Q2 2026 Daimler Truck Holding AG Earnings Call

August 7, 2026

Speaker #1: Good morning, everyone, and welcome to Daimler Truck’s Q2 2026 earnings call. I’m Marcus Poppe, Head of Investor Relations at Daimler Truck. On behalf of Daimler Truck, I would like to welcome you to our Q2 earnings global conference call.

Marcus Poppe: Good morning, everyone, and welcome to Daimler Truck's Q2 2026 earnings call. I am Marcus Poppe, Head of Investor Relations at Daimler Truck. On behalf of Daimler Truck, I would like to welcome you to our Q2 earnings global conference call. Joining me today are Karin Rådström, our CEO, and Eva Scherer, our CFO. Karin and Eva will begin with an introduction directly followed by a Q&A session. The presentation is available on Daimler Truck Investor Relations website. Please note that 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 Truck website. I would like to remind you that this teleconference is governed by the safe harbor wording you will find in our published results documents.

Speaker #1: Joining me today are Karin Radström, our CEO, and Eva Scherer, our CFO. Karin and Eva will begin with an introduction, directly followed by a Q&A session.

Speaker #1: The presentation is available on the Daimler Truck Investor Relations website. Please note that 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 Truck website.

Speaker #1: I would like to remind you that this teleconference is governed by the Safe Harbor wording you will find in our published results documents. Please note that our presentation contains forward-looking statements that reflect management's current views with respect to future events; such statements are subject to many risks and uncertainties.

Marcus Poppe: Please note that our presentation contains 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, 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. With that, let's jump into the results. Karin and Eva will walk you through how the quarter developed, and after that, we will open things up for analyst questions, followed by the media. Karin, over to you. Thank you.

Speaker #1: If the assumptions underlying any of these statements prove incorrect, actual results may be materially different from those expressed or implied by such statements. Forward-looking statements speak only as of the date on which they are made.

Speaker #1: With that, let's jump into the results. Karin and Eva will walk you through how the quarter developed, and after that, we will open things up for analysts' questions, followed by the media.

Speaker #1: Karin? Over to you. Thank you.

Speaker #2: Thanks, Marcus, and good morning, everyone. Let me start by sharing the key figures for the quarter. For the group, we generated €12.3 billion in revenue, up 5%, with adjusted EBIT of around €800 million and a net profit of €1.5 billion.

Karin Rådström: Thanks, Marcus, and good morning, everyone. Let me start by sharing the key figures for the quarter. For the group, we generated EUR 12.3 billion in revenue, up 5%, with adjusted EBIT of around EUR 800 million and a net profit of €1.5 billion. Earnings per share from continuing and discontinued operations amounted to €1.91. Our balance sheet remains strong, with a net industrial liquidity of EUR 8.3 billion. I also brought some business highlights for you. As you might have seen, we pre-released our Q2 results and raised our full year guidance two weeks ago. This increase reflects the strong performance of Trucks North America, driven both by higher expected unit sales for the remainder of the year and the approval of Daimler Truck's US content application. Another important milestone in Q2 was the launch of Daimler Truck Defense.

Speaker #2: Earnings per share from continuing and discontinued operations amounted to 1 euro and 91 cents. Our balance sheet remains strong, with a net industrial liquidity of 8.3 billion.

Speaker #2: I also brought some business highlights for you. As you might have seen, we pre-released our second quarter results and raised our full-year guidance two weeks ago.

Speaker #2: This increase reflects the strong performance of Truck's North America, driven both by higher expected unit sales for the remainder of the year and the approval of Daimler Truck's U.S.

Speaker #2: Another important milestone in Q2 was the launch of DAIMLER TRUCK Defense. By bringing our defense activities together under one global brand, we can make better use of our global engineering expertise, manufacturing network, sales organization, and service capabilities across the whole group.

Karin Rådström: By bringing our defense activities together under one global brand, we can make better use of our global engineering expertise, manufacturing network, sales organization, and service capabilities across the whole group as we continue to grow this business with the ambition of reaching €1 billion in defense-related revenue by 2028. Another area where we continue to make progress is our Mercedes-Benz Own Retail strategy. The expansion of our service network is helping us to stay close to our customers and grow service revenue. In Q2, one big highlight was the integration of eStar Truck & Van in the UK, which adds six new locations to our network. The retail investments are helping us build a stronger, more truck-focused service network, and of course, also supports our ambition to significantly expand our retail presence by 2030. We also continue to invest in the future of our business.

Speaker #2: As we continue to grow this business with the ambition of reaching €1 billion in defense-related revenue by 2028, another area where we continue to make progress is our Mercedes-Benz-owned retail strategy.

Speaker #2: The expansion of our service networks is helping us stay close to our customers and grow service revenue. In the second quarter, one big highlight was the integration of eStar in the UK, which adds six new locations to our network.

Speaker #2: The retail investments are helping us build a stronger, more truck-focused service network, and of course, also support our ambition to significantly expand our retail presence by 2030.

Speaker #2: We also continue to invest in the future of our business. Last night, we announced a new U.S. manufacturing facility. This investment gives us the rare opportunity to start with a blank sheet of paper and create a state-of-the-art facility, which will be designed around the latest manufacturing technologies: a flexible production system, and, of course, the product that will define our future.

Karin Rådström: Last night, we announced a new US manufacturing facility. This investment gives us the rare opportunity to start with a blank sheet of paper and create a state-of-the-art facility, which will be designed around the latest manufacturing technologies, a flexible production system, and of course, the products that will define our future. Start of production is planned for late 2029. This is a long-term investment, which reflects our confidence in the US market and our commitment to strengthening our manufacturing footprint. The new facility will help create a production network that's more flexible, resilient, and positioned to support future growth. Turning to our industrial business performance. Revenue increased 6% year-over-year to EUR 11.4 billion. At the same time, adjusted EBIT declined 22% to EUR 780 million, and adjusted return on sales came in at 6.8% compared to 9.2% in the prior-year quarter.

Speaker #2: Startup production is planned for late 2029, so this is a long-term investment, which reflects our confidence in the U.S. market and our commitment to strengthening our manufacturing footprint.

Speaker #2: The new facility will help create a production network that's more flexible, resilient, and positioned to support future growth. Turning to our industrial business performance.

Speaker #2: Revenue increased 6% year over year to €11.4 billion. At the same time, adjusted EBIT declined 22% to €780 million, and adjusted return on sales came in at 6.8%, compared to 9.2% in the prior year quarter.

Speaker #2: The year-over-year decline in earnings was driven by North America, mainly due to the ongoing tariff headwinds that were significantly higher than in the second quarter last year.

Karin Rådström: The year-over-year decline in earnings was driven by North America, mainly due to the ongoing tariff headwinds that were significantly higher than in Q2 last year. This more than offset the positive earnings contributions from Mercedes-Benz Trucks and Daimler Buses. At Mercedes-Benz, we remained disciplined on cost, and our Cost Down year program remains on track. At the same time, we're making significant investments in R&D, with a large share flowing directly through the P&L and therefore affecting current earnings. It's in line with our commitments that we talked about in our Capital Markets Day last year. Now to orders. Incoming orders remained at a healthy level in Q2, reaching around 74,000 units, which is up 27% year-over-year.

Speaker #2: This more than offset the positive earnings contributions from Mercedes-Benz Trucks and Daimler Buses. At Mercedes-Benz, we remained disciplined on cost, and our cost-down euro program remains on track.

Speaker #2: At the same time, we're making significant investments in research and development, with a large share flowing directly through the P&L and therefore affecting current earnings.

Speaker #2: It's in line with our commitments that we talked about in our Capital Market Day last year. Now, to orders. Incoming orders remained at a healthy level in the second quarter, reaching around 74,000 units, which is up 27% year over year.

Speaker #2: The 35% sequential decline from Q1 reflects a normalization following our exceptionally strong first quarter and does not indicate a change in the underlying market environment.

Karin Rådström: The 35% sequential decline from Q1 reflects a normalization following our exceptionally strong Q1 and does not indicate a change in the underlying market environment. Unit sales were up 8% year-over-year, totaling around 87,000 units for Q2, resulting in a book-to-bill of 86%. The backlog decreased compared to Q1, but remained on a very healthy level at approximately 50% above last year and well above historical averages. We have good visibility for the remainder of 2026. Our zero-emission sales increased to around 1,400 units in Q2, up 21% year-over-year. Now turning to our markets. We continue to hold leading positions in both of our key regions. In North America, the Class 8 market totaled 66,000 units in Q2, down 6% year-over-year.

Speaker #2: Unit sales were up 8% year over year, totaling around 87,000 units for Q2, resulting in a book-to-bill of 86%. The backlog decreased compared to the first quarter but remained at a very healthy level—approximately 50% above last year and well above historical averages.

Speaker #2: So we have good visibility for the remainder of 2026. Our zero-emission sales increased to around 1,400 units in the second quarter, up 21% year over year.

Speaker #2: Now turning to our markets. We continue to hold leading positions in both of our key regions. In North America, the Class 8 market totaled 66,000 units in the second quarter, down 6% year over year.

Speaker #2: What’s encouraging is that order activity remains supportive, and we are confident in a strong second half of the year. At the same time, the market remains below previous cycle highs.

Karin Rådström: What's encouraging is that order activity remains supportive, and we are confident in a strong H2. At the same time, the market remains below previous cycle highs, and retail sales are still running below last year's levels following the soft start to 2026. With a market share of 38% year-to-date, we maintained our leading position in the market. In Europe, the heavy-duty market expanded by 10% year-over-year to approximately 164,000 units. Growth was supported mainly by strong demand in Spain, Poland, and Lithuania, while some of our major markets like Germany, France, and the UK remained below market average year-to-date. We further strengthened our leadership position in Europe's medium and heavy-duty segments, achieving an overall market share of 18.9%. In zero-emission trucks, we achieved around 38% share of the European heavy-duty segment in H1 2026.

Speaker #2: And retail sales are still running below last year's levels, following the soft start to 2026. With a market share of 38% year to date, we maintained our leading position in the market.

Speaker #2: In Europe, the heavy-duty market expanded by 10% year over year to approximately 164,000 units. Growth was supported mainly by strong demand in Spain, Poland, and Lithuania.

Speaker #2: While some of our major markets, like Germany, France, and the UK, remained below market average year-to-date, we further strengthened our leadership position in Europe's medium and heavy-duty segments, achieving an overall market share of 18.9%.

Speaker #2: In zero-emission trucks, we achieved around 38% share of the European heavy-duty segment in the first half of 2026, so we are clearly leading. Even though zero-emission truck adoption in Europe remains at an early stage, registrations increased to around 6% of total registrations in Q2, which is up from approximately 2% in the previous quarter and in 2025.

Karin Rådström: We are clearly leading. Even though zero-emission truck adoption in Europe remains at an early stage, registrations increased to around 6% of total registrations in Q2, which is up from approximately 2% in the previous quarter and in 2025. We believe we are well positioned to benefit from the continued transition towards sustainable transportation. We are seeing very different dynamics across our markets, but our competitive position remains strong. Now handing over to you, Eva, to take us through the individual segments and some of the drivers behind the results.

Speaker #2: We believe we are well positioned to benefit from the continued transition towards sustainable transportation. We're seeing very different dynamics across our markets, but our competitive position remains strong.

Speaker #2: Now handing over to you, Eva, to take us through the individual segments and some of the drivers behind the results.

Speaker #1: Thank you, Karen, and good morning, everyone. Let me start with Trucks North America. In the second quarter, revenue increased by 2% year over year to around €5.2 billion, driven by an 8% increase in unit sales.

Eva Scherer: Thank you, Karin, and good morning, everyone. Let me start with Trucks North America. In Q2, revenue increased by 2% year over year to around EUR 5.2 billion, driven by an 8% increase in unit sales. Compared to Q1, revenue was up 35%. Adjusted EBIT more than doubled from Q1, increasing to EUR 435 million from EUR 209 million. Adjusted return on sales improved from 5.4% to 8.4%. While profitability remained below last year's strong level of 12.9% due to significant tariff headwinds, we benefited from higher volumes, pricing actions, and continued cost discipline. Order intake reached more than 35,000 units during the quarter, up 156% year over year. Demand in North America remains very healthy, and fleet replacement continues as freight conditions normalize.

Speaker #1: Compared to the first quarter, revenue was up 35%. Adjusted EBIT more than doubled from the first quarter, increasing to €435 million from €209 million.

Speaker #1: Adjusted return on sales improved from 5.4% to 8.4%, while profitability remained below last year's strong level of 12.9% due to significant tariff headwinds. We benefited from higher volumes, pricing actions, and continued cost discipline.

Speaker #1: Order intake reached more than 35,000 units during the quarter, up 156% year over year. Demand in North America remains very healthy, and fleet replacement continues as freight conditions normalize.

Speaker #1: Moreover, since the beginning of the third quarter, we have seen increased activity from our rental, leasing, and other large fleet customers, resulting in a July Class 8 order share of 45%.

Eva Scherer: Moreover, since the beginning of Q3, we have seen increased activity from our rental, leasing, and other large fleet customers, resulting in a July Class 8 order share of 45%. At Mercedes-Benz Trucks, revenue increased to EUR 5.3 billion, up 10% year over year and 15% compared to Q1. Adjusted EBIT increased to EUR 317 million from EUR 283 million a year ago, resulting in an adjusted return on sales of 6%. Group sales increased 10% to nearly 39,000 units, supported by stronger market conditions in Europe. Order intake reached around 34,000 units, a decrease of 11% year over year. In Europe, demand remains solid and group sales increased by 36%. Profitability benefited from higher volumes and ongoing progress under our Cost Down Europe program.

Speaker #1: At Mercedes-Benz Trucks, revenue increased to €5.3 billion, up 10% year over year and 15% compared to the first quarter. Adjusted EBIT increased to €317 million from €283 million a year ago, resulting in an adjusted return on sales of 6%.

Speaker #1: Group sales increased 10% to nearly 39,000 units, supported by stronger market conditions in Europe. Order intake reached around 34,000 units, a decrease of 11% year over year.

Speaker #1: In Europe, demand remains solid, and Group sales increased by 36%. Profitability benefited from higher volumes and ongoing progress under our Cost Down Europe program. At the same time, earnings were affected by the ramp-up of our new global parts distribution center in Halberstadt, and higher research and development costs in the P&L, driven by a reduced capitalization rate of 10.7%, down from 17.7% in the second quarter of 2025.

Eva Scherer: At the same time, earnings were affected by the ramp-up of our new global parts distribution center in Halberstadt and higher research and development costs in the P&L, driven by a reduced capitalization rate of 10.7% from 17.7% in Q2 2025. Due to increased inflationary headwinds, net price costs remained negative in Q2. As we expect cost pressures to increase in H2, we have introduced additional pricing measures. In Latin America, market conditions remain challenging. While Brazil showed signs of stabilization during the quarter, supported by the Mover Brasil program, the overall market remained 10% below prior year levels. Argentina remained under pressure, adding further challenges across the region. As a result, profitability declined year over year, despite continued pricing actions and cost measures.

Speaker #1: Due to increased inflationary headwinds, net price costs remained negative in the second quarter. As we expect cost pressures to increase in the second half of the year, we have introduced additional pricing measures.

Speaker #1: In Latin America, market conditions remained challenging. While Brazil showed signs of stabilization during the quarter, supported by the Move Brazil program, the overall market remained 10% below prior year levels.

Speaker #1: Argentina remained under pressure, adding further challenges across the region. As a result, profitability declined year over year, despite continued pricing actions and cost measures.

Speaker #1: In India, market demand remained above last year's levels, supported by ongoing replacement activity and healthy domestic orders. Revenue of Daimler Buses increased 6% year-over-year to €1.6 billion, reflecting positive net price-cost development, continued growth in our service business, and favorable foreign exchange effects.

Eva Scherer: In India, market demand remained above last year's level, supported by ongoing replacement activity and healthy domestic orders. Revenue of Daimler Buses increased 6% year over year to EUR 1.6 billion, reflecting positive net price cost development, continued growth in our service business, and favorable foreign exchange effects. Adjusted EBIT increased to EUR 150 million compared to EUR 147 million a year ago, resulting in an adjusted return on sales of 9.6%. Order intake reached around 5,300 units, a decrease of 25% year over year, and a book-to-bill ratio of 86%. Unit sales declined primarily due to weaker demand in our chassis business in Latin America and Mexico. At the same time, our integral bus business in Europe continued to perform well. While sales volumes were below the prior year level, profitability remained strong, highlighting the improved resilience of the business.

Speaker #1: Adjusted EBIT increased to €150 million, compared to €147 million a year ago, resulting in an adjusted return on sales of 9.6%. Order intake reached around 5,300 units, a decrease of 25% year over year, and a book-to-bill ratio of 86%.

Speaker #1: Unit sales declined, primarily due to weaker demand in our chassis business in Latin America and Mexico. At the same time, our integral bus business in Europe continued to perform well.

Speaker #1: While sales volumes were below the prior year level, profitability remained strong, highlighting the improved resilience of the business. Strong demand in Europe helped offset weaker market conditions in Latin America and Mexico, as well as ongoing cost headwinds and high inflation in Turkey.

Eva Scherer: Strong demand in Europe helped offset weaker market conditions in Latin America and Mexico, as well as ongoing cost headwinds and high inflation in Turkey. While these circumstances led us to lower our 2026 unit sales outlook, we continue to generate strong financial results. At Daimler Truck Financial Services, return on equity improved significantly in Q2. Adjusted EBIT increased to EUR 58 million, compared to EUR 23 million in the prior year quarter and EUR 39 million in Q1. At the same time, adjusted return on equity more than doubled year over year, increasing from 3.1% to 7.5%. The improvement was driven by a stronger interest margin and a more favorable credit risk environment. In North America, improving freight rates and stronger used truck market also contributed positively. Turning to ARCHION, the transaction continues to progress as planned.

Speaker #1: While these circumstances led us to lower our 2026 unit sales outlook, we continue to generate strong financial results. At Daimler Truck Financial Services, return on equity improved significantly in the second quarter.

Speaker #1: Adjusted EBIT increased to €58 million, compared to €23 million in the prior-year quarter and €39 million in the first quarter. At the same time, adjusted return on equity more than doubled year over year, increasing from 3.1% to 7.5%.

Speaker #1: The improvement was driven by a stronger interest margin and a more favorable credit risk environment. In North America, improving freight rates and a stronger used truck market also contributed positively.

Speaker #1: Turning to Archeon, the transaction continues to progress as planned. Following the closing on April 1, we received approximately €1.4 billion in cash. Considering the deconsolidation of the Mitsubishi Fuso cash of €0.3 billion, the net positive cash flow was €1.1 billion.

Eva Scherer: Following the closing on 1 April, we received approximately EUR 1.4 billion in cash. Considering the deconsolidation of the Mitsubishi Fuso cash of EUR 0.3 billion, the net positive cash flow was EUR 1.1 billion. We are now in the final stages of reducing our shareholding to 25%, which is expected to generate an additional cash inflow of EUR 500 to EUR 600 million. This step supports ARCHION's transition as an independent listed company and its inclusion in the Prime Market segment of the Tokyo Stock Exchange. The final proceeds from the ARCHION transaction will depend on the outcome of the over-allotment option and will be confirmed after 14 August. In Q2, our at equity participation in ARCHION contributed EUR 24 million to adjusted EBIT. In reported EBIT, we recorded a gain in the amount of EUR 1.4 billion after deconsolidation and recognition of the at equity book value as of 1 April.

Speaker #1: We are now in the final stages of reducing our shareholding to 25%, which is expected to generate an additional cash inflow of €500 to €600 million.

Speaker #1: This step supports Archeon's transition as an independent, listed company and its inclusion in the Prime Standard segment of the Tokyo Stock Exchange. The final proceeds from the Archeon transaction will depend on the outcome of the overallotment option and will be confirmed after August 14.

Speaker #1: In the second quarter, our Ad Equity participation in Archeon contributed €24 million to adjusted EBIT. In reported EBIT, we recorded a gain in the amount of deconsolidation and recognition of the Ad Equity book value as of April 1.

Speaker #1: As of June 30, we adjusted the carrying value of our Archeon investment from the initial valuation to the recoverable amount and recognized an impairment loss of €297 million in Q2 within the ad equity result.

Eva Scherer: As of 30 June, we adjusted the carrying value of our ARCHION investment from the initial valuation to the recoverable amount and recognized an impairment loss of EUR 297 million in Q2 within the at equity result. The ARCHION shares classified as held for sale were measured at fair value less cost to sell, resulting in an impairment of EUR 222 million. Please note that the gain was recorded in discontinued activities while the impairment was recorded in continuing activities. The net impact is positive in the amount of EUR 953 million. In Q2, we generated a very strong industrial business free cash flow of around EUR 1.8 billion compared to EUR 20 million in the prior year quarter. In addition to the cash inflow from the ARCHION transaction, our operating cash flow in Q2 was supported by improved working capital management, primarily reflecting optimization of payment terms.

Speaker #1: The Archeon sale, the Archeon shares classified as held for sale, were measured at fair value less costs to sell, resulting in an impairment. Please note that the gain was recorded in discontinued activities, while the impairment was recorded in continuing activities. The net impact is positive, in the amount of €953 million.

Speaker #1: In the second quarter, we generated a very strong industrial business free cash flow of around €1.8 billion, compared to €20 million in the prior year quarter.

Speaker #1: In addition to the cash inflow from the Archeon transaction, our operating cash flow in the second quarter was supported by improved working capital management, primarily reflecting optimization of payment terms.

Speaker #1: As a result, net industrial liquidity increased from €7.1 billion at the end of the first quarter to €8.3 billion at the end of the second quarter. This improvement was achieved despite dividend payments of approximately €1.5 billion and our ongoing share buyback program.

Eva Scherer: As a result, net industrial liquidity increased from EUR 7.1 billion at the end of Q1 to EUR 8.3 billion at the end of Q2. This improvement was achieved despite dividend payments of approximately EUR 1.5 billion and our ongoing share buyback program. Given our strong liquidity position, we intend to launch the second tranche of our ongoing share buyback program immediately after completion of the first tranche, which is expected no later than 16 September. The second tranche is planned to be completed no later than 30 June 2027, with a volume of up to €1.1 billion. Let me turn to our guidance. Before discussing the changes to our full-year outlook, let me briefly revisit the assumptions that underpin our guidance.

Speaker #1: Given our strong liquidity position, we intend to launch the second tranche of our ongoing share buyback program immediately after completion of the first tranche, which is expected no later than September 16.

Speaker #1: The second tranche is planned to be completed no later than June 30, 2027, with a volume of up to €1.1 billion. Now, let me turn to our guidance.

Speaker #1: Before discussing the changes to our full-year outlook, let me briefly revisit the assumptions that underpin our guidance. We continue to expect the North American heavy-duty truck market to land between 250,000 and 290,000 units, with a pickup in the second half of the year supported by replacement demand.

Eva Scherer: We continue to expect the North American heavy-duty truck market to land between 250,000 and 290,000 units, with a pickup in the second half of the year supported by replacement demand. For the EU 30 market, we expect a range of 290,000 and 330,000 units. To date, the Middle East conflict has had only a limited impact on truck demand and global supply chains. Looking ahead, any broader impact will largely depend on the duration of the conflict and could vary by region. At present, macroeconomic indicators point to a more constructive outlook in North America, while sentiment in Europe is stabilizing. As always, our guidance is based on current market assumptions, including the existing USMCA and tariff framework. As Karin mentioned, we raised our full-year outlook for 2026. Let me walk you through the changes. At group level, we now expect adjusted EBIT of €3.6 to €4.1 billion.

Speaker #1: For the EU30 market, we expect a range of 330,000 units. To date, the Middle East conflict has had only a limited impact on truck demand and global supply chains.

Speaker #1: Looking ahead, any broader impact will largely depend on the duration of the conflict and could vary by region. At present, macroeconomic indicators point to a more constructive outlook in North America, while sentiment in Europe is stabilizing.

Speaker #1: As always, our guidance is based on current market assumptions, including the existing USMCA and tariff framework. As Karen mentioned, we raised our full-year outlook for 2026.

Speaker #1: Let me walk you through the changes. At group level, we now expect adjusted EBIT of €3.6 to €4.1 billion. For the industrial business, we now expect unit sales of 340,000 to 370,000 vehicles.

Eva Scherer: For the industrial business, we now expect unit sales of 340,000 to 370,000 vehicles, revenue of €43 to €47 billion, and an adjusted return on sales of 7% to 9%, all above our previous guidance range. We have also increased our free cash flow outlook to between EUR 3 and EUR 3.5 billion. The driver of this upgrade is Trucks North America. Based on the lower anticipated tariff impact, higher expected sales volumes, and including closure costs of our Portland manufacturing plant, we now guide for return on sales of 9% to 11% and unit sales of 160,000 to 180,000 vehicles for the full year 2026. For Q3, we expect profitability to be between 11% and 13%. For Mercedes-Benz Trucks, we continue to expect a return on sales of 6% to 8%.

Speaker #1: Revenue of €43 to €47 billion, and an adjusted return on sales of 7% to 9%, all above our previous guidance range. We have also increased our free cash flow outlook to between €3 and €3.5 billion.

Speaker #1: The driver of this upgrade is Trucks North America. Based on the lower anticipated tariff impact, higher expected sales volumes, and including closure costs of our Portland manufacturing plant, we now guide for return on sales of 9% to 11%, and unit sales of 160,000 to 180,000 vehicles, for the full year 2026.

Speaker #1: For the third quarter, we expect profitability to be between 11% and 13%. For Mercedes-Benz Trucks, we continue to expect a return on sales of 6% to 8%.

Speaker #1: For the third quarter, we currently expect profitability to be in the lower half of the range, reflecting sequentially higher material costs and the resulting negative net price-cost effect.

Eva Scherer: For Q3, we currently expect profitability to be in the lower half of the range, reflecting sequentially higher material costs and the resulting negative net price cost effect. For Daimler Buses, continued weakness in Latin America and Mexico has led us to lower our full-year unit sales outlook to between 20,000 and 25,000 units. All other guidance items remain unchanged. For Q3, we expect profitability in the upper half of the guidance range. Financial Services remains on track, and we continue to expect an adjusted return on equity of 6% to 8% in 2026. Overall, Q2 marked a turning point for Daimler Truck. The actions we have taken, together with improving market conditions and a stronger outlook for Trucks North America, increase our confidence that the positive trajectory established during the quarter will accelerate significantly in Q3.

Speaker #1: For Daimler Buses, continued weakness in Latin America and Mexico has led us to lower our full-year unit sales outlook to between 20,000 and 25,000 units. All other guidance items remain unchanged.

Speaker #1: For the third quarter, we expect profitability in the upper half of the guidance range. Financial Services remains on track, and we continue to expect an adjusted return on equity of 6 to 8% in 2026.

Speaker #1: Overall, the second quarter marked a turning point for Daimler Truck. The actions we have taken, together with improving market conditions and a stronger outlook for trucks in North America, increase our confidence that the positive trajectory established during the quarter will accelerate significantly in the third quarter. And with that, Marcus, I think we're at a good point to open it up for questions.

Eva Scherer: With that, Marcus, I think we are at a good point to open it up for questions.

Speaker #2: Thank you, Karen and Eva. That concludes our presentation for Q2 results. As usual, we will start with questions from analysts, then move on to the media. Both sessions will be recorded and made available on our website.

Marcus Poppe: Thank you, Karin and Eva. That concludes our presentation for Q2 results. As usual, we will start with questions from analysts, move on to the media. Both sessions will be recorded and made available on our website. Before we start, the operator will explain the procedure.

Speaker #2: Before we start, the operator will explain the procedure.

Operator: Good morning, ladies and gentlemen, and welcome to the Q&A part of today Q2 results global conference call. I would like to remind you that this Q&A session will be recorded on Daimler Truck request. The replay of the conference call will also be available as on-demand audio webcast in the investor relations section on the Daimler Truck website.

Speaker #3: Gentlemen, welcome to the Q&A part of today's Q2 results global conference call. I would like to remind you that this Q&A session will be recorded at Daimler Truck's request.

Speaker #3: The replay of the conference call will also be available as an on-demand audio webcast in the Investor Relations section on the Daimler Truck website.

Speaker #3: A few practical points: Please ask your questions in English. Please also introduce yourself and the organization you represent. As a matter of fairness, please limit the number of questions to a maximum of two.

Operator: A few practical points. Please ask your question in English. Please also introduce yourself and the organization you are representing. As a matter of fairness, please limit the amount of questions to a maximum of two. Anyone who wishes to ask a question may press star followed by one on the telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using speaker equipment today, please lift a hand before making your selection. Please mute the sound of the internet stream while you are asking your question on the telephone. We will now begin the question and answer session.

Speaker #3: Anyone who wishes to ask a question may press star, followed by one, on the telephone. If you wish to remove yourself from the question queue, you may press star, followed by two.

Speaker #3: If you are using speaker equipment today, please lift the handset before making your selection. Please mute the sound of the internet stream while you are asking your question on the telephone.

Speaker #3: We will now begin the question and answer session.

Speaker #2: So, our first question comes from Nikolai Kempf at Deutsche Bank. Good morning, Nikolai.

Marcus Poppe: Our first question comes from Nicolai Kempf at Deutsche Bank. Good morning, Nikolai.

Speaker #4: Yeah, good morning, Karen, Eva, Marcus. It's Nikolai here from Deutsche Bank. Thank you for taking my question, and well done for a solid quarter.

Nicolai Kempf: Good morning, Karin, Eva, Marcus. It is Nikolai here from Deutsche Bank. Thank you for taking my question. Well done for a solid quarter. Two questions from my side. The first one, the plan to build a new production in the US. I know it is early days, but will you try to adjust your overall production capacity in North America once this plant is up and running? My second one is on Mercedes-Benz Trucks, and especially the possibility in Q3, which appears a bit soft, for example, some of your Swedish peers have already raised prices twice this year to offset the higher input costs. Was the market not ready to accept higher price for Mercedes-Benz Trucks, or have you been a bit too late to raise prices? Thank you.

Speaker #4: Two questions from my side. The first one: the plan to build a new production facility in the US. I know it's early days, but will you try to adjust your overall production capacity in North America once this plant is up and running?

Speaker #4: And my second one is on Mercedes, and especially the possibility in Q3, which appears a bit soft. For example, some of your Swedish peers have already raised prices twice this year.

Speaker #4: To offset the higher input costs. So, was the market not ready to accept a higher price for Mercedes, or have you been a bit too late to raise prices?

Speaker #4: Thank you.

Speaker #3: Hey Nikolai, Karen here. I'll take the first one, and then I think Eva can do the second one. So yes, it's early days with this plant, but it is a plant, of course, which will increase our overall production capacity in the North American market.

Karin Rådström: Hey, Nikolai. Karin here. I will take the first one, and then I think Eva can do the second one. Yes, it is early days with this plant, but it is a plant, of course, which will increase our overall production capacity in the North American market. For now, we do not have any plans to shut down any other factory sites. We do this out of a strategic position and giving us much more flexibility, both on how we distribute volumes across our network, but also with room to grow into the future, which we believe we have potential to do.

Speaker #3: But for now, we don't have any plans to shut down any other factory sites. But we do this out of a strategic position, giving us much more flexibility—both in how we distribute volumes across our network and with room to grow into the future, which we believe we have the potential to do.

Speaker #5: Hi, Nikolai, from my side, and thanks for your question. So, on the price increases, we actually, in fact, also did communicate two price increases in 2026.

Eva Scherer: Hi, Nikolai, from my side, and thanks for your question. On the price increases, we actually, in fact, also did communicate two price increases in 2026. The first one in March. This will then only materialize in our P&L in Q4 because Q2 and Q3 were largely booked at this point in time. Then also now in July, we communicated a second price increase, which will then start hitting our P&L positively in Q1 next year.

Speaker #5: The first one is in March. But this will then only materialize in our P&L in Q4, because Q2 and Q3 were largely booked at this point in time.

Speaker #5: And then also now in July, we communicated a second price increase, which will then start hitting our P&L positively in Q1 next year.

Speaker #4: Sure, thank you.

Nicolai Kempf: Sure. Thank you.

Speaker #2: Next question comes from Klaas Bergland at Citi. Good morning, Klaas.

Marcus Poppe: Next question comes from Klas Bergelind at Citi. Good morning, Klas.

Speaker #6: Morning, Marcus. Hi, Karen and Eva. Klaas at Citi. So, I have a couple of questions. First, on the order intake in Mercedes-Benz. Can we talk through the percentage changes quarter-on-quarter across Europe, India, and Latvia?

Klas Bergelind: Morning, Marcus. Hi, Karin and Eva. Klas at Citi. I have a couple of questions. First, on the order intake in Mercedes-Benz. Can we talk through the percentage changes quarter on quarter across Europe, India, and LATAM? I'm also curious what you see in your European business, including Germany here into Q3. On DTNA, I'm trying to understand, is this because your build slots are now more full than peers for 2026, why orders were weaker than we thought? Or is this some sort of market share loss here that we're looking at? I'll start here on orders. Thank you very much.

Speaker #6: And I'm also curious what you see in your European business, including Germany, here into the third quarter. And then on DTNA, I'm trying to understand, is this because your build slots are now more full than peers for '26?

Speaker #6: Why were orders weaker than we thought? Or is this some sort of market share loss that we're looking at? I'll start here on orders.

Speaker #6: Thank you very much.

Speaker #3: Hi, Klaas. Sorry, I'm trying to get all the numbers together while answering. So, I would say, starting on group level, I think if you look at the order intake for the first half of the year, we're very comfortable with where we are.

Karin Rådström: Hi, Klas. Sorry, I'm trying to get all the numbers together while answering. I would say, starting on group level, I think if you look at the order intake H1, we're very comfortable with where we are. I think also in relation to our peers, we have some strong numbers. In MB specifically, we don't disclose order intake between the different regions. It was, I think, up in Europe, and slightly down in the other regions, right? Down a bit in Latin America and I think steady in India. I can give you at least that much.

Speaker #3: And I think also, in relation to our peers, we have some strong numbers. In MB specifically, we don't disclose order intake between the different regions, but it was, I think, up in Europe and slightly down in the other regions, right?

Speaker #3: And down a bit in Latin America, and I think steady in India. So I can give you at least that much.

Speaker #5: Yes, Klaas. Hi, thank you for your question. So, on North America overall, what I can say is that our order book really remains healthy, and it's significantly stronger than a year ago.

Eva Scherer: Yes, Klas. Hi. Thank you for your question. On North America, overall, what I can say that our order book really remains healthy, it's significantly stronger than a year ago. When we look at our backlog growth, that really reflects improved customer demand and stronger order intake throughout the current order cycle. Of course, we also align our production plans with market conditions, and we maintain flexibility to respond to customer requirements. We do see that because freight rates have improved significantly, fleet purchase intentions are rising, replacement demand remains strong. We do really see that also reflected in our orders as we started the Q3 because our Class 8 order share in July has been at 45%. This is also showing that we're strongly positioned in the market.

Speaker #5: And when we look at our backlog growth, that really reflects improved customer demand and stronger order intake throughout the current order cycle. And, of course, we also align our production plans with market conditions, and we maintain flexibility to respond to customer requirements.

Speaker #5: And we do see that, because freight rates have improved significantly, fleet purchase intentions are rising, replacement demand remains strong, and we really see that also reflected in our orders as we started the third quarter, because our Class 8 order share in July has been at 45%.

Speaker #5: And this is also showing that we're strongly positioned in the market. And it always has to do a bit with the structure of the orders in the market, which is why you have certain fluctuations overall. But we are not concerned about Q2, because we had an exceptionally strong Q4 and also Q1.

Eva Scherer: It always has to do a bit of the structure of the orders in the market, which is why you have certain fluctuations overall. We are not concerned about Q2 because we had an exceptionally strong Q4 and also Q1. What we do see is that now also starting Q3, the larger fleets and the rental and leasing customers are ordering again, they're placing larger orders again, especially, which is a part of the market that we're particularly exposed to. We believe on a year-to-date basis, including July, order intake remains on a very healthy level. When we look at our production, we have increased our production program now with the recent guidance range for Q4. We have only a couple slots open, but we're largely booked and very confident in the development there.

Speaker #5: And what we do see is that now, also starting in Q3, the larger fleets and the rental and leasing customers are ordering again, and they're placing larger orders again—especially, which is a part of the market that we're particularly exposed to.

Speaker #5: And so we believe, on a year-to-date basis including July, order intake remains at a very healthy level. And when we look at our production, we have increased our production program now with the recent guidance range for Q4.

Speaker #5: We have only a couple of slots open, but we're largely booked and very confident in the development there.

Speaker #6: All right. My second question is on Mercedes-Benz and the exit rate for the year. It looks like you need to achieve a very big margin step up from, say, 6% to 6.5% in the third quarter.

Klas Bergelind: All right. My second one is on Mercedes-Benz and the exit rate for the year. It looks like you need to achieve a very big margin step-up from, say, 6% to 6.5% in the Q3, almost 10%, if you stick to the 7% midpoint range. I hear you that you're increasing prices, I assume that this fully also assumes that the spare part issue will be completely solved, because that is obviously weighing on the mix, given the higher margin. Eva, can we talk through the moving parts to get to this very strong exit, if you are indeed keeping the midpoint of the range for the year, the 7%? Thank you.

Speaker #6: It's almost a 10%, if you stick to the 7% midpoint range. I hear you that you're increasing prices, but I assume that this also fully assumes that the spare part issue will be completely solved, because that is obviously weighing on the mix, given the higher margin.

Speaker #6: So, Eva, can we talk through the moving parts yet to this very strong exit? If you are indeed keeping the midpoint of the range for the year, the 7%?

Speaker #6: Thank you.

Speaker #3: So yes, you're right to assume that it will be a very strong Q4, that we're predicting, also driven by volumes. So, extremely large volumes in Q4, but we're used to that.

Eva Scherer: Yes, you're right to assume that it will be a very strong Q4, that we're predicting also driven by volumes. Extremely large volumes in Q4, but we're used to do that. We usually have very large volumes in Q4 of Mercedes-Benz, and also the highest profitability in the last quarter of the year. When it comes to the global spare parts center in Halberstadt, we still believe there will be some ramp-up challenges in Q3, those should be easing in Q4. We have the pricing impact, as you correctly stated, that will also positively affect the bottom line in Q4. With that, we do believe that, yes, the exit rate will be at a high level entering then also into 2027.

Karin Rådström: Yes, you're right to assume that it will be a very strong Q4, that we're predicting also driven by volumes. Extremely large volumes in Q4, but we're used to do that. We usually have very large volumes in Q4 of Mercedes-Benz, and also the highest profitability in the last quarter of the year. When it comes to the global spare parts center in Halberstadt, we still believe there will be some ramp-up challenges in Q3, those should be easing in Q4. We have the pricing impact, as you correctly stated, that will also positively affect the bottom line in Q4. With that, we do believe that, yes, the exit rate will be at a high level entering then also into 2027.

Speaker #3: We usually have very large volumes in Q4 at Mercedes-Benz and also the highest profitability in the last quarter of the year. And when it comes to the global spare parts center in Halberstadt, we still believe there will be some ramp-up challenges in Q3, but those should be easing in Q4.

Speaker #3: Then we have the pricing impact, as you correctly stated, that will also positively affect the bottom line in Q4. And with that, we do believe that, yes, the exit rate will be at a high level entering then also into 2027.

Speaker #6: All right. Very quick final one from me is on the tariff relief. Was that $400 million in total? And am I right that you had about $100 million included earlier in the guidance?

Klas Bergelind: All right. Very quick final one from me is on the tariff relief. Was that EUR 400 million in total, am I right that you had about EUR 100 million included earlier in the guide? We are looking at a EUR 300 million delta. How much was content relief versus MSRP? If you can confirm that you didn't have any EPA benefit in there. Thank you.

Speaker #6: We're looking at a $300 million delta. And how much was content relief versus MSRP? And if you can confirm that you didn't have any EPA benefit in there.

Speaker #6: Thank you.

Speaker #5: Thanks, Klaas. As you know, tariffs are always a very complicated topic. As we announced two weeks ago, we have received positive feedback on our U.S. content.

Eva Scherer: Thanks, Lars. As you know, tariff, always a very complicated topic. As we have announced two weeks ago, we have received positive feedback on our U.S. content application, that combined with the volume upgrade for Daimler Truck North America led to our guidance raise. You can well calculate how much we raised it at the midpoint. What also is considered here is that we have restructuring costs for our Portland plant. We announced the Portland plant closure last week, and there are restructuring costs associated with it, which we won't adjust, because we do have a new guideline for special reporting items. We do not want to adjust that much. Therefore, this will be in our adjusted EBIT affecting us. These are the moving pieces that went into the guidance range.

Karin Rådström: Thanks, Lars. As you know, tariff, always a very complicated topic. As we have announced two weeks ago, we have received positive feedback on our U.S. content application, that combined with the volume upgrade for Daimler Truck North America led to our guidance raise. You can well calculate how much we raised it at the midpoint. What also is considered here is that we have restructuring costs for our Portland plant. We announced the Portland plant closure last week, and there are restructuring costs associated with it, which we won't adjust, because we do have a new guideline for special reporting items. We do not want to adjust that much. Therefore, this will be in our adjusted EBIT affecting us. These are the moving pieces that went into the guidance range.

Speaker #5: Application, and that combined with the volume upgrade for Daimler Trucks North America, led to our guidance raise. You can, well, calculate how much we raised it at the midpoint.

Speaker #5: What is also considered here is that we have restructuring costs for our Portland plant. We announced the Portland plant closure last week, and there are restructuring costs associated with it, which we won't adjust, because we do have a new guideline for special reporting items, and we do not want to adjust that much.

Speaker #5: And therefore, this will be in our adjusted EBIT, affecting us. So these are the moving pieces that went into the guidance range. I can tell you about MSRP.

Eva Scherer: I can tell you about MSRP, the so-called IRA credits. We have applied for them as the calculation method has been released. We applied in June, and there's an assumption for that one in there as well in our raised guidance.

Karin Rådström: I can tell you about MSRP, the so-called IRA credits. We have applied for them as the calculation method has been released. We applied in June, and there's an assumption for that one in there as well in our raised guidance.

Speaker #5: So, the so-called IAO credits—we have applied for them, as the calculation method has been released. We applied in June, and there's an assumption for that one in there as well in our raised guidance.

Speaker #6: Thank you. So the next question comes from Daniela Costa at Goldman Sachs, please. Good morning, Daniela.

Klas Bergelind: Thank you.

Marcus Poppe: The next question comes from Daniela Costa at Goldman Sachs, please. Good morning, Daniela.

Speaker #7: Hi, good morning. Thanks for taking my questions. I have one in the US and one in Europe, but I'll start with the US one.

Daniela Costa: Hi, good morning. Thanks for taking my questions. I have one in the U.S. and one in Europe. I'll start by the U.S. one. Can you give a little bit of background of thinking about the new greenfield investment? A couple of items, I guess there you said late 2029. When you finish this, where will your mix Mexico versus U.S. be, and are you changing the mix even before opening up the plant? Does it impact your CapEx guide, which I think went on the CMD up until 2028? Does that change or was it already included there? I'll ask the European one.

Speaker #7: Can you give a little bit of background on thinking about the new greenfield investments? So, a couple of items there, I guess.

Speaker #7: You said late ’29. So, when you finish this, where will your mix of Mexico versus the US be? And are you changing the mix even before opening up the plants?

Speaker #7: And does it impact your CapEx guidance, which I think was outlined at the CMD up until 2028? So does that change, or was it already included there?

Speaker #7: And then I'll ask the European one.

Speaker #3: Yes, so I think, as I said earlier, with the new plant, it gives us a lot of flexibility. I mean, we already have, as you know, quite good flexibility in our network to move volumes between Mexico and the US.

Karin Rådström: I think it's, as I said earlier, with the new plant, it gives us a lot of flexibility. We have already today, as you know, quite good flexibility in our network to move volumes between Mexico and the U.S., depending on different conditions. With this new plant, we will have even more flexibility to do that. Of course, with this kind of greenfield investment, we have the opportunity to really leverage the latest technologies to use a lot of automation, which has been made available in the last couple of years. We think we can get a plant with extremely good productivity, which will be very competitive. As for the CapEx, I hand over to Eva.

Speaker #3: Depending on different conditions, with this new plant, we will have even more flexibility to do that. And, of course, with this kind of greenfield investment, we have the opportunity to really leverage the latest technologies and to use a lot of automation, which has been made available in the last couple of years.

Speaker #3: And we think we can get plants with extremely good productivity, which will be very competitive. As for the CapEx, I hand over to Eva.

Speaker #5: Yes, thanks, Daniela. So, on CapEx, it's a bit early to share the CapEx number for the plant, because we're in the process of finalizing the site selection.

Eva Scherer: Thanks, Daniela. On CapEx, it's a bit early to share the CapEx number for the plant because we're in the process of finalizing the site selection. What we can say is that it will be our largest plant in the United States. As we said at our capital markets day, we expect our CapEx to peak in 2026 and 2027, and they will still be at an elevated level in 2028. This is still what we assume. It's also worth noting that the new plant in the U.S., it is a very strategic investment into our production footprint and competitiveness in North America, I can also say that it offers an attractive payback.

Speaker #5: What we can say is that it will be our largest plant in the United States. And as we said at our Capital Markets Day, we expect our CapEx to peak in 2026 and 2027, and they will still be at an elevated level in 2028.

Speaker #5: And this is still what we assume. And it's also worth noting that the new plant in the US is a very strategic investment into our production footprint and competitiveness in North America.

Speaker #5: And I can also say that it offers an attractive payback.

Speaker #7: Thank you. And then just in Europe, I think you, Karen, mentioned 6% of BEVs in Europe. At the moment, there’s still the 2030 CO2 reduction target.

Daniela Costa: Thank you. Just in Europe, I think you, Karin, mentioned 6% of BEVs in Europe at the moment. There's still the 2030 CO2 reduction target. I was wondering if you could give a little bit of color on how do you think BEV penetration has to evolve for you to get there, and what you're seeing in the competitive landscape there. There's a lot of things in the press regarding Chinese competition and so on, just a little bit interested on your views on whether you're seeing effectively that competitive landscape starting to change at all.

Speaker #7: I was wondering if you could give a little bit of color on how you think BEV penetration has to evolve for you to get there, and what you're seeing in the competitive landscape.

Speaker #7: There's a lot of things in the press regarding like Chinese competition and so on, sort of like just a little bit interested on your views on whether you're seeing effectively that competitive landscape starting to change at all.

Speaker #3: Absolutely. Maybe starting with the second part of the question: we also see these announcements, but we don't yet see these trucks running with our customers.

Karin Rådström: Maybe starting with the second part of the question, we also see these announcements, we don't yet see these trucks running with our customers. We don't see it also in registrations. As I mentioned in the speech on zero-emission trucks, we actually have a 38% market share. We just announced also, one of the product gaps we've had, so to speak, has been the Lowliner, which is used for volume goods, for instance, for automotive inbound, outbound logistics. We will launch that now at IAA, which I think will put us even in a stronger position in terms of competitiveness. We are quite confident in our portfolio. As you correctly point out, the overall market is still too small.

Speaker #3: So, and we don't see it also in registrations. As I mentioned in the speech on zero-emission trucks, we actually have a 38% market share.

Speaker #3: And we just announced also—one of the product gaps we've had, so to speak, has been the lowliner, which is used for volume goods, for instance, like automotive inbound and outbound logistics.

Speaker #3: We will launch that now at IAA, which I think will put us in an even stronger position in terms of competitiveness. So we are quite confident in our portfolio.

Speaker #3: But as you correctly point out, the overall market is still too small. We see that as an industry—not Daimler Truck specific—but as an industry, in order to reach the 43% CO2 target reduction, the electrification rate in 2030 has to be around 35%.

Karin Rådström: We see that as an industry, not Daimler Truck specific, as an industry, in order to reach the 43% CO2 target reduction, electrification rate in 2030 has to be around 35%. For sure, it's a steep slope to go from the 6%, which was still much better than what we've seen before, the 6% to 35%. The main bottleneck still remains infrastructure, meaning charging stations. Even customers who want to transition to electric, in many cases, cannot do it, because they can't charge the trucks on the road. This is a challenge, and working, of course, very close with the colleagues on this topic in ACEA and VDA, and also addressing it in Brussels.

Speaker #3: So, for sure, it's a steep slope to go from the 6%, which was still much better than what we've seen before, but from 6% to 35%.

Speaker #3: And the main bottleneck still remains infrastructure—meaning charging stations. So even customers who want to transition to electric, in many cases, cannot do it because they can't charge the trucks on the road.

Speaker #3: So this is a challenge. And working, of course, very closely with the colleagues on this topic, in ACEA and VDA, and also addressing it in Brussels. What we're trying to achieve is to have a better connection between all the different legislations that will enable this transition.

Karin Rådström: What we're trying to achieve is to have a better connection between all the different legislations that will enable this transition, meaning the truck availability, also the charging station commitments that are actually legislated and the countries have committed to build, but are not building at the rate that they promised. Also, the Eurovignette Directive, which differentiates the road tax depending on if it's diesel or electric trucks, which is only implemented in 13 out of 28 member states, which makes then the TCO calculation for customers in the countries where it's not implemented, a little bit difficult. That's the current situation.

Speaker #3: This means both truck availability, but also the charging station commitments that are actually legislated. The countries have committed to build these, but they are not building them at the rate they promised.

Speaker #3: And also, the Eurovignette directive, which differentiates the road tax depending on if it's diesel or electric trucks, is only implemented in 13 out of 28 member states. This makes the TCO calculation for customers in the countries where it's not implemented a little bit difficult.

Speaker #3: So that's the current situation.

Speaker #7: Thank you.

Eva Scherer: Thank you.

Daniela Costa: Thank you.

Speaker #1: The next question comes from Harry Martin from Bernstein. Good morning, Harry.

Marcus Poppe: Next question comes from Harry Martin, from Bernstein. Good morning, Harry.

Speaker #8: Hi, good morning, everyone. Thanks for taking my questions. So, I’m calling from the US. The first question I have is just on the service and parts business.

Harry Martin: Hi. Morning, everyone. Thanks for taking my questions. A few on the US. The first question I have is just on the service and parts business. Did you see that business grow in Q2? If you could give some commentary on the new truck sales, it looked like mix on those new trucks was down year-over-year again in Q2. Is that the fact that large fleets are making up a bigger portion of the mix, and does that mix improve in H2? The second question, the set of questions I have is, there's some follow-ups on the new plant in the US. I understand the rationale. Will it increase total capacity in North America, or would you downsize parts of the Mexico production in association?

Speaker #8: Did you see that business growing in Q2? And then, if you could give some commentary on the new truck sales—it looked like the mix on those new trucks was down year over year.

Speaker #8: Again, in the second quarter, is it the case that large fleets are making up a bigger portion of the mix, and does that mix improve in the second half of the year?

Speaker #8: And then the second question—the set of questions I have—are some follow-ups on the new plant in the US. I understand the rationale.

Speaker #8: Will it increase total capacity in North America, or would you downsize part of the Mexico production in association? Was this a prerequisite for the tariff deal, or totally unrelated?

Harry Martin: Was this a prerequisite for the tariff deal or totally unrelated? The final thought or question is, does the US market have room for the new capacity from you, from Volvo Mexico, from Tesla, all in the space of a few years? Or is there some concern about the total level of capacity? Thank you.

Speaker #8: And then the final sort of thought or question is: Does the US market have room for the new capacity from you, from Volvo in Mexico, from Tesla, all in the space of a few years?

Speaker #8: Or is there some concern about the total level of capacity? Thank you.

Speaker #5: Thanks, Harry, for your question. So, on the service and parts business in the US, it was up mid-single digit year over year. So yes, we do see it growing.

Eva Scherer: Thanks, Harry, for your question. On the service and parts business in the US, it was up mid-single digit year over year. Yes, we do see it growing. When it comes to new truck sales, if I understood your question correctly, and the mix, as I said when I answered the question from Klas, when we look at the last three quarters, we actually have a very high order intake development, which is contributing to a significantly improved backlog. In Q2, it was a bit lower, but I also said that the large fleets and the rental and leasing fleets, that was a bit lower in Q2, but that is already starting to really catch up in Q3 now, with the 45% Class 8 order share that we're seeing in July.

Speaker #5: And when it comes to new truck sales, if I understood your question correctly—and the mix, as I said when I answered the question from Klaus—when we look at the last three quarters, we actually have a very high order intake development, which is contributing to a significantly improved backlog.

Speaker #5: In the second quarter, it was a bit lower, but I also said that the large fleets and the rental and leasing fleets—that was a bit lower in the second quarter—but that is already starting to really catch up in the third quarter now, with the 45% Class 8 order share that we're seeing in July.

Speaker #5: On the plan, Karen's going to do that one.

Eva Scherer: On the plan, Harry, can you do that one?

Karin Rådström: Yeah, I can do the one with the plant. I think as I mentioned before, it's a strategic investment. It gives us more flexibility in the market, and we will leverage latest technologies to really ensure that we build a highly efficient plant. It will increase our capacity, yes. I think this is a good thing, because today, when we're at the top cycle, we do have a limitation in terms of supply. This gives us opportunity for growth. We will continue to grow from our strong position today. As I think you know, we're also trying to gain market share on the vocational side, where we still have a lot of potential for even further growth. This makes us confident to take this investment now.

Speaker #3: The plant. So, I think, as I mentioned before, it's a strategic investment. It gives us more flexibility in the market, and we will leverage the latest technologies to really ensure that we build a highly efficient plant.

Speaker #3: It will increase our capacity, yes. But I think this is a good thing, because today, when we're at the top of the cycle, we do have a limitation in terms of supply.

Speaker #3: So, this gives us an opportunity for growth. We will continue to grow from our strong position today. And, as I think you know, we're also trying to gain market share on the vocational side, where we still have a lot of potential for even further growth.

Speaker #3: So this makes us confident to take this investment now.

Speaker #8: And if I can just follow up with—I mean, was this part of the negotiations with the administration, or was there something that was actually in the works for Daimler Truck before any of the changes in tariff policy?

Harry Martin: If I can just follow up, was this part of the negotiations with the administration, or was this something that was actually in the works for Daimler Truck before any of the changes in tariff policy?

Speaker #3: Yeah, so I would say, I mean, if you look at the geopolitical developments in the last couple of years, of course, this is something we've been talking about for a while within the company.

Karin Rådström: I would say, if you look at the geopolitical development in the last couple of years, of course, this is something we've been talking about for a while within the company. How do we make sure that we set up our company to be robust and resilient for the future? I would say this comes much more out of a strategic perspective than out of short-term gains related to the current legislative environment.

Speaker #3: How do we make sure that we set up our company to be robust and resilient for the future? I would say this comes much more from a strategic perspective than from short-term gains related to the current legislative environment.

Speaker #8: Great. Thank you very much.

Harry Martin: Great. Thank you very much.

Speaker #1: Next question comes from Louis Merrick at BNP Paribas. Good morning, Louis.

Marcus Poppe: Next question comes from Lewis Merrick at BNP Paribas. Good morning, Lewis.

Speaker #9: Good morning, Louis Merrick at BNP Paribas. Thank you for taking my questions. We've got clarity on the EPA '27, and you're in the unique position that you've got a good balance of NOx credits to use.

Lewis Merrick: Good morning. Lewis Merrick of BNP Paribas. Thank you for taking my questions. We've got clarity on the EPA '27, and you're in the unique position that you've got a good balance of NOx credits to use. I mean, clear there's time for the regulations to change, but based on your current understanding today, how do you plan to use those NOx credits? How many units will they cover? Will these be able to be used to offset any non-conforming penalties? A peer recently suggested that wouldn't be the case, but I'm keen to hear your understanding.

Speaker #9: That includes time for the regulations to change, but based on your current understanding today, how do you plan to use those NOx credits? How many units will they cover?

Speaker #9: And will these be able to be used to offset any non-conforming penalties? It appears that recently it was suggested that wouldn't be the case, but I'm keen to hear your understanding.

Speaker #3: Yes. Thanks, Harry. So, thanks, Louis—sorry, still the last question. Busy morning. Thanks, Louis. EPA 27—so what I can say is that credits are part of our technological solution to achieve EPA 27 compliance.

Karin Rådström: Yes. Thanks, Harry. Thanks, Lewis. Sorry. Still the last question. Busy morning. Thanks, Lewis. EPA '27. What I can say is that credits are part of our technological solution to achieve EPA '27 compliance. It gives us some flexibility in certification. We won't discuss today details of the certification, but please keep in mind that these credits are awarded for our current engine generation that have lower emissions than what is required by law. What we can also say is that our EPA '27 compliant engine, it's a technical solution that will be highly robust as it will not require a 48-volt system, and we do not expect any non-conformance penalties having to be paid for our EPA '27 compliant engine, because we will be fully compliant with the engine that we launch beginning of next year.

Speaker #3: It gives us some flexibility in certification. So we won't discuss today the details of the certification, but please keep in mind that these credits are awarded for our current engine generation, which has lower emissions than what is required by law.

Speaker #3: What we can also say is that our EPA '27 compliant engine is a technical solution that will be highly robust, as it will not require a 48-volt system.

Speaker #3: And we do not expect any non-conformance penalties having to be paid for our EPA 27-compliant engine, because we will be fully compliant with the engine that we launch at the beginning of next year.

Speaker #8: Clear. And just on the tariffs, can you give us a sense of what percentage of qualifying U.S. content you've actually agreed with the U.S. Department of—

Lewis Merrick: Clear. Just on the tariffs, can you give us a sense of what percentage of qualifying US content you have actually agreed with the U.S. Department of Commerce?

Speaker #3: We cannot share any details on that, Louis.

Karin Rådström: We cannot share any details on that, Lewis.

Speaker #8: Yeah, understood. Thank you.

Lewis Merrick: Yeah. Understood. Thank you.

Speaker #1: The next question comes from José Azumedi from J.P. Morgan. Good morning, José.

Marcus Poppe: Next question comes from Jose Asumendi from JPMorgan. Morning, Jose.

Marcus Poppe: Next question comes from José Asumendi from JPMorgan. Morning, Jose.

Speaker #9: Good morning. Thank you, Marcus. I have a couple of questions, please. I think we could discuss order intake for quite a while, and I think we heard during the call that you're confident about order intake for Q3 and the momentum.

José Asumendi: Morning. Thank you, Marcus. A couple of questions, please. I think we can discuss order intake for very long, and I think we heard during the call that you are confident on order intake for Q3 momentum. Can maybe, just to spin it in a different way, can we talk a bit about the production run rate ratios going into Q3? Do you see them also elevated versus Q2, or improved maybe, as you think about Europe and North America, which again would sustain the view that the momentum remains strong order-wise in Europe and US for you. Second question, the topic of aftersales in Halberstadt, is this something that you think it will be solved by Q4 or maybe as quick as Q3 in terms of the impact on earnings we saw in MB Trucks, Mercedes-Benz Trucks? Thank you.

Speaker #9: Maybe just to spin it in a different way, can we talk a bit about the production run rate ratios going into the third quarter?

Speaker #9: And do you see them also elevated versus Q2, or maybe improved, as you think about Europe and North America? Which, again, would sustain the view that momentum remains strong, order-wise, in Europe and the US for you.

Speaker #9: And then, second question: the topic of after-sales in Harbor State. Is this something that you think will be solved by the fourth quarter, or maybe as quick as Q3 in terms of the impact on earnings?

Speaker #9: We saw it in MB terms in the same space. Thank you.

Speaker #3: So the production—yeah, thanks, José. On the production, we are expecting production to be slightly up in the third quarter, so for Mercedes-Benz Trucks and for Trucks North America, and even further in the fourth quarter.

Karin Rådström: The production, yeah, thanks, Jose. On the production, we are expecting production to be slightly up in Q3. For Mercedes-Benz Trucks and for Trucks North America, and even further in Q4. What we also see based on orders development is that our production program is largely booked for both these segments. With Halberstadt, I can say the situation is improving from where we were in Q2, but we will see some effects also in Q3. We are hopeful that we will solve these topics in Q3 and run very efficient global parts logistics by Q4.

Speaker #3: And what we also see, based on order development, is that our production program is largely booked for both these segments. With Halberstadt, I can say the situation is improving from where we were in Q2, but we will see some effects also in Q3.

Speaker #3: But we are hopeful that we will solve these topics in Q3 and run very efficient global parts logistics by Q4.

Speaker #8: Good year. Thank you very much.

José Asumendi: Clear. Thank you very much.

Speaker #1: The next question comes from Shaquille Kurunda at Morgan Stanley. Good morning, Shaquille.

Marcus Poppe: Next question comes from Shaqeal Kirunda from Morgan Stanley. Good morning, Shaqeal.

Speaker #10: Good morning, Shaquille from Morgan Stanley. Thanks for taking my questions. So, book-to-bill fell in Q2, but freight rates have continued to grow. It seems like freight demand is coming online also.

Shaqeal Kirunda: Good morning. Shaqeal from Morgan Stanley. Thanks for taking my questions. Book-to-bill fell in Q2, but freight rates have continued to grow. Seems like freight demand is coming online also. What's your sense of current market sentiment? Do you think the US freight operators are more confident in the cycle and could move away from replacing trucks to actually expanding their fleets?

Speaker #10: What’s your sense of current market sentiment? Do you think that US freight operators are more confident in the cycle, and could move away from just replacing trucks to actually expanding their fleets?

Speaker #3: Thanks, Shaquille, for your question. So, yeah, at the moment, we see only limited increases in freight volume, but a strong increase in freight rates.

Karin Rådström: Thanks, Shaqeal, for your question. Yeah, at the moment, we see only limited increases in freight volume, but a strong increase in freight rates. We could see further potential there in H2 and then also in particular into 2027, as this momentum accelerates.

Speaker #3: But we could see further potential there in the second half of the year, and then also in particular into 2027, as this momentum accelerates.

Speaker #10: Thank you. And then on the EPA situation, the NCP mechanism lets manufacturers certify engines well above the 2027 NOx standard, up to 200 milligrams, it seems.

Shaqeal Kirunda: Thank you. Then on the EPA situation. The NCP mechanism lets manufacturers certify engines way above the 2027 NOx standard to 200 milligrams, it seems. From the latest sort of developments, it seems like your peers are quite happy to take advantage of this. By fully complying, it sounds like you'd be in the market with a more expensive engine.

Speaker #10: And from the latest sort of developments, it seems like your peers are quite happy to take advantage of this.

Speaker #11: Thank you.

Speaker #10: So by fully complying, it sounds like you've been in the market with a more expensive engine. I mean, is it that your incremental costs are just so much lower, or are you expecting that the fuel efficiency from the new engine will pay off?

Shaqeal Kirunda: Is it that your incremental costs are just so much lower or you are expecting that the fuel efficiency from the new engine will pay off? Can you walk us through the strategy here?

Speaker #10: Can you walk us through the strategy here?

Speaker #3: Yeah, sure. And maybe we ask whoever else is talking to just mute, because we heard some background noise. So, we will change over our production to the new engines.

Karin Rådström: Yeah, sure. Maybe we ask whoever else is talking to just mute, because we heard some background noise. We will change over our production to the new engines. As Eva already stated, we have what we believe to be extremely robust engines, very good technical solution. We do not need the 48-volt system, which means the incremental cost increase is not that high. We also will have a TCO advantage with these engines of around 3%. We are definitely confident that these engines will perform with our customers, and that is why we will not run parallel programs going into 2027. Thank you.

Speaker #3: As I already stated, we have what we believe to be extremely robust engines and a very good technical solution. We don't need the 48-volt system, which means the incremental cost increase is not that high.

Speaker #3: And we also will have a TCO advantage with these engines of around 3%. So we are definitely confident that these engines will perform with our customers, and that's why we will not run parallel programs going into '27.

Speaker #10: Thank you.

Speaker #1: The next question comes from Alex Jones at Bank of America. Good morning, Alex.

Marcus Poppe: Next question comes from Alex Jones at Bank of America. Good morning, Alex.

Speaker #8: Good morning. Thanks for taking my questions. My first one is just on this U.S. facility—are you able to give any sort of quantification or color on the cost advantage of the new plant compared to your existing capacity?

Alex Jones: Morning. Thanks for taking my questions. Maybe the first one just on this US facility. Are you able to give any sort of quantification or color on the cost advantage of the new plant compared to your existing capacity, given you can design it from scratch as you highlighted earlier? The second question just on autonomous. Volvo obviously announced at their Capital Markets Day that they will be commercializing or launching commercial autonomous vehicles in the US in Q1 2027. How do you view the progress on with Torc in that light, and is there any risk that you are sort of a year behind your key competition? Thank you.

Speaker #8: Given you can design it from scratch, as you highlighted earlier. And then, the second question, just on autonomous: Volvo obviously announced at their Capital Markets Day that they will be commercializing—or launching—commercial autonomous vehicles in the US in Q1 2027.

Speaker #8: How do you view the progress on, with torque in that light, and is there any risk that you're sort of a year behind your key competition?

Speaker #8: Thank you.

Speaker #3: Hi, Alex, Eva here. So, I'll take the one on the cost advantage of the new plant. So, it's a greenfield plant. We will use state-of-the-art technologies, and we will, of course, also use a very high automation rate and really use everything that is available when it comes to automation and digitalization of this facility.

Eva Scherer: Hi, Alex. Eva here. I'll take the one on the cost advantage of the new plant. It's a greenfield plant. We will use state-of-the-art technologies. We will of course also use very high automation rate, and use really everything that is available when it comes to automation and digitalization of this facility. Obviously it will be more efficient than other plants, because also when you have brownfield facilities, you can do certain tweaks, but you can never get to these efficiency jumps as with a new facility. I cannot quantify it at this point in time. Of course, at a later point in time, we're happy to do so. Yes, and I can take the question on Torc.

Speaker #3: And so, obviously, it will be more efficient than other plants because, also, when you have brownfield facilities, you can do certain tweaks, but you can never get to these efficiency jumps as with a new facility.

Speaker #3: But I cannot quantify it at this point in time, but of course, at a later point in time, we're happy to do so. Yes.

Karin Rådström: Yes, and I can take the question on Torc.

Speaker #3: And I can take the question on the important point, and something that makes us very confident in that is, I believe we're the only OEM to have this capability in-house, with the virtual driver.

Karin Rådström: I think what's important and something that makes us very confident in that is, I believe we're the only OEM to have this capability in-house with the virtual driver, and Torc as our own software company. I would say the team has made really great progress this year, and we have a big milestone towards the end of the year, which is to drive on public roads, driver out, so without a driver sitting in the cab. So far, but it's new technology, so always hard to know, but we're making really good progress towards that milestone, and the team is well on track. We're quite confident about our capabilities to compete also in the autonomous space.

Speaker #3: And Torc, as our own software company, I would say the team has made really great progress this year, and we have a big milestone towards the end of the year, which is to drive on public roads, driver-out.

Speaker #3: So, without a driver sitting in the cab. So far, it’s new technology, so it’s always hard to know, but we’re making really good progress toward that milestone, and the team is well on track.

Speaker #3: So, we're quite confident about our capabilities to compete also in the autonomous space.

Speaker #8: Thank you.

Alex Jones: Thank you.

Speaker #1: Next question comes from Anthony Dick at Auto BHF. Good morning, Anthony.

Marcus Poppe: Next question comes from Anthony Dick at Oddo BHF. Morning, Anthony.

Speaker #10: Yes, good morning. Thanks for taking the questions. The first one is on the tariff topic. I mean, I'm wondering if you can provide any further incremental color on in terms of how much the more favorable tariff treatment or tariff outlook contributed to your guidance upgrade or any details also on the MSRP offset impact and the IEPA impact in Q2.

Anthony Dick: Yes. Good morning. Thanks for taking the questions. The first one is on the tariff topic. I'm wondering if you can provide any further incremental color in terms of how much the more favorable tariff treatment or tariff outlook contributed towards your guidance upgrade, or any details also on the MSRP offset impact and the IEEPA impact in Q2. The second one is on the Portland plant shutdown and restructuring. Don't know if I missed it, but did you provide the actual figure for the restructuring that we should take into account for H2? Thank you.

Speaker #10: And the second one is on the Portland plant shutdown and restructuring. I don't know if I missed this, but did you provide the actual figure for the restructuring that we should take into account for H2?

Speaker #10: Thank you.

Speaker #3: Hi, Anthony. So on the guidance upgrade, I cannot give you any details here on the moving pieces when it comes to tariffs, but as I said before, the guidance upgrade was defined by three factors: the volume upgrade in the North American business, the Portland plant closure, and the Portland plant closure amounts to a high double-digit impact.

Karin Rådström: Hi, Anthony. On the guidance upgrade, I cannot give you any details here on the moving pieces when it comes to tariffs. As I said before, the guidance upgrade was defined by three factors, the volume upgrade in the North American business, the Portland plant closure. The Portland plant closure amounts to a high double-digit impact, and then tariff-related improvement. These are the three moving pieces. Yeah, sorry, can't share any further details on that one.

Speaker #3: And then tariff-related improvement. So, these are the three moving pieces. And yeah, sorry, can't share any further details on that one.

Speaker #10: Thank you.

Anthony Dick: Thank you.

Speaker #1: Next question comes from Michael Aspinell at Jefferies. Good morning, Michael.

Marcus Poppe: Next question comes from Michael Espinella, Jefferies. Good morning, Michael.

Speaker #8: Good morning. Yeah, good morning, Karen, Eva, and Marcus. Michael here from Jefferies. And sorry if the answer is that you can't answer this, but I just wanted to check once more on just kind of understanding the shape of the content allowances.

Michael Aspinall: Good morning. Good morning, Karin, Eva, and Marcus. Michael here from Jefferies. Sorry if the answer is that you can't answer this, but I just wanted to check once more on just understanding the shape of the content allowances. Is it fair to assume that Q3 benefits from the content allowances reflecting trucks sold from when 232 came into effect? From November last year to June. Is that benefit in Q3? I'm just trying to get a sense as to how much of the Q3 margin is catch-up of the US content versus ongoing into Q4 and 2027.

Speaker #8: Is it fair to assume that Q3 benefits from the content allowances reflecting trucks sold from when 2, 3, 2 came into effect? So, kind of from November last year to June.

Speaker #8: Is that benefit kind of in Q3? I'm just trying to get a sense as to how much of the Q3 margin is catch-up of the U.S. content versus ongoing into Q4 in 2027.

Speaker #3: Yes, Michael. I'm happy to answer that. So, the U.S. content application retroactively goes back to November 2025, and that is reflected in Q3 in our guidance.

Eva Scherer: Yes, Michael, I'm happy to answer that. The US content application retroactively goes back to November 2025, and that is reflected in Q3 in our guidance.

Karin Rådström: Yes, Michael, I'm happy to answer that. The US content application retroactively goes back to November 2025, and that is reflected in Q3 in our guidance.

Michael Aspinall: Okay. You can't give a quantum of how much is catch-up versus ongoing at all?

Speaker #8: Yeah, okay. You can't give a quantum of how much is catch-up versus ongoing at all, or should we just work that out?

Michael Aspinall: Okay. You can't give a quantum of how much is catch-up versus ongoing at all?

Speaker #3: I'm afraid I cannot, Michael.

Eva Scherer: I'm afraid I cannot, Michael.

Karin Rådström: I'm afraid I cannot, Michael.

Speaker #8: Okay, that's all right. No worries. And then just confirming, because it sounds a little bit different from how some others are approaching this, that you're not going to sell the 2026 engine in 2027, as it sounds like some other people will.

Michael Aspinall: Okay, that's all right. No worries. Just confirming, because it sounds a little bit different to how some others approaching, that you're not going to sell the 2026 engine in 2027, as it sounds like some other people will?

Speaker #3: You've understood that correctly, yes.

Karin Rådström: You've understood that correctly, yes.

Speaker #8: Okay, cool. Thanks very much.

Michael Aspinall: Okay, cool. Thanks very much.

Speaker #1: That concludes our first part of this Q&A session for investors and analysts. We will now have a break of one minute and then continue with the Q&A session for media. As always, IR remains at your disposal to answer any further questions you might have.

Marcus Poppe: That concludes our first part of this Q&A session for investors and analysts. We now have a break of one minute. We'll then continue with the Q&A session for media. As always, IR remains at your disposal to answer any further questions you might have. We are looking forward to staying in contact with you. Have a great day. Thank you, and goodbye.

Speaker #1: We are looking forward to staying in contact with you. Have a great day. Thank you, and goodbye.

Speaker #11: Hello, everyone, and thank you for joining us today. Welcome to the Q&A session. Before we start the Q&A, a few housekeeping remarks: this call is conducted in English.

[Company Representative] (Daimler Truck): Hello, everyone, thank you for joining us today, welcome to the Q&A session. Before we start the Q&A, some housekeeping remarks. This call is conducted in English, so please be so kind as to ask your questions in English as well. Now the operator will explain the procedure for registering your questions.

Speaker #11: Please be so kind as to ask your questions in English as well. And now the operator will explain the procedure for registering your questions.

Speaker #12: If you wish to ask a question, please press star one on your telephone keypad. Please press star two on your telephone keypad if you wish to withdraw your question.

Operator: If you wish to ask a question, please press star and one on your telephone keypad. Please press star and two on your telephone keypad if you wish to withdraw your question. One moment please for the first question.

Speaker #12: One moment, please. For the first question.

Speaker #11: Thank you, operator. We will now begin the media Q&A session. The operator will address the questioners by name, but please be so kind as to briefly introduce yourself with your full name and media outlet.

[Company Representative] (Daimler Truck): Thank you, operator. We will now begin the media Q&A session. The operator will address the questioners by name, please be so kind as to briefly introduce yourself and your full name with your media outlet. Take your time. Please ask them slowly and clearly. With that, operator, please.

Speaker #11: Take your time. Please ask them slowly and clearly. And with that, operator, please.

Speaker #12: The first question comes from Christopher Kavalinski from Welt. Please go ahead.

Operator: The first question comes from Christopher Kovalcinski from Welt. Please go ahead.

Speaker #13: Christopher Kavalinski, Welt. Good morning. I wonder how seriously you treat the EU regulation, and what's the possibility that there will be fines that will really affect your numbers and affect the share price?

Christopher Kovalcinski: Christopher Kovalcinski, Welt. Good morning. I wonder how serious you treat the EU regulation, and what's the possibility that there will be fines that will really affect your numbers and affect the share price? Is this really a risk that in two years' time, we will see no EBIT and we will have the share price come down, or do you think this is something that could be mitigated? Thank you.

[Journalist] (WELT): Christopher Kovalcinski, Welt. Good morning. I wonder how serious you treat the EU regulation, and what's the possibility that there will be fines that will really affect your numbers and affect the share price? Is this really a risk that in two years' time, we will see no EBIT and we will have the share price come down, or do you think this is something that could be mitigated? Thank you.

Speaker #13: Is this really a risk, that in two years’ time we will see no EBIT and we will have the share price come down? Or do you think this is something that could be mitigated?

Speaker #13: Thank you.

Speaker #3: Thank you for the question. So, the current regulations stipulate that we should reduce CO2 by 15% compared to the 2019 baseline. So that's the scheme we're currently in.

Karin Rådström: Thank you for the question. The current regulation stipulates that we should reduce CO2 by 15% compared to the 2019 baseline. That's the scheme we're currently in, we are quite confident that we are able to deliver on that. For the next couple of years, situation looks under control. The big challenge comes in 2030, when it goes from 15% to 43%, and the actual measuring period for that is mid-2030 to mid-2031. If we were to pay something, it's more like 2032. Yes, it is a risk, and that's why we take it so seriously. We invested many hundreds of millions to build, and be able to deliver great electric trucks. We see that the take rates aren't where we expected. As I mentioned, 6% of heavy-duty trucks registered in Europe, Q2 were electric.

Speaker #3: And we are quite confident that we are able to deliver on that. So, for the next couple of years, the situation looks under control. I think the big challenge comes in 2030, when it goes from 15% to 43%.

Speaker #3: And the actual measuring period for that is mid-2030 to mid-2031. So if we were to pay something, I think it's more like 2032. But yes, it is a risk.

Speaker #3: And that's why we take it so seriously. We invested many hundreds of millions to build and be able to deliver great electric trucks. And we see that the take rate isn't where we expected.

Speaker #3: As I mentioned, 6% of heavy-duty trucks registered in Europe in Q2 were electric. We are very keen to see that increase over the next few years, because to hit the 43%, we believe we need around a 35% electrification rate.

Karin Rådström: We are very keen to have that increase over the next years, because to hit the 43%, we believe we need around a 35% electrification rate. We are working very closely with both the German government and the EU, to really push that the enabling conditions are in place. That's why we are also asking for an early review of the CO2 regulation, where we hope that we will look at it and connect it much more to the enabling conditions, such as charging and cost parity. Especially charging capacity is currently the bottleneck that doesn't make the take rate go up relative to diesel right now.

Speaker #3: So, we are working very closely with both the German government and the EU to really push that the enabling conditions are in place. And that's why we are also asking for an early review of the CO2 regulation, where we hope that we will look at it and connect it much more to the enabling conditions, such as charging and cost parity.

Speaker #3: And especially, charging capacity is currently the bottleneck that doesn't make the take rate go up relative to diesel right now.

Speaker #12: The next question comes from Michael Schepe from Handelsblatt. Please go ahead.

Operator: The next question comes from Michael Scheppe from Handelsblatt. Please go ahead.

Speaker #13: Good morning, everyone, and thanks for taking my questions. I have three questions, all on the US. You are expecting higher sales volumes in the US market.

Michael Scheppe: Yeah. Good morning, everyone, and thanks for taking my questions. I have three questions, all on the US. You are expecting higher sales volumes in the US market. Can you give us some details? Why is the market there developing better than you have expected before? The second question is on the new US plant. Can you give us any number or any figure on how large the investments are there? The third question is on the US tariffs. You are receiving a refund of the tariffs. Can you give us anyhow a number or a range? Why are you being so reluctant to name a number there? It's a good deal for you, isn't it, that you're getting back money. Maybe you can give a bit more details there. Thank you very much.

Speaker #13: Can you give us some details? Why is the market there developing better than you had expected before? The second question is on the new US plant.

Speaker #13: Can you give us any number, any figure on how large the investments are there? And the third question is on the US tariffs. I mean, you are receiving a refund of the tariffs.

Speaker #13: Can you give us any number, or at least a range? And why are you being so reluctant to name a number there? I mean, it's good news for you, isn't it, that you're getting back money?

Speaker #13: Maybe you can give a bit more detail there. Thank you very much.

Speaker #3: Thank you, Michael, for your questions. Eva here. So, on the higher sales volumes in North America, what we really see now after the first half of the year is that we're getting out of the so-called freight recession.

Eva Scherer: Thank you, Michael, for your questions. Eva here. On the higher sales volumes in North America, what we really see now after the H1 of the year is that we're getting out of the so-called freight recession, in the United States that has been affecting us for the last couple of years. We do see that freight rates are up significantly, about 30% since the start of the year. Freight volumes are only slightly up. We also do believe there will be a further improvement coming in the next couple of quarters. We have raised our guidance and our volume projections because we do see the orders that we have received in the last three quarters.

Speaker #3: In the United States, that has been affecting us for the last couple of years. We do see that freight rates are up significantly, about 30% since the start of the year.

Speaker #3: Freight volumes are only slightly up, but we also do believe there will be further improvement coming in the next couple of quarters. And we have raised our guidance and our volume projections because we do see the orders that we have received in the last three quarters.

Speaker #3: And this is why our production program is basically full, with a few limited slots left in Q4. And because of that, we are confident in achieving these higher sales volumes.

Eva Scherer: This is why our production program is basically full with a few limited slots left in Q4. Because of that, we are confident in achieving these higher sales volumes, in the H2 of the year. On the US plant, it's a bit too early to share how much we intend to spend on the new plant because we're currently in the final stages of the site selection. It will be our largest plant in the US. We will share more once this is possible. On the US tariffs, this is a very complex topic. What we have shared is that we have increased our guidance for North America and also for Daimler Truck as a whole because of tariff-related improvement and also the volume impact. Both of these factors are attributing to the increase in our EBIT projection.

Speaker #3: In the second half of the year. And on the US plant, it's a bit too early to share how much we intend to spend on the new plant because we're currently in the final stages of the site selection.

Speaker #3: It will be our largest plant in the US. And we will share more once this is possible. And on the US tariffs, this is a very, very complex topic, but what we have shared is that we have increased our guidance for North America and also for Daimler Truck as a whole because of tariff-related improvement and also the volume impact.

Speaker #3: And so, there, both of these factors are contributing to the increase in our EBIT projection. And also, in the analyst call, we just discussed that the Portland plant closure is a negative impact that is also considered in the guidance range, with a high double-digit million impact.

Eva Scherer: Also in the analyst call, we just discussed that also the Portland plant closure, that is a negative impact that's also considered in the guidance range with a high double-digit EUR million impact.

Speaker #13: Thank you very much.

Michael Scheppe: Thank you very much.

Speaker #12: The next question comes from Marlene Martin from Bloomberg News. Please go ahead.

Operator: The next question comes from Marilen Martin from Bloomberg News. Please go ahead.

Speaker #3: Good morning, Marlene Martin, Bloomberg News. I just have a short clarification question on the costs for the Portland plant closure, because you said that it's a high double-digit number.

Marilen Martin: Good morning, Marilen Martin, Bloomberg News. I just have a short clarification question on the costs for the Portland plant closure, because you said that it's a high double-digit number. Is that in euros or dollars? You mentioned it's in the H2 that we'll see those costs in the balance sheet, right? Thank you very much.

Speaker #3: Is that in euros or dollars? And you mentioned it's in the second half of the year that we all see those costs on the balance sheet, right?

Speaker #3: Thank you very much. Yes, we expect these costs in the second half of the year, in Q3 in particular. It's actually a high double-digit amount in euros and in dollars.

Eva Scherer: Yes, we expect these costs in the H2, in Q3 in particular. It's actually high double digit in euros and in dollars.

Speaker #3: Okay.

Marilen Martin: Okay.

Speaker #12: The next question comes from Ilona Wiesenbach from Tagesschau, from Thomson Reuters. Excuse me. Please go ahead.

Operator: The next question comes from Ilona Wissenbach from Thomson Reuters. Please go ahead.

Speaker #13: Yes, hello. This is Ilona Wiesenbach from Reuters in Germany. Hello. I wanted to ask about the new U.S. plant. Karen, you mentioned that this is related to the legislative environment.

Ilona Wissenbach: Yes. Hello. Here is Ilona Wissenbach from Reuters in Germany. Hello. I wanted to know about the new US plant. Karin, you mentioned that this is related to the legislative environment. Can we say this is clearly a reaction to the tariff policy, that part of the plan is to avoid US tariffs? If so, what does it mean for your Mexico operation? Are you going to reduce there something, even though you mentioned it will be a capacity increase? I was a bit surprised about the closure of the Portland plant. Looking it quickly up, it seems to be not a very big plant, but can you give us some details there? How many jobs are affected? Why are you doing this? Another question is related to Germany, perhaps afterwards.

Speaker #13: So, can we say this is clearly a reaction to the tariff policy—that part of the plan is to avoid U.S. tariffs? And if so, what does it mean for your Mexico operation?

Speaker #13: Are you going to reduce something, even though you mentioned it will be a capacity increase? And I was a bit surprised about the closure of the Portland plant.

Speaker #13: Looking it up quickly, it seems to not be a very big plant, but can you give us some details there? How many jobs are affected?

Speaker #13: Why are you doing this? And other questions related to Germany, perhaps afterwards.

Speaker #3: Thanks, Ilona. So, just to be very clear: no, we are not building this plant to avoid tariffs. And sorry if I said something that was misinterpreted.

Karin Rådström: Thanks, Ilona. Just to be very clear, no, we are not building this plant to avoid tariffs. Sorry if I said something which was misinterpreted. It's a long-term strategic investment. We are very strong in the US market, as you know. We think this is the opportunity that keeps us strong and also gives us even further potential to grow in the US market. We have not with this announced that we will close any other plants in Mexico or in the US. We will have a lot of flexibility, I think it gives us even more opportunity to really optimize our strategic network going forward. That's the background. With regards to the Portland plant, you're right. It's quite a small plant. The closure affects 370 employees.

Speaker #3: It's a long-term strategic investment. We are very strong in the US market, as you know, and we think this is the opportunity that keeps us strong and also gives us even further potential to grow in the US market.

Speaker #3: We have not, with this, announced that we will close any other plants in Mexico or in the US. We will have a lot of flexibility, and I think it gives us even more opportunity to really optimize our strategic network going forward.

Speaker #3: So that's the background. With regards to the Portland plant, you're right—it's quite a small plant—so the closure affects 370 employees. The reasons are also that it's quite a logistically challenging place to have a plant, as most of our customers and most of our suppliers are on the East Coast.

Karin Rådström: The reasons are also that it's quite logistically a challenging place to have a plant, as most of our customers and most of our suppliers are on the East Coast. As an example, we're shipping cabs across the country to this plant. As said, it's a rather small volume plant that we can absorb within our current network. That's the background on that one. The aim is to close the plant by end of the year.

Speaker #3: As an example, we're shipping cabs across the country to this plant. And as I said, it's a rather small-volume plant that we can absorb within our current network.

Speaker #3: So that's the background on that one. And the aim is to close the plant by the end of the year.

Speaker #13: Okay, thank you. And the question on Germany is: If I'm not mistaken, Eva, you mentioned earlier this year some optimism about the impact from the German public stimulus infrastructure package.

Ilona Wissenbach: Okay, thank you. The question on Germany is, if I am not mistaken, Eva, you mentioned earlier this year some optimism about impact from the German public stimulus infrastructure package. I was wondering, do you feel any effect? Is there anything to be observed? Also related now to the current situation with the drought and the River Rhine being almost dry, debating about putting more trucks on the road. Of course, I know you cannot order a truck and put it tomorrow on the road, but do you structurally expect more growth for truck transportation because of this?

Speaker #13: And I was wondering, do you feel any effect? Is there anything to be observed? And also, related now to the current situation with the drought and the river Rhine being almost dry—debating about putting more trucks on the road. Of course, I know you cannot order a truck and put it on the road tomorrow.

Speaker #13: But do you structurally expect more growth for truck transportation because of this?

Speaker #3: Thank you, Ilona. Good question. So, on Germany and the infrastructure measures, we've been waiting for a while to see them really be translated into order intake on our side.

Karin Rådström: Thank you, Ilona. Good question. On Germany and the infrastructure measures, we have been waiting for a while to see them really be translated into order intake on our side. The German market is up year-over-year, but we do not see that significant uptake that we still hope to see at one point. So far it has taken longer than we thought, and we have not also seen it in Q2. Germany is still, when we look at Europe as a whole, it is still comparably a bit weaker in the recovery than other European countries. When it comes to the River Rhine and the drought, one thing where it also affects us is logistics, because we need to make sure that in H2, where we expect higher volumes in Mercedes-Benz Trucks, that we get the trucks to our customers.

Eva Scherer: Thank you, Ilona. Good question. On Germany and the infrastructure measures, we have been waiting for a while to see them really be translated into order intake on our side. The German market is up year-over-year, but we do not see that significant uptake that we still hope to see at one point. So far it has taken longer than we thought, and we have not also seen it in Q2. Germany is still, when we look at Europe as a whole, it is still comparably a bit weaker in the recovery than other European countries. When it comes to the River Rhine and the drought, one thing where it also affects us is logistics, because we need to make sure that in H2, where we expect higher volumes in Mercedes-Benz Trucks, that we get the trucks to our customers.

Speaker #3: I mean, the German market is up year over year, but we do not see that significant uptake that we, well, still hope to see at one point. But so far, it's taken longer than we thought, and we also haven't seen it in Q2.

Speaker #3: So Germany is still, when we look at Europe as a whole, comparably a bit weaker in the recovery than other European countries.

Speaker #3: And when it comes to the River Rhine and the drought, I mean, one area where it also affects us is logistics, because we need to make sure that in the second half of the year, when we expect higher volumes in Mercedes-Benz Trucks, that we get the trucks to our customers.

Speaker #3: So, we've already taken measures for alternative routings on the road, instead of on the river, to make sure that our customers receive their trucks.

Karin Rådström: We have already taken measures for alternative routings on the road instead of on the river to make sure that our customers receive their trucks. Of course we are always looking at supporting where we can with providing as many trucks as we can on the road to support there.

Eva Scherer: We have already taken measures for alternative routings on the road instead of on the river to make sure that our customers receive their trucks. Of course we are always looking at supporting where we can with providing as many trucks as we can on the road to support there.

Speaker #3: And then, of course, we're always looking at supporting where we can by providing as many trucks as we can on the road to support there.

Speaker #13: Is this a lot, in terms of capacity, logistically? You have to replace because it's now difficult on the river with shipping.

Ilona Wissenbach: Is this a lot capacity logistically you have to replace because it is now difficult on the river with shipping?

Speaker #3: I mean, we have to see how it continues. We believe it will be manageable in the second half of the year. And most trucks—most trucks, we already transport today over road.

Karin Rådström: We have to see how it continues. We believe it will be manageable in H2 of the year.

Eva Scherer: We have to see how it continues. We believe it will be manageable in H2 of the year.

Ilona Wissenbach: Okay, thank you.

Karin Rådström: Most trucks we already transport today over road.

Ilona Wissenbach: Okay. Thanks.

Speaker #13: okay. Thanks.

Ilona Wissenbach: Okay. Thanks.

Speaker #12: The next question comes from Joachim Herr from Börsen-Zeitung. Please go ahead.

Operator: The next question comes from Joachim Herr from Börsen-Zeitung. Please go ahead.

Speaker #13: Thank you. Good morning. There’s one of my questions left regarding the plant, the new plant in the US. Are there already discussions you’re leading with the government, and do you expect any funding from the US government?

Joachim Herr: Thank you. Good morning. There is one of my questions left regarding the new plant in the US. Are there already discussions you are leading with the government, and do you expect any funding from the US government? Thank you.

Speaker #13: Thank you.

Speaker #3: Yes, they can take that one. So we are not doing this in order to get funding. And, as I think Eva mentioned, we're in the site selection process right now.

Karin Rådström: Yes, I can take that one. We are not doing this in order to get funding, and as I think Eva mentioned, we are in the site selection process right now. We have some sites in a number of different states. There could be states where you get some subsidies for building a plant. I would say that is not the main decisive lever for us. We look more at things like workforce availability, how its supply chain access is, of course, in relation to where our customers are, for logistics purposes, and as well as having the infrastructure in terms of roads, electricity, et cetera. That is mainly what we are looking at.

Speaker #3: And we have some sites in a number of different states. There could be states where you get some subsidies for building a plant, but I would say that's not the main decisive lever for us.

Speaker #3: We look more at things like workforce availability, how its supply chain access is, of course, in relation to where our customers are for logistics purposes, as well as having the infrastructure in terms of roads, electricity, etc.

Speaker #3: So, that's mainly what we're looking at.

Speaker #13: Thank you.

Joachim Herr: Thank you.

Speaker #12: The next question comes from Alexander Jungertz from Mannheimer Morgan. Please go ahead.

Operator: The next question comes from Alexander Jungert from Mannheimer Morgen. Please go ahead.

Speaker #13: Yes, hi. Hello to everyone. Just one question. Some German factories, like Mannheim, manufacture components for the US market. Will that share be reduced if you open a new plant in the US?

Alexander Jungert: Yes, hi. Hello to everyone. Just one question. Some German factories like Mannheim manufacture components for the US market. Will that share be reduced if you open a new plant in the US? Thank you.

Speaker #13: Thank you.

Speaker #3: Hi, Alexander. So, the plant that we are looking to open in the US is an assembly facility, and we don't foresee that this will affect the flow of components that we have today from Mannheim to Detroit.

Karin Rådström: Hi, Alexander. The plant that we are looking to open in the US is an assembly facility. We don't foresee that that will affect the flow of components that we have today from Mannheim to Detroit, where we build the American powertrain components. What I hope for is, of course, that this helps us grow our already strong position in the US so that we will be able to ship even more components in the future. I guess that's a little too early to say.

Speaker #3: Where we build the American powertrain components. What I hope for, of course, is that this helps us grow our already strong position in the US.

Speaker #3: So that we will be able to ship even more components in the future. But I guess that's a little too early to say.

Speaker #13: Thank you.

Alexander Jungert: Thank you.

Speaker #12: The next question comes from Robin Wille from DPR Deutsche Presse. Please go ahead.

Operator: The next question comes from Robin Wille from dpa Deutsche Presse-Agentur. Please go ahead.

Speaker #14: Hi, good morning. Robin Wille, Deutsche Presse-Agentur. Two questions from my side. First, why have order intake figures at Mercedes-Benz Trucks and Daimler Buses declined?

Robin Wille: Hi, good morning. Robin with the Deutsche Presse-Agentur. Two questions from my side. First, why have order intake figures at Mercedes-Benz Trucks and Daimler Buses declined? Second, can we assume that the new factory in the US will be built on the East Coast since that's where the customers and suppliers are located, as you just mentioned?

Speaker #14: And second, can we assume that the new factory in the US will be built on the East Coast, since that's where the customers and suppliers are located, as you just mentioned?

Speaker #3: Hi, Robin. Thanks for your question. So first, on the order intake for Mercedes-Benz Trucks: overall, we've had a very strong order intake for Mercedes-Benz Trucks in the first half of the year.

Karin Rådström: Hi, Robin. Thanks for your question. First, on the order intake for Mercedes-Benz Trucks. Overall, we've had a very strong order intake for Mercedes-Benz Trucks in the H1 of the year. It was extraordinarily strong in Q1, sequentially a bit weaker in Q2, we do overall see that we have a significantly higher backlog than we had a year ago, and that our production program for the H2 of the year is largely filled, and that we will get a significant volume growth there. With Daimler Buses, what we see there is that the European market is very strong when it comes to the integral bus business, we see that Brazil and Mexico, the markets are very weak.

Eva Scherer: Hi, Robin. Thanks for your question. First, on the order intake for Mercedes-Benz Trucks. Overall, we've had a very strong order intake for Mercedes-Benz Trucks in the H1 of the year. It was extraordinarily strong in Q1, sequentially a bit weaker in Q2, we do overall see that we have a significantly higher backlog than we had a year ago, and that our production program for the H2 of the year is largely filled, and that we will get a significant volume growth there. With Daimler Buses, what we see there is that the European market is very strong when it comes to the integral bus business, we see that Brazil and Mexico, the markets are very weak.

Speaker #3: It was extraordinarily strong in Q1. Sequentially, a bit weaker in Q2, but we do overall see that we have a significantly higher backlog than we had a year ago.

Speaker #3: And that our production program for the second half of the year is largely filled, and that we will get significant volume growth there.

Speaker #3: With Daimler Buses, what we see there is that the European market is very strong when it comes to the integral bus business. But we see that in Brazil and Mexico, the markets are very weak.

Speaker #3: And this is affecting us from a unit sales perspective. But you see also that in revenue, we are compensating for this because the European bus business has higher average selling prices per bus than the chassis business that we do in Brazil and in Mexico.

Eva Scherer: This is affecting us from a unit sales perspective. You see also that in revenue, we are compensating this because the European bus business, it has higher average selling prices per bus than the chassis business that we do in Brazil and in Mexico. When it comes to the new factory in the US, we haven't finalized our site selection yet, so I cannot tell you yet where it will be. Once we have decided, we will also let you know.

Speaker #3: And when it comes to the new factory in the US, we haven't finalized our site selection yet, so I cannot tell you yet where it will be.

Speaker #3: But once we have decided, we will also let you know.

Speaker #1: All right. That was the last question in the queue, but I do want to give a few seconds for any last inquiries. Please insert them now.

[Company Representative] (Daimler Truck): All right. That was the last question in the queue, but I do want to give a few seconds for any last inquiries. Please insert them now. All right. That looks like it's it. Ladies and gentlemen, thank you very much for your questions and for being with us today. Thank you very much, both Karin and Eva, for answering the questions. Now, as always, the IR team and the communications teams remain at your disposal to answer any further questions you might have. A recording of the session will be available later today on our Daimler Truck website. We are looking forward to staying in contact with you. Have a great day and stay healthy. Thank you and goodbye.

Speaker #1: All right. That looks like it. So, ladies and gentlemen, thank you very much for your questions and for being with us today. Thank you very much, both Karen and Eva, for answering the questions.

Speaker #1: Now, as always, the IR team and the communications team remain at your disposal to answer any further questions you might have. A recording of the session will be available later today on our Daimler Truck website.

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