Welcome to 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 an on-demand audio webcast in the Investor Relations section of the Daimler website. The short introduction will be directly followed by a Q&A session. [Operator Instructions]. I would like to remind you that this teleconference is governed by the safe harbor wording that you'll 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 Steffen Hoffmann, Head of Daimler Investor Relations. Thank you very much.

Good morning, ladies and gentlemen. This is Steffen Hoffmann speaking. On behalf of Daimler, I would like to welcome you to our Q1 results conference call. We are very happy to have with us today Harald Wilhelm, our CFO. In order to give you maximum time for your questions, Harald will begin with an introduction directly followed by a Q&A session. The respective presentation can be found on the Daimler IR website. Now I would like to hand over to Harald.

Thanks a lot, Steffen, and hello, everybody. Good morning. To that Q1 call, I mean, I would say, which is maybe a bit more than a Q1 call. Let me call it a bit kind of a preview or a testimony of luxury meets tech, of margin expansion, of value creation being ahead of us. That quarter gives us confidence to push ahead with our work, both on the strategic and the operational side. We already disclosed, I mean, the figures last week. So today, we will go more into the details but also talk about the outlook, obviously. Let's turn to the key messages on Page 2. First, the Q1 margin at Cars & Vans demonstrates, I would say, the strength of our portfolio and our ability to lower the breakeven point. Cash-wise, we look at an excellent level of net industrial liquidity. The key drivers of that were an effective working capital management and a stringent capital allocation. On the Project Focus, I mean the spin-off and the listing of the Daimler Truck by the end of this year, that work is well underway with a lot of preparation work, obviously. And it will be submitted to an Extraordinary General Meeting in autumn, where Daimler shareholders will be asked to approve this historic strategic step. Product-wise, we are very proud that lately, we could present 3 full electric vehicles to the world: the EQS, the EQA and the EQB. They underline our ambition to lead in electric drive and car software with high-tech luxury EVs. Recently, one of you called it luxury meets tech. As you could see in intro, I love it, and we are well prepared to deliver on that. Looking on the key figures, Page 3. In the first quarter, we sold 729,000 vehicles worldwide. That is a a plus of 13%. The revenue grew by 10%. If you adjust it for FX, it's 15%. EBIT cash flow, 0, reflects the impact of group-wide ongoing positive development on top line side as well as the cost measures paying off. The free cash flow of the industrial business was at €1.8 billion, including the payment made in connection with the settlements with the U.S. authorities on diesel, adding to a net industrial liquidity of more than €20 billion. Now let's have a look at the Mercedes-Benz Cars. Well, we started well at Cars & Vans, I mean, into the year, into 2021. I would say we could keep the positive momentum of the second half of 2020. With the new S-Class and also the attractive SUV portfolio, we have a fascinating product and favorable mix that drives pricing. The S-Class sales and orders are very encouraging. The first quarter, we sold, I mean, more than 15,000 units, and that means deliveries to customers. GLE and GLS remain topics among our customers as well. Our global EV share increased further and was, in that quarter, already more than -- at about 10%. In Europe, that means 1 in 4 cars sold by Mercedes and smart were electrified, yet we delivered on the margin. With this development, we are on track to achieve our 2021 EU CO2 targets. Internally, we drove our fixed cost-reduction measures and cost discipline further and showed overall positive industrial performance. At our Stuttgart-Untertürkheim plant, we're gearing up for electric-first future. That means the Mercedes-Benz Drive System campus will become a technology competence center with a campus focusing clearly on electric drives and battery technology. That means transformation is actually taking shape. Let's have a look at the EQ product portfolio on the Page 6. In the first months of 2021, we presented 3 full electric EQ models, the EQA, the EQB and our first Mercedes-Benz all-electric platform in form of the new luxury sedan, EQS. The EQS is the first model in the Mercedes family to be based on an electric-only architecture for luxury and executive-class electric vehicles. It's the S-Class of the EVs and raises the bar for sustainable high-tech luxury with industry-leading range, aerodynamics and refinement. It delights the driver with a full electric range of up to 770 kilometers according to WLTP and an output of up to 385-kilowatt, over-the-air updatability, the new and impressive MBUX hyper screen and so many more features. Furthermore, the EQS is recharged in just 15 minutes for up to another 300 kilometers. And in terms of aerodynamics, we achieved a new best value of 0.2. We're excited by the initial feedback that we have gathered so far for the EQS. Just to quote to media, "The EQS sets a high bar for large luxury EVs, a really, really high bar, or stepping into the EQS is like stepping into a car from the future." We are delighted by that feedback. Launch to the market in Europe will be in August this year to be followed by U.S. and China by the end of this year, beginning of next year. On the EQA, we have already more than 20,000 orders for that compact vehicle with progressive design, extensive range and intuitive operation based on MBUX. While the EQB is a 7-seater with a unique position among electric cars, compact on the outside spacious on the inside, all electric through and through. There is more to come, the EQE and the SUVs on a fully electric platform in 2022. By the end of next year, a total of 8 Mercedes EQ electric vehicles will therefore be produced at 7 locations on three continents. So you see, we are serious to move on an all-electric world only. Page #7, on the market. We can see that China is running well above last year's level and above pre-COVID level. For Europe, after recovery in the course of 2020, we see a slow-but-encouraging start into 2021, back to about pre-COVID level. And in the U.S., with a slow start but a steady recovery, we are coming back to pre-COVID level. Note, however, that the underlying market demand is even stronger. However, the semiconductor availability refrained us from realizing that full potential. Now on the Van, Page 8. We continue to make progress on the turnaround, which we started last year, and to make that sustainable. The efforts are clearly paying off. We have a volume growth with strong profitability underpinned, at the same time, by a lower cost base. The sales performance is strong with best first quarter in the U.S. and in China. The group sales of electric vans quadrupled compared to Q1 2020. And we drive a consistent implementation of the electric strategy at the Vans division as well. The next-generation eSprinter is based on the new electric -- on a newly developed electric versatility platform coming to market in the second half of 2023. Now on the financials. For Mercedes-Benz Cars & Vans, Q1 sales and revenues are ahead of last year. Sales increased by 15% to 627,000 units. Revenues increased by 16%. If we adjust for FX here, we were up around 20%, which demonstrates significant mix improvement. The EBIT adjusted grew to €3.8 billion. The CFBIT turned positive to €3.1 billion, demonstrating the focus on the cash flow. Let's have a more detailed look at the margin bridge. The favorable sales momentum at Mercedes-Benz Cars translated in a significant increase in volume structure and pricing, where main drivers were especially S-Class, GLE and GLS, but also, on the lower end of the portfolio of the GLA and GLB, they had also a very positive contribution. The overall pricing environment, furthermore, had a positive impact on discount levels, and residual values continued to develop favorably. The ruble and the U.S. dollar drove a negative FX result of about €130 million. The industrial performance developed significantly positively on the production and on the material cost side. Additionally, we extended the useful life, as explained in our last year's disclosure. We worked on the reduction of selling and marketing expenses, however, without compromising on the market appearance, as you can see with the EQS presentation. The same holds true for G&A, where we continue to hold a tight grip on cost. The R&D came in with about €120 million higher year-over-year, which reflects, as we guided, for a slight increase in our technology road map. In the other lines, the most prominent driver is the increase of the equity result of BBAC with a total of €480 million in the first quarter. Remember, first quarter 2020 showed a COVID impact in China. In addition, we had a positive impact from the remeasurement at fair value of the charging infrastructure operator ChargePoint, resulting from its IPO and the smaller M&A real estate transaction. Both topics amount to about 1 percentage point ROS in Q1. The adjustments in the quarter include expenses for legal proceedings and personal cost-optimization programs. Furthermore, income of €600 million in connection with establishment for the JV for fuel cell Cellcentric resulted in a positive contribution. Looking at the cash flow, Page 11. The change in working capital underpins a controlled inventory management, given the increased sales volume and richer middle model mix. Due to the semiconductor shortage, we had to pre-produce some components because we anticipate to recover part of the lost volumes by the end of the year. As you can see, the net investments in PPE and tangible assets, there's a depreciation, amortization and impairment, continues on an almost balanced level, reflecting our rigorous approach to capital allocation. The other line is straightforward. It includes the adjustment of the BBAC at equity result; other noncash book gains within the segment, i.e., the ChargePoint to Cellcentric; and cash-out from provision consumption. Finally, the other bucket includes the payments in connection with the ongoing governmental and legal proceedings and measures taken with regard to Mercedes-Benz diesel vehicles. This relates, in particular, to the payments made in March '21 in settlement of civil and environmental claims made by several U.S. authorities in the prior year in connection with emission control systems used in certain vehicles. On the adjustments, we have diesel payments, the Volvo JV with a cash inflow of €310 million and payments made in connection with the personnel cost-optimization program. Now let's move over to trucks and buses. Here, we could drive sales growth in the first quarter. The increase of Truck sales came mainly from Europe and North America due to improved market conditions but also from gains of market shares. However, at the Bus side, especially the Coach Bus segment, was hit strongly by the effects of COVID. Incoming truck orders in all regions were significantly above prior year's quarter. The impact from semiconductor shortage was not very material in the first quarter. The first quarter, we were able to further reduce our used vehicle stocks. Net pricing developed favorably. End of February, we announced our plan to cooperate with Cummins. We signed an MOU to establish a global, strategic partnership for medium-duty engine systems. And we also could close in the quarter the Fuel Cell joint venture with Volvo, which we announced already before. Let me emphasize a few points on these, on the Page 13. So for the Fuel Cell, Volvo Group acquired a 50% interest in the existing company, Daimler Truck Fuel Cell, for approximately €600 million. Daimler Truck and Volvo Group have agreed to rename the company as Cellcentric. Together, we aim at -- to commence series production during the second half of this decade. In February, on the Cummins side, we announced an MOU concerning the global strategic partnership for medium-duty engines. As part of the planned strategic partnership, Cummins will invest in the further development of the medium-duty engine platform and its global production supply for Daimler Trucks and Buses as of the second half of this decade. Cummins is about to establish an engine plant within the existing Mercedes-Benz Mannheim campus to localize medium-duty engines. What does that mean altogether? These moves allow us to focus on our investments and to allocate capital to those areas where our future lies. Daimler Trucks invests in the development of zero-emission drive technologies and the further development of our own heavy-duty engine platform. On the market side, Page 14. I think that the chart impressively shows that in the key regions, we are already back on pre-COVID levels by the end of Q1. Especially, January and February are historically low sales months because of the production shutdown in December and strong deliveries into Q4. With the production pipeline build back, we saw a strong March. Incoming orders exceeded the prior year's figure by 63% significantly. Benefiting from the economic recovery, level of incoming orders increased by 58,000 units to 150,000 units in the first quarter of 2021. This development is impressive and should cover us well for the sales development in the coming quarters. Book-to-bill, therefore, was at 150%, coming in particular from Europe and the U.S. as well as Asia. That means we are literally sold out in North America. And if you look at the incoming order levels, it's important to mention that we did not open the order book yet for the next year. On the financial side, the sales increased by 4% to 101,000 units. The revenue decreased slightly by 1% to 8.7% but remains close to prior year level. Adjusted for FX, revenues increased by 5%. Adjusted EBIT more than doubled and amounted to €518 million. CFBIT turned positive to €435 million. Looking at the margin walk. Higher truck unit sales, mainly in Europe and North America, resulted in positive volume structure and also net pricing, including a positive contribution from Used Trucks business and aftersales. Pricing development is also favorable across all regions. FX result this quarter was slightly burdened by the U.S. dollar translation effects that were offset with transactional effects from other currencies. Within the industrial performance, we see slightly higher cost for raw material as well as supply chain constraints and logistic costs. Bear in mind that quarter 1 2020 was not yet hit by COVID-19. Overall, selling expenses stayed at about the same level as well as SG&A. In the positive other line, we have included, for example, a better equity result from our Chinese JV with Foton. That leads to The EBIT adjusted of €558 million, which includes a return on sales of 6%. Adjustments include the JV with Volvo and expenses for restructuring measures. The buses, on the other hand, is facing a very tough business environment. On the cash flow side, we can see that the working capital in the Q1 was quite good. Even though we are operating at a higher market level, yet the working capital grew under proportionate. Used vehicle stock is on a record low level as well. The net financial investments reflect the cash contribution attributable to the Daimler Trucks from the Cellcentric JV with Volvo. Depreciation and amortization exceeds net investment in PPE and intangible assets, underlying our focused investment approach. The other line simply adjusts the EBIT effect from Cellcentric settlement, and that leads to CFBIT of €620 million, adjusted for restructuring measures and equity injection. So the CFBIT adjusted amounts to €435 million, which is a cash conversion rate of 0.8. Over to mobility, Page 18. Compared to the first quarter last year, we could see a slight increase in new business, mainly driven by strong loyalty and customer retention, especially in China. Credit reserves are on a stable level with continuously low net credit losses. Also, at Daimler Mobility, the execution of our efficiency measures shows a positive impact on earnings. Absolute OpEx figures go in the right direction. At our mobility services, we are further optimizing our shareholdings and improve our operative business. Let me pick a few examples. Recently, we announced the plan to sell the PARK NOW group with -- to EasyPark. At CHARGE NOW, we aim to gain a new partner, an investor with bp, joining Daimler Mobility and BMW Group as a third investor. At FREE NOW, we continue our growth plan. We will launch multi-mobility services in more than 30 new cities in 2021. And also, in SHARE NOW, we start worldwide on the first reward program in 14 cities in Europe. On the financials, Page 19. The new business was up by 4%. The contract volume amounted to €153 billion. That is 1% higher than at the end of 2020. However, the portfolio decreased in Europe and Americas but could be overcompensated by FX effects. Adjusted EBIT increased significantly to €691 million. And Page 8 -- 20 shows you how we could get there. So that means that €691 million equals 18.7% return on equity adjusted. Let me briefly explain, I mean, how we could get there. Smaller negative FX effect. Key reason for the EBIT improvement compared to last year came from the lower credit risk provision and the higher interest rate margins. After an increase of credit reserves in the past year, we could see a further flattening of credit risk provision by beginning of this year. Absolute net credit losses are below the long-term average. Cost of credit risk ratio is at 0.25% compared to 1.58% in the same period last year. Furthermore, positive operator business performance contributed to a higher EBIT. The adjustment of €54 million versus last quarter relate mainly to onetime effect coming from the sale of shares in Via, Inc. I have already explained on the group level, Page 21, I mean, the division walk. So the reconciliation includes cost for further cost-efficiency measures at the group level and group project-related expenses. Therefore, we can see that the group all-in EBIT is at €5.7 billion and, on an adjusted basis at €5 billion. The adjustments amount to €778 million, as we could see in the division part already. Page 22, on the free cash flow. We highlighted already the division section. So what else? The cash taxes are at €355 million, which is as usual for first quarter, slightly below the average; pension effects of €126 million negative. That's mainly due to internal transfers between the entities. The reported free cash flow from the industrial business is at €1.8 billion and includes €0.9 billion for the payment made in the settlement with the U.S. authorities, as I explained already before. Free cash flow adjusted for legal proceedings, restructuring measures and M&A is at €2.8 billion and marks another step on our way towards a cash flow-oriented culture. Page 23, on the net industrial liquidity. That stands at €20 billion, increased by €2.2 billion compared to year-end '20. The increase is mainly due to the positive free cash flow of the industrial business and a slight positive FX effect. Investment depreciation are basically balanced, as you can see on the chart. Disposal of shareholdings adds to -- by €0.5 billion. Worthwhile to mention, 3 rating agencies upgraded their outlook in Q1, S&P and Moody's to stable and Fitch to positive outlook. Overall, I would say, with that net cash position, that leaves us with a very significant financial flexibility. Now we jump to the outlook, Page 25. So how do we see the guidance for the full year? Before I start on that, please note that all guidance are made under the assumption you see on the slide, meaning no further COVID-19-related setbacks. Our expectation for the development of business in '21 are based on the assumption of a gradual normalization of economic conditions in the markets that are important to us. In particular, we assume that the world economy will be able to recover from the pandemic-related weakness of the year 2020, aided by, among other things, increasing availability of effective vaccines. Based on the expected global economic recovery, worldwide demand for cars and vans is expected to continue favorably this year, and significant growth in market volume is expected for 2021 as a whole. The Chinese car market, which performed better than most other major markets last year, should now grow significantly as well this year. This is a change to the market guidance we gave in February. The economic recovery should also result in improved demand in the major truck markets. That means that in North America and in the EU, we expect significant growth in demand for heavy-duty trucks. This is unchanged. Page 26. We expect a continued positive stimulus from the economic recovery and good underlying demand for our products. We continue to expect the group revenue and EBIT in 2021 to be significantly above 2020. On the free cash flow reported, we keep our guidance that it will be below the last year's figure due to the payments in the context of the settlement with U.S. regulatories and similar proceedings. At the full year disclosure, I also stated that we expect the free cash flow adjusted to be below last year's figure. As of today, however, we do expect free cash flow adjusted to be in the vicinity of the prior year level despite higher cash taxes. Our group guidance for invest R&D and CO2 emissions remain unchanged. Page 27, on the divisional side the -- let me talk about the unit sales and start with a general but an important remark. The current worldwide shortage of supply in certain semiconductor components affected deliveries in the first quarter and could further impact sales in Q2. However, we assume some recovery in Q3 and Q4. At this stage, the visibility is limited. Unfortunately, 2 events occurred in February that posed further challenges for the industry. While our supply chains were already tight and our reserve stocks were low, there was an interruption of about 4 weeks in the supply of utilities in semiconductor factories relevant to us in Texas, as you know, due to the storm, as a result of which clean rooms were unable to operate. And in addition, as one is not bad enough, there was a fire in the semiconductor factory in Japan of one of our suppliers. We and all our partners in the supply chain are making great efforts and taking various measures to reduce the impact of these significant production losses. Obviously, we monitor the situation closely on a 24/7 basis, and we are in constant exchanges with the suppliers. In terms of full year sales, it is currently anticipated that lost volumes can be partly recovered by the end of the year. Based on those assumptions or, should I say, despite those assumptions, the sales guidance for cars and trucks and buses is unchanged at significantly above prior year. The full year disclosure is -- I clarified that significantly means here more than 7.5% or you could call that half sun or fair weather. From a customer demand perspective, where we even would see more pull. However, opportunities beyond that level are at risk due to the discussed semiconductor issues. For Vans, we increased our sales guidance also to significantly above from slightly before. Now on the ROS adjusted, Cars & Vans, based on the strong Q1 development, we now expect 10% to 12% for the full year. For Trucks & Buses, unchanged at 6% to 7%, confirmed by the good Q1 performance. And I think I made that comment, and I'll make it again. I still see it at the upper end of that range despite the semiconductor issues. For DMO, based on the strong Q1 development, we now expect 14% to 15% for the full year. On the divisional guidance for adjusted CCR, they stay at the healthy levels we communicated before. So to wrap it up, in terms of strategic priorities, Page 28. We outlined them during the full year disclosure in February. I think we are making progress in the right direction. You can see that in Q1, we could increase, I mean, the performance. We focus on profitable growth. We can leverage, I mean, pricing power. We made significant progress on cost efficiencies. And on that basis, we uplifted, I mean, the guidance, as you see here this morning. We want to further accelerate on the technology side. We already made important steps in terms of electrification and digitalization. And I think that has been powerfully demonstrated by the product launches, in particular, the EQS in April. By implementing Project Focus, we aim to unlock the full potential of 2 strong, independent businesses. The plan is to complete the listing of Daimler Truck until the end of the year. The truck strategy update will take place on May 20. Invitations will be sent soon. Please note the date. And we will have the EGM in fall for shareholder approval and another CMD in November. The Q1 showed we deliver on these priorities, and we're looking ahead to make our efforts long lasting and sustainable. And by creating the 2 pure-play companies, we want to create Mercedes as the world's preeminent luxury and tech car business, leading in electric drive and car software with margins that reflect our luxury ambition. And with Daimler Truck, we want to establish it as the world's largest truck and bus producer and technology leader towards 0 emissions. This being said, now it's really time for Q&A, I would say.

Thanks a lot, Harald. Ladies and gentlemen, you may ask your questions now. A few practical points. [Operator Instructions]. Now before we start, the operator will explain the procedure.

[Operator Instructions]. And the first question is from Arndt Ellinghorst, Bernstein.

My first question is, Harald, on these BaFin disclosure rules. And I wonder what you might do internally. How can you address these rules? How can you potentially improve your financial steering and your guidance in order to deal with these issues? Because I think we all agree that these constant ad hoc releases are really terrible for the multiple because it sort of expresses as if the industry doesn't know what's going on, and that these results are rather externally driven than part of your guidance. That's my first question. And secondly, you just said your net liquidity leaves you with significant financial flags. Can you be a little bit more specific what strategically you have in mind with respect to the use of excess cash?

Yes. Thanks, Arndt. Well, I mean, on your first point, I do understand that, I mean, ad hocs are not pleasant for anybody, neither for you, nor for us. But the rules are the rules, and we have a very tight interpretation of the BaFin rules. On the other side, I think we need to bear in mind that with 2020, we had significant volatility with COVID. 2021, we have the volatility on the semiconductor. And I think we are in a major journey in terms of cost adjustment and strategic reorientation. I mean, therefore, I mean we have some volatility. Definitely my interest, I mean, to make that more sustainable. I would say, somehow, if you follow Q3, Q4 and Q1 in terms of underlying performance that what you see, and it's maybe better, I mean, to have an upside opportunity rather than a downside. On your second question, in terms of liquidity, I think what we're focused on right now is really, I mean, number one, to continue the journey in terms of cash flow focus, or cash flow culture, we call it internally. There's a campaign ongoing, which is called, I mean, We Are CFO. It does mean that we have 300,000 CFOs, no, but it means that we want each and every employee to be cash flow oriented. And I really see good progress in this direction. That's what you can see also with the Q1 cash flow, I would say. Then comes, certainly, an important mark with the Project Focus where we want to equip both entities with a very solid net cash position. We'll talk about that, I mean, later, obviously, when it comes to the spin-off agreements. And with all of the transformation ahead, definitely, I think it's good to be equipped with that solid, I mean, net cash position, even if you could argue, from a pure metric point of view, that maybe there is, one or the other, I mean, excess cash sitting in there. But at this stage, I think it's good to have that firepower.

And the next question is from Tim Rokossa, Deutsche Bank.

Yes. It's Tim from Deutsche Bank. I also have two, please. And the first one is, Harald, the two of us discussed about this multiple times. You understand the dynamics better than anyone. The capital market always place delta expectations, good returns, create expectations of better ones going forward. So you delivered on promises. You have some interesting catalysts like the spin-off ahead. But the big question that we currently get from investors is, is this the peak. Can margins really only go down from here? What do you say to that? And then secondly, pricing is a key reason why your margins are where they are right now. And it's very strong for everyone currently. Even less market players like Renault yesterday points to that. It's true for new and used cars. I appreciate this is very difficult, but any help here would really be much appreciated by us. Can you help us understand the dynamics around pricing? How much of this is really driven by increased demand for individual mobility? How much is artificially tight supply because of the semi shortage? How much is your own implementation of the different steering system now? How much is the EV push? Any help here would be much appreciated.

Yes. Thanks, Tim. Let me start with the second one as maybe that answers also, to some extent, the first one. There are 2 elements in it, I would say. The one is, yes, I mean, it's happening across the market. I mean as you just outlined before, it's not something which is mainly unique, I mean, to us. We see it among several players, I mean, in the market. And I mean after the Q2 shock of COVID, yes, it seems that there is demand going into passenger cars, in particular, at the higher end, in the premium and the luxury space. I mean that's clearly what we can see. And altogether, I think, I mean, the whole community, the whole industry reacted in a responsible fashion, which means it seems not dumping. I mean the market was material, but adjusting quickly the supply to the demand. And I would say that somehow explains what we could see throughout the second half of 2020 and again in Q1 2021. But I really would like to emphasize that beyond that, we changed course. We changed strategy at our end, as we outlined last year during the strategy update, where we want to focus more on premium, on luxury, but also on profitable growth. And yes, it means that we are not pushing like mad for volumes, and that has a healthy impact. That is a healthy impact on the pricing on the new vehicles. It has a very healthy impact on the residual values, has a very healthy impact also on the level of used vehicles, I mean, in the stock. So that is definitely what I can say for us, what we changed. And how do we do that? I mean I cannot just give you all of the recipe and the details here, obviously, but that means a very, very detailed margin steering in the various markets, in the various products where we decide where we push ahead and where we'd rather go on the break or where we stop. In terms of the margin, your first question, is that the margin peak, well, I mean the margin of 14% Cars & Vans certainly in the Q1 is, I think, is reasonable. But as you can see, with the full year guidance, I mean that's where we see it, I mean, as of today, including the uncertainties I emphasized on the semiconductor issue. And I would say, I mean a margin of 10% to 12% in a -- what do we say before, in a fair or half sunny environment, I mean, is really good to have. We know on the other side that there is still dilution to come from a step-up in the share of electric vehicles. But definitely, definitely, I think, yes, we're starting from a higher base into the journey than we thought, I mean, a year or 2 years ago, definitely. And maybe we start from a higher base as well than we anticipated in summer or in fall 2020. So I think that's a good starting position.

Do you think the industry as a whole will remain price disciplined as soon as the semi shortage is solved?

That's definitely our intention, but I think it would not be appropriate to say more on this call.

The next question is from Patrick Hummel, UBS.

It's Patrick from UBS here. Two questions also from my side. The first one on investments and cash flow. You highlighted your focus on cash generation, We Are a CFO campaign, and the results you've delivered so far are clearly speaking for themselves. I'm just wondering, there are some players in the market that are now accelerating investment in some areas. You have some players that are going more vertically integrated into battery cell manufacturing also because battery cells seem to be tight for years. There is talk about a higher vertical integration also in semiconductor chains, for example. You see some car companies almost acting like venture capitalists and future tech areas. And the market seems to reward that as well. Growth seems to be more relevant than it was for OEMs in the past few years. And free cash flow in a way seems to get a little bit deemphasized. I'm not saying you should give up your free cash flow focus, but I'm just wondering, with the tight framework you've given yourselves as far as the investments are concerned and your CapEx budget for the next few years, is it maybe time to review these CapEx numbers? Do you think you can cut that much elsewhere, that you can still stick to these CapEx numbers and do these growth investments that might be necessary to be fully competitive in the future? And the second question relates to the progression of the chip shortage. Is it fair to say that Q2 will see a worse negative production impact than Q1? And do you still think that ability to steer the chips towards the higher-margin vehicles and the closure or the short working hours in [indiscernible] then payments suggest that's still the case, that you can really allocate the chips to the high-margin products. Is -- do you have that visibility that this will work out also for the remainder of the year? Or might there be some specific chips that will be missing, particularly for the higher-margin segment as well?

Yes. Thanks, Patrick. I mean on your first one, I don't think we are compromising on critical investments in terms of technology change or to enable our strategic objectives to ramp up electric vehicles. Definitely, I mean we constantly monitor and review that. And if we would consider, I mean, any further -- any incremental need, I think we would do. As all know, I think we're still sitting on a significant level of investment. It's not that we're taking that down to 0. I mean we said we will take it down by 25% from -- but from a pretty high level, €15 billion R&D and CapEx. So still, I think that's an impressive number and leaves us, I mean, a lot of opportunities to invest into the right thing. And probably it's kind of a balance -- I mean if we see higher need in investments in these areas, I mean probably it would balance off, i.e., decrease, I mean, further investment or investment needs on the ICE side. However, I think we should -- I mean we look into that carefully, and we don't want to jump, I mean, too quickly here as we still believe in the industrial strategy, which we outlined, which means, I mean, to your point on battery, we want to be deep in technology and research here. That was also the point I made in the intro on the campus to be established here in Stuttgart, where we're just sitting in Untertürkheim. But we don't want to go deep in Fuel Cell, I mean, production as that is probably developing and changing quickly. And our amortization base might not be high enough to justify that level of investment. So rest assured, we will do the right thing. But I mean to be able to do so, first, you need to generate the cash, and that's exactly what this campaign, i.e., the cash flow focus, is about. Second question on semiconductors. I alluded to, I think, in the guidance section that Q2 will probably be further impacted as the events in the first quarter, Texas and Japan, will impact, I mean, production and then sales, I mean, in the second quarter. Then we do expect some recovery, I mean, with the -- in the third and the fourth quarter. Why? At least, I mean, in Texas but also in Japan, we do assume that capacity will come back and that the allocation will be done in a fair manner in line with the contractual, I mean, commitments. Yes, we allocated in favor of the higher-end products, and we'll continue to do so. However, I mean it had some impact there as well, and I cannot exclude that it will impact in the second quarter and for the remainder of the year. And all of these elements, also back to Tim's question before, are factored into this guidance of 10% to 12%, therefore.

The next question is from José Asumendi, JPMorgan. José Asumendi: José, JPMorgan. First, congratulations on the results. I think it's -- I'm sure it hasn't been a walk in a park to get here, and there's always more to deliver, I'm sure. But it's also good to reflect on what you have achieved. A couple of questions. In terms of the fixed cost-reduction plans that you outlined already about more than a year ago, as we think about the auto and the truck division, I believe you wanted to achieve about 20% fixed cost reduction on auto. There was probably about 5% to deliver in 2021. Can you give us an update on where do you stand in this category? And similar also to trucks, how far have you -- what have you achieved so far and a little bit what can be done again in the coming quarters without, obviously, going too much into the May event? And second question, with regards to China, can you talk a little bit about how the second quarter Mercedes-Benz Cars momentum is trending versus Q1? Are you seeing a stable sequentially or maybe small deceleration or acceleration with that regard? And also, if you could comment a bit on the truck side in China. You localized, I believe, your truck for the Chinese truck market, which I think could be, I believe, a game changer in the longer run. So where do you stand on that product launch?

Thanks, José. Yes, it's not a walk in the park. Thanks for your comment in this respect. On the fixed cost, in 2020, I think we said that we came down on Cars & Vans. On Cars, I think it was about 15% from the top of my head, which we disclosed in February. So a large chunk. We also do know that -- I mean some part of that in 2020 was helped and support by short-term working and short-term measures. So definitely, the challenge in 2021, to keep that level of 2020 means it's not a walk in the park, as you need to replenish, I mean, this 2020 measures by sustainable ones. What you see on the Cars & Vans side, I would say, in the Q1, we were able to do so, in particular, on marketing and sales expenses, but also fixed cost, I mean, in the production field and also in the classical, I mean, overhead areas. Well, there's a huge number of measures and set, so that would definitely exceed that call here. But it ranges, I mean, from efficiency, more digitalization, automization, but also up to the point, I mean, that we're just doing things at a less granular level and a bit more focused. I look at my colleagues on the controlling and the reporting side, shortening the forecast cycle, maybe hitting more level of granularity, as Arndt pointed out at the beginning. I mean little stuff and bigger stuff. And I feel comfortable that we are able to continue that journey also in the quarters to come. Maybe on the Truck side, we couldn't see exactly that momentum in the first quarter. In the fourth quarter 2020, however, I think we could really see a good momentum. And I'm sure that in the remainder of the year, we will see that coming through as well on the Truck side. On your China question, it's just great. The second quarter keeps going, keeps going, keeps going. It's really, I think, an issue of availability of the vehicles. Could do probably even more. But here, we're hitting, I mean, the limits of the same issue, the chip issue, as we debated before. And you can see in the full year guidance, so we uplift China from significant to -- no, from slight to significant on the basis of really, I mean, a very high 2020 starting point. So all great here. And in terms of, I mean, the product side, yes, I think you're right. The localization of the actors I mean, in China should give us a great opportunity in the future. So that is definitely, I mean, a market potential where we should capture more. And therefore, that was an important step.

The next question is from Horst Schneider, Bank of America.

Yes. It's Horst here from Bank of America. I have got one main question left. The other one has been partially already answered by you on the Trucks. But first of all, on restructuring, what strikes me is that you continue to book fairly high charges. So I know it's always difficult for you to talk about this personnel cost-saving issue. But maybe can you tell us what level of savings you would expect this year but then also the year thereafter? Just provide an update on these personnel cost savings. And then also how many more charges you plan to book in the next few quarters. And when should we expect these payouts to happen? And also, maybe you can provide a little bit of split in, I mean, how is it going to be booked -- or these savings, how they materialize by division. Then on Daimler Trucks again, what I'm surprised about, looking at this strong level of order intake, that you have not raised the guidance for Daimler Truck because you said at the full year '20 call already that the guidance is rather cautious. Just want to know how I should think about that. Maybe you just want to keep your ammunition for the CMD. I would understand that. But maybe you can just reiterate if the guidance is still cautious or not On Daimler Truck.

Thanks, Horst. So on the restructuring, well, I mean let me share with you, it's a difficult decision, I mean, to sign, I mean, pretty high checks per employee. But I mean a large chunk of, I mean, the overhead, the white-collar reduction in the indirect area, we were doing, I mean, sitting in Germany. And I think you know the rules of the game. So you have a certain set of levers at hand. I mean we are not in the U.S., so we're not in the U.K., in other parts of the world. So it is expensive. But we have determined that we want to improve the underlying performance of the company. And therefore, I mean we have to swallow that pill. There is a clear trade-off. There's a clear breakeven. There is a clear payback of that. I mean, otherwise, we would not do that. However, it tells us something. It would be definitely stupid to do that if we would ramp up fixed cost and people, again, in a year or 2 from now. So by spending that amount of money, we have to keep the fixed cost low, reduce it even further with these measures, making use of the other levers, in particular, I mean, the attrition. However, maybe to give you a bit of comfort, the program will continue. But you could see somehow, I mean, a high amount in the Q1 as the as called turbocharger ended by the end of March. And that made, I mean, a couple of people, I mean, sign up to these agreements. So I don't expect the same pace in terms of signing up in the remainder of the year as we could see in the Q1. But again, we are committed to take the fixed cost down. Therefore, we invest into that key thing. We have to keep, therefore, the fixed cost on a sustainable low basis. Otherwise, we would do stupid things.

Harald, can you say how many people have signed up by now?

I think we're not disclosing that. I mean then...

All right. No problem.

It's too easy to do the math. On the Truck side, yes, well spotted. Well, let's see what the Truck management team will say on the 20th of May. No, I don't want to raise expectation. But on the commercial side, I can say very clearly, the demand level is extremely strong in the U.S., in Europe, also in Asia. So -- but the key thing is U.S. and Europe. You can see that on the charts. I mean with the orders, with a book-to-bill of 150%, I emphasize. And therefore, yes, I mean we have the visibility that, I mean, we could turn that also into sales. Why do we stay a bit more cautious here on the sales side, I mean, for the years? I mean it's -- again, it's a semiconductor issue, where, I mean, from today's standpoint, it impacts, I mean, Truck as well. The impact in the Q1 was maybe more remote. But definitely, we see the impact for the trucks in the remainder year as well. That's why maybe not all of the commercial opportunities can be materialized, and that's why we stick with the guidance here. But as I said, we see it at the higher end.

And the final question for today is from Dorothee Cresswell, Exane.

I wanted to ask about two aspects of the electrification strategy. So we've recently seen your nearest competitors announce new electrification targets and specifically BEE rather than SUV aspirations. And as you know, others have committed to a complete ICE phase-out by a certain date. Should we expect you to adjust your official excitation target, too, some time in the near future? And then could you give us your latest guidance on when you expect to reach the BEE profitability tipping point? I think in the past, you've said it could be by the end of the decade. But again, others seem to think it could be within 3, 4 years or so. So I'm wondering where your relative caution comes from.

Yes. Thank you for that one. Usually, that was the first question in the last meetings. So thanks to raise it. That is, definitely, I mean, our strategic priority. You can see very clearly from the product presentations and now the experience of the vehicles being in the market that we are very serious to go into the direction of BEV and BEV only. Basically, it started, I mean, 2 years ago with the announcement of this Ambition 2039. Since then, so much happened in terms of adjusting, I mean, switching gears towards the BEV-only journey. Now we have these products. So we have industrial flexibility. You know that the EQS comes off the same line as the S-Class here in Stuttgart. So we can ramp up we can also ramp up quicker. We are very delighted, therefore, to see the customer feedback and the endorsement over the last weeks on the EQS. So I think now is a really, really interesting juncture, where we might see an acceleration. I'm not sure it makes a lot of sense, I mean, to go for the headline in terms of when do you stop the last ICE engine in the valley. What matters is to have the great product at hand. That's what we're doing. More to come in terms of the products. And also, we're getting ready industrially to raise the bar. So stay tuned, I mean, on that one. On the margin side, what you can see, I would say, in the -- with the first quarter results, we have about, I mean, 10% of electric vehicle sales in the total sales number and, despite that, have a 14% margin. We have a significant share. I mean in the full year, we said, I think, we go to about 13% on the full year, and we give a guidance of 10% to 12%. So I feel much more comfortable today than a year or 2 ago that we can accommodate the step-up of the electric vehicles without a too-strong margin dilution. Are we at parity, margin parity today? No, we're not, but progressively, we're making progress. And I will not disclose what our target is here now, but definitely, being at margin parity is not only at the end of the decade. It has to be before.

So ladies and gentlemen, thank you very much for your questions and for being with us today. And also, thank you, Harald, a lot for your answers. Now Investor Relations remains at your disposal to answer any further questions you might have. To all of you, have a great morning, great afternoon or great evening, and we look forward to talking to you soon. Thanks, and goodbye.