below what we had set out to do in the first half of this year and we are now seeing the first green shoots from the measures that we have taken and are looking at stabilizing and significantly improving the situation in the second half. But I would not like to get into any discussion of who did what, certainly not in the public space. The second question was EQC fleet and private customer. Also, we don't disclose for a new model the channels and we're in the early days. What we can say is that the response to that new vehicle has been tremendous. When we showed it last year to the world, to the press and our dealers, in particular, our dealers were very excited about it. And we're now starting to ramp up that production and there were cautiously optimistic that this can be a really good seller in the all-electric space.

Thank you.

And the next question is from Tom Narayan, RBC Capital Markets. Your line is now open. Please go ahead.

Thanks for taking the question. Tom Narayan, RBC. Just to follow-up on today's question on China, we heard a large supplier yesterday made some potentially surprising commentary, positive on China, potentially a recovery in 2020 discussing -- potentially the government supporting consumer financing. Just curious to your thoughts on China. I know you guys are obviously more levered to the premium side, but just in aggregate, your commentary and views on 2020 in China. And then for Martin, on trucks, we heard from a large peer reviewers I believe last week, some concerns on the North American truck cycle, perhaps could be following sharply in H2 or maybe Q4 2019. I think your guys prepared commentary was pretty positive on North America, just curious as to your thoughts on North American truck cycle in the back half of this year and to 2020 and maybe how you guys a positioned to that. Thank you. Ola Källenius: I'll start with China. As a general comment, we believe in long-term growth in China. It's one of the main pillars of our market growth strategy in the long-term. So China, for us is important and it's a market that will continue to invest in and also gradually increase our production capacity. In the more short-term, as I mentioned, we think that we can grow faster in the second half of this year than we grew even though it was just slight growth in the first half of this year. I think it's a tad too early to say something firm about 2020, but I stick to my comment that we want to pick up momentum in the second half of 2019 for China.

As for truck market into United States. You're fully aware that 2018 and 2019 had been two exceptional years close to a record high sales. Trucking is not an endless go story. Trucking is a fairly stable business where annual volumes fluctuate about -- around the long-term average. So any correction from today's numbers is not only the well expected. I think it's even healthy for market because if we have too long boom, you're only preparing for very sharp decline. So for me, correction in 2020 is something absolutely normal and nothing alarming. Yes, the 2020 numbers in North America will be lower than 2019 numbers, how much we will disclose earlier next year when we have a clearer picture how customer orders come in the fourth quarter for next year. Then is the transition from sales [ph] we experienced in '18 and '19 to more declining phase in '20 coming whether this starts in Q4 this year or in Q1 next year, it will start at one point of time. Our production is flexible enough to immediately react to that. For the time being, I'm still pretty optimistic for very strong market in 2019 that at least goes with the third quarter and then fourth quarter anyhow it's all this kind of the weakest quarter in North America. So I would say 2019 will still stay in the expected level and then '20 will be slightly lower. Ola Källenius: We've got around eight minutes left. So we'll take three more questions. We take this now one in a row. This will be Max, after this, it's going to be George and then it's going to be Adam and all the remainders are going to be called by Investor Relations. Sorry, Max dropped off, so we continue then with George and Adam.

Okay. So the next question is from George Galliers, Goldman Sachs. Your line is now open. Please go ahead.

Thank you. And thank you taking my question. You mentioned during the comments that you are intensifying your review at the product portfolio in order to the future success. Could you perhaps just elaborate on what that means? Could that include cutting sets and model lines from the existing product portfolio? Is it more functioned on powertrain and transmission offering? And are there any tangible examples that you have uncovered so far that could have a meaningful impact on performance over the next 12 to 18 months? Ola Källenius: I come back to what I said to Tim's questions earlier, that going into detail about this even though we could give you piecemeal of that right now, I would like to say that for a more comprehensive review later this year. But needless to say, the method that we use is what are the ones are going to yield the highest returns and what are the ones where you're less optimistic about the return and that's how you trim this tree.

Okay. Thank you.

And the last question is from Adam Hull, MainFirst. Your line is now open. Please go ahead.

Good morning, everyone. Yes, just sort of thinking about sort of the midterm and valuation as well. It seems that you're with equity market that put some big premium on single plays, Ferrari's market cap is €28 billion. If we look at the Volvo Concessie PE, BMW Concessie PE [ph] then arguably, Mercedes cars are trading a negative value ex-Chinese JVs. How do you think about the possibility of moving forward towards the carveout of some of your three businesses? And what's stopping you from doing that? And how long in a sense will you wait before really considering as an important option? Thanks. Ola Källenius: Thank you for that feedback. We have no plans of changing their capital structure of Daimler at this stage.

No change, but certainly bring evaluation of the company back to where it ought to be or where it should be. And I think it's extremely strong portfolio, if you allow me to say that being with the company no for so long. I think there's a great potential ahead. Yes, it's H1 numbers, and not necessarily reflecting that. But from here and now, so I think there's lots of opportunity. It's great product. It's great market positions in all areas and with the emphasis Ola pointed out as a management team, I do believe that in the structure, we have there is significant upside potential.

As far as I can see, we've got room for one more question.

The next question is from [indiscernible] Your line is now open. Please go ahead.

Good morning. I have one question related to your provisions for diesel. Are they only related to necessarily [indiscernible] or also included some provisions for possible payments to customers or any kind of time? Ola Källenius: We don't disclose the individual items of the provisions that we have made. And the experience of these types of proceedings tell us that the less you talk about this, while you are in discussions with the authorities, the better. So unfortunately in this case, I cannot shed more light on this particular topic.

So ladies and gentlemen, thank you very much for your questions and being with us today. Also thank you very much to Ola, Harald and Martin for answering all of your questions. Now Investor Relations is always remains at your disposal to answer any of the additional or open questions that may you have. Last, but not least, the date for this year's Daimler Capital Markets Day has been fixed. It's going to take place on November 14 in London and the day after in New York. In both locations Ola, Martin and Harald will give you an update on our operating performance as always, but more important, also on the cost and the currently developed company's strategies and programs for the Daimler Group, as well as for the new legally separated entities like Mercedes-Benz AG, Daimler Trucks AG and Daimler Mobility AG. The event will be very compact and focused, but for sure, you're going to have the opportunity to raise all your questions and you can choose the location according to your preference. Invitation is going to be sent out in due course. Save the date being sent out already. We're looking to welcome you in November. Thank you for everybody listening on the Internet and on the phone. Have a great morning, great afternoon or great evening wherever you listened in. Thank you and bye-bye.

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