Mercedes-Benz Q1 Marked by Solid Cash Generation and Top-End Model Changeovers
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Performance: Q1 adjusted Return on Sales (RoS) reached 9.0% (Q1 2023: 14.8%) at Mercedes-Benz Cars and 16.3% at
Mercedes-Benz Vans (Q1 2023: 15.6%); Mercedes-Benz Mobility adjusted Return on Equity (RoE) at 8.5% (Q1 2023: 15.6%). - New products: World premieres for the electric G-Class1 and all new G-Class; EQS model upgrades; AMG GT Coupes and E-Class AMG models unveiled.
- Share buyback update: By the third quarter 2024 buybacks are expected to reach a total of €4 billion and to reach the targeted €7 billion in Q1 2025 before the Annual General Meeting.
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Outlook unchanged:
Mercedes-Benz Group revenue in 2024 seen remaining at the prior-year level; Group EBIT and Free Cash Flow from the Industrial Business expected slightly below prior-year level;Mercedes-Benz Cars adjusted Return on Sales (RoS) expected at 10% - 12%;Mercedes-Benz Vans adjusted Return on Sales seen at 12% - 14% and Mercedes-Benz Mobility adjusted Return on Equity seen at 10% - 12%.
“Mercedes-Benz delivered a solid Free Cash Flow in the first quarter thanks to our disciplined go-to-market approach, our desirable products and despite the volatile economic environment and external challenges. While we remain vigilant about the global macroeconomic and geopolitical outlook, we confirm our full-year financial targets for 2024.”
|
Q1 2024 |
Q1 2023 |
Change 24/23 |
Revenue* |
35,873 |
37,516 |
-4.4% |
Earnings before Interest and Taxes (EBIT)* |
3,863 |
5,504 |
-29.8% |
Earnings before Interest and Taxes (EBIT) adjusted* |
3,598 |
5,422 |
-33.6% |
Net profit/loss* |
3,025 |
4,011 |
-24.6% |
Free Cash Flow (industrial business)* |
2,233 |
2,164 |
+3.2% |
Earnings per share (EPS) in EUR |
2.86 |
3.69 |
-22.5% |
*in millions of € |
Investments, Free Cash Flow, Net Liquidity
The Free Cash Flow from the Industrial Business in the first quarter reached €2.23 billion (Q1 2023: €2.16 billion), supported by an adjusted Cash Conversion rate of 1.0 at Mercedes-Benz Cars.
The Net Liquidity from the Industrial Business rose by 6% to a strong and very comfortable level of €33.6 billion (end of 2023: €31.7 billion). This included a share buyback of approximately €300 million in the first quarter. The Group’s investments in property, plant and equipment in the first quarter totalled €0.7 billion (Q1 2023: €0.8 billion). Research and development expenditure fell to €2.2 billion (Q1 2023: €2.5 billion).
Divisional results
Earnings Before Interest and Taxes at Mercedes-Benz Cars reached €2.5 billion (Q1 2023: €4.1 billion)and resulted in an adjusted Return on Sales of 9.0% (Q1 2023: 14.8%) mainly due to a temporary decline in volumes and model transitions in the Top-End segment as well as higher lifecycle management costs to keep products at the cutting edge. Top-End vehicles were constrained by model changeovers of the G-Class as well as the Mercedes-AMG derivatives of the E-Class and GLC, as well as supply-chain bottlenecks.
Overall, pricing remained at a high level in Q1. Sales are expected to increase in the coming quarters with the Top-End vehicle mix expected to improve in the second half of the year. The EV adoption rate has slowed across the industry. In the transition from ICE to BEV vehicles, Mercedes-Benz plug-in hybrids are expected to play an important role. In Q1 Mercedes-Benz initiated BEAT26, an efficiency program to lower material costs in procurement, in close collaboration with its suppliers.
|
Q1 2024 |
Q1 2023 |
Change 24/23 |
Sales in units |
462,978 |
503,483 |
-8.0% |
- thereof xEV |
90,177 |
91,698 |
-1.7% |
- thereof BEV |
47,521 |
51,639 |
-8.0% |
Share of xEV in unit sales in % |
19.5 |
18.2 |
- |
Revenue* |
25,713 |
27,812 |
-7.5% |
Earnings Before Interest and Taxes (EBIT)* |
2,456 |
4,148 |
-40.8% |
Earnings Before Interest and Taxes (EBIT) adjusted* |
2,323 |
4,113 |
-43.5% |
Return on Sales (RoS) in % |
9.6 |
14.9 |
-5.3%pts |
Return on Sales (RoS) adjusted in % |
9.0 |
14.8 |
-5.8%pts |
Cash Flow Before Interest and Taxes (CFBIT)* |
2,297 |
2,981 |
-22.9% |
Cash Flow Before Interest and Taxes (CFBIT) adjusted* |
2,341 |
3,020 |
-22.5% |
Cash Conversion Rate adjusted |
1.0 |
0.7 |
- |
*in millions of € |
|
Q1 2024 |
Q1 2023 |
Change 24/23 |
Sales in units |
105,425 |
98,885 |
+6.6% |
Share of xEV in unit sales in % |
2.8 |
3.6 |
- |
Revenue* |
4,893 |
4,615 |
+6.0% |
Earnings before Interest and Taxes (EBIT)* |
933 |
762 |
+22.4% |
Earnings before Interest and Taxes (EBIT) adjusted* |
800 |
719 |
+11.3% |
Return on Sales (RoS) in % |
19.1 |
16.5 |
+2.6%pts |
Return on Sales (RoS) adjusted in % |
16.3 |
15.6 |
+0.7%pts |
Cash Flow Before Interest and Taxes (CFBIT)* |
643 |
410 |
+56.8% |
Cash Flow Before Interest and Taxes (CFBIT) adjusted* |
688 |
450 |
+52.9% |
Cash Conversion Rate adjusted |
0.9 |
0.6 |
- |
*in millions of € |
Compared to the first quarter of the previous year, Mercedes-Benz Mobility almost doubled its new business volume for BEVs to €2.0 billion (Q1 2023: €1.2 billion). Overall, at the end of
Mercedes-Benz Mobility |
Q1 2024 |
Q1 2023 |
Change 24/23 |
Revenue* |
6,855 |
6,639 |
+3.3% |
New business* |
14,750 |
14,701 |
+0.3% |
Contract volume (March, 31)* |
134,672 |
131,267 |
+2.6% |
Earnings before Interest and Taxes (EBIT)* |
279 |
539 |
-48.2% |
Earnings before Interest and Taxes (EBIT) adjusted* |
279 |
539 |
-48.2% |
Return on Equity (RoE) in % |
8.5 |
15.6 |
-7.1%pts |
Return on Equity (RoE) adjusted in % |
8.5 |
15.6 |
-7.1%pts |
*in millions of € |
Share buyback execution update
On
Outlook
The economic situation and automotive markets continue to be characterised by a degree of uncertainty. In addition to unexpected macroeconomic developments, uncertainties for the global economy and the business development of
The company sees unit sales of
In
In
In
The xEV share is expected to remain at approximately 19% - 21% of new car sales, even as production of the all-electric smart fortwo model came to an end in March.
The adjusted Return on Sales (RoS) is expected in the range of 10% - 12%. An increase in sales volume over the coming quarters and an improvement in product mix in the second half of 2024 is expected. Mercedes-Benz wants to hold and defend pricing at current levels.
Some material tailwinds on raw material costs are seen and further headwinds on supply-chain related costs are expected. On a full-year basis a tailwind is expected on material costs.
Research & Development spending is expected to be flat. Investments in property plant & equipment are seen significantly higher.
The adjusted cash conversion rate (CCR) corridor for
Strong Q1 performance at
The adjusted Return on Equity at Mercedes-Benz Mobility is seen unchanged in the range of 10% - 12%. Q1 is seen as the trough, with improvements expected over the second half of 2024, despite increasing ramp-up costs for charging infrastructure. Coming from 8.5% adj. RoE in Q1, positive effects from increased acquisition margins are expected on the portfolio margin. The cost of credit risk is seen improving from Q1 levels but is expected at an overall higher level compared to 2023.
The
Link to press information “Sales figures Q1 2024”: media.mercedes-benz.com/sales
Link to capital market presentation Q1 2024: group.mercedes-benz.com/q1-2024/en
[1] The all-new
Further information on
media.mercedes-benz.com and group.mercedes-benz.com
Forward-looking statements:
This document contains forward-looking statements that reflect our current views about future events. The words “anticipate”, “assume”, “believe”, “estimate”, “expect”, “intend”, “may”, “can”, “could”, “plan”, “project”, “should” and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a negative change in market conditions in our most important markets; a deterioration of our refinancing possibilities on the credit and financial markets; events of force majeure including natural disasters, pandemics, acts of terrorism, political unrest, armed conflicts, industrial accidents and their effects on our sales, purchasing, production or financial services activities; changes in currency exchange rates, customs and foreign trade provisions; changes in laws, regulations and government policies (or changes in their interpretation), particularly those relating to vehicle emissions, fuel economy and safety or to ESG reporting (environmental, social or governance topics); price increases for fuel, raw materials or energy; disruption of production due to shortages of materials or energy, labour strikes or supplier insolvencies; a shift in consumer preferences towards smaller, lower-margin vehicles; a limited demand for all-electric vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilize our production capacities; a decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization measures; the business outlook for companies in which we hold a significant equity interest; the successful implementation of strategic cooperations and joint ventures; the resolution of pending governmental investigations or of investigations requested by governments and the outcome of pending or threatened future legal proceedings; and other risks and uncertainties, some of which are described under the heading “Risk and Opportunity Report” in the current Annual Report or in this Interim Report. If any of these risks and uncertainties materializes or if the assumptions underlying any of our forward-looking statements prove to be incorrect, the actual results may be materially different from those we express or imply by such statements. We do not intend or assume any obligation to update these forward-looking statements since they are based solely on the circumstances at the date of publication.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240429275433/en/
Willem Spelten, +49 151 58624395, willem.spelten@mercedes-benz.com
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