Mercedes-Benz Group 2023 Results*: Cash Generation at Work
- Cash generation: Strong Free Cash Flow of the Industrial Business up 39% at €11.3 billion (2022: €8.1 billion) and Net Industrial Liquidity up 19% at €31.7 billion (2022: €26.6 billion)
- Full year performance: Group revenue increased by 2% to €153.2 billion (2022: €150.0 billion) and Group EBIT amounted to €19.7 billion (2022: €20.5 billion)
-
Profitability:
Mercedes-Benz Cars adjusted Return on Sales (RoS) reaches 12.6% (2022: 14.6%), 15.1% forMercedes-Benz Vans (2022: 11.2%), and an adjusted Return on Equity (RoE) of 12.3% for Mercedes-Benz Mobility (2022: 16.8%) -
Sales 2023:
Mercedes-Benz Cars and Vans sales increased 1.5% to 2,491,800 vehicles; BEV sales rose +61% to 240,700 units (2022: 149,200); eVans sales +51% to 22,700 units (2022: 15,000) - Dividend: Dividend of €5.30 per share proposed (2022: €5.20)
- Share buyback: Shares worth up to €3 billion to be repurchased, new buyback policy introduced
-
Outlook 2024: Group Revenue expected at prior-year level, Group EBIT seen slightly below 2023 level, Free Cash Flow of the Industrial Business expected slightly below prior-year level,
Mercedes-Benz Cars adjusted RoS seen in the range of 10% - 12%,Mercedes-Benz Vans adjusted RoS seen at 12% - 14% and Mercedes-Benz Mobility adjusted RoE at 10% - 12%
”Mercedes-Benz continued its transformation in 2023, developing new cutting-edge electric and digital innovations, while scaling electric vehicles and delivering solid financial results. In other words, the team once again came through to execute our strategy in challenging times, delivering the eSprinter and the new E-Class. At the same time, we prepared the ground for next-generation products and platforms like VAN.EA and MB.OS. to keep Mercedes-Benz at the forefront of the industry.”
Ola Kaellenius, Chief Executive Officer of
*The figures in this document are preliminary and have neither been approved yet by the Supervisory Board nor audited by the external auditor.
|
Q4 2023 |
Q4 2022 |
Change
|
FY
|
FY
|
Change
|
Revenue* |
40,261 |
41,003 |
-1.8% |
153,218 |
150,017 |
+2.1% |
Earnings before Interest and Taxes (EBIT)* |
4,326 |
5,411 |
-20.1% |
19,660 |
20,458 |
-3.9% |
Earnings before Interest and Taxes (EBIT) adjusted* |
4,456 |
5,071 |
-12.1% |
20,004 |
20,655 |
-3.2% |
Net profit/loss* |
3,160 |
4,027 |
-21.5% |
14,531 |
14,809 |
-1.9% |
Free Cash Flow (industrial business) * |
3,442 |
2,479 |
+38.8% |
11,316 |
8,128 |
+39.2% |
Earnings per share (EPS) in EUR |
2.99 |
3.72 |
-19.7% |
13.46 |
13.55 |
-0.7% |
*in millions of € |
Investments, Free Cash Flow and Net Liquidity
The Free Cash Flow of the Industrial Business reached €11.3 billion (2022: €8.1 billion) mainly due to high profitability, a high cash conversion rate and lower working capital. The Net Liquidity of the Industrial Business rose to €31.7 billion (end of 2022: €26.6 billion). Group investments in property, plant and equipment in the full year totaled €3.7 billion (2022: €3.5 billion). Research & Development expenditure amounted to €10.0 billion (2022: €8.5 billion).
Transformation
Mercedes-Benz gained certification for its SAE Level 3 conditionally automated driving system for use on freeways in
Divisional results
The adjustedEarnings Before Interest and Taxes at
Research and Development costs rose for future platforms and technologies, particularly for MB.OS. Net pricing increased significantly with the average sales price up 2% to €74,200 in 2023 and remained positive on a healthy level also in the fourth quarter.
Overall sales volumes remained flat, reaching2,044,100 units in 2023 and included a sales increase for Mercedes-Maybach (+19%), G-Class (+11%) and Mercedes-AMG (+4%). The model mix remained flat, but on a high level, with Top-End vehicle sales reaching 328,300 last year. The S-Class remains the undisputed leader in its segment, retaining its market share with around 50% in all key regions. Battery electric vehicles now account for 12% of overall
The adjusted Cash Flow Before Interest and Taxes (CFBIT) of
|
Q4 2023 |
Q4 2022 |
Change
|
FY
|
FY
|
Change
|
Sales in units |
514,258 |
536,181 |
-4.1% |
2,044,051 |
2,040,719 |
+0.2% |
- thereof xEV |
112,043 |
111,046 |
+0.9% |
401,943 |
333,490 |
+20.5% |
- thereof BEV |
66,197 |
53,539 |
+23.6% |
240,668 |
149,227 |
+61.3% |
Revenue* |
29,569 |
30,557 |
-3.2% |
112,756 |
111,601 |
+1.0% |
Earnings Before Interest and Taxes (EBIT)* |
2,912 |
4,243 |
-31.4% |
14,224 |
16,340 |
-12.9% |
Earnings Before Interest and Taxes (EBIT) adjusted* |
2,970 |
4,088 |
-27.3% |
14,252 |
16,245 |
-12.3% |
Return on Sales (RoS) in % |
9.8 |
13.9 |
-4.1%pts |
12.6 |
14.6 |
-2.0%pts |
Return on Sales (RoS) adjusted in % |
10.0 |
13.4 |
-3.4%pts |
12.6 |
14.6 |
-2.0%pts |
Cash Flow Before Interest and Taxes (CFBIT)* |
3,438 |
3,104 |
+10.8% |
12,336 |
10,718 |
+15.1% |
Cash Flow Before Interest and Taxes (CFBIT) adjusted* |
3,478 |
3,233 |
+7.6% |
12,535 |
11,413 |
+9.8% |
Cash Conversion Rate adjusted |
1.2 |
0.8 |
- |
0.9 |
0.7 |
- |
*in millions of € |
Revenue at
The strong financial performance is a result of strong product substance, a healthy price premium and product mix, robust net pricing and lower raw material costs. These factors, combined with efficiency measures, helped to offset higher inflation-related and logistic costs. In line with the value growth strategy to focus on premium segments, large Vans dominated sales, resulting in record sales in the
In
|
Q4 2023 |
Q4 2022 |
Change
|
FY
|
FY
|
Change
|
Sales in units |
124,317 |
122,733 |
+1.3% |
447,790 |
415,344 |
+7.8% |
Revenue* |
5,611 |
5,114 |
+9.7% |
20,288 |
17,217 |
+17.8% |
Earnings before Interest and Taxes (EBIT)* |
855 |
670 |
+27.6% |
3,138 |
1,897 |
+65.4% |
Earnings before Interest and Taxes (EBIT) adjusted* |
809 |
501 |
+61.5% |
3,063 |
1,927 |
+59.0% |
Return on Sales (RoS) in % |
15.2 |
13.1 |
+2.1%pts |
15.5 |
11.0 |
+4.5%pts |
Return on Sales (RoS) adjusted in % |
14.4 |
9.8 |
+4.6%pts |
15.1 |
11.2 |
+3.9%pts |
Cash Flow Before Interest and Taxes (CFBIT)* |
650 |
665 |
-2.3% |
2,817 |
1,731 |
+62.7% |
Cash Flow Before Interest and Taxes (CFBIT) adjusted* |
714 |
741 |
-3.6% |
3,018 |
2,040 |
+47.9% |
Cash Conversion Rate adjusted |
0.9 |
1.5 |
- |
1.0 |
1.1 |
- |
*in millions of € |
Mercedes-Benz Mobility saw new business increase by 7% to €62.0 billion (2022: €58.0 billion) in a competitive market environment with above average penetration rates for financed or leased electric vehicles. The total portfolio grew in 2023 to €135.0 billion (2022: €132.4 billion). Performance was impacted by a lower portfolio margin due to higher refinancing rates and intensified competition in the financial services sector, resulting in adjusted Earnings Before Interest and Taxes of €1.7 billion (2022: €2.4 billion). The expenses for the establishment of charging activities also had an effect on EBIT. The charging business continued its global ramp up with high-power charging stations opening in
Mercedes-Benz Mobility |
Q4 2023 |
Q4 2022 |
Change
|
FY
|
FY
|
Change
|
Revenue* |
7,012 |
6,858 |
+2.2% |
26,718 |
26,954 |
-0.9% |
New business* |
16,715 |
15,121 |
+10.5% |
62,014 |
58,031 |
+6.9% |
Contract volume (December, 31)* |
135,027 |
132,379 |
+2.0% |
135,027 |
132,379** |
+2.0% |
Earnings before Interest and Taxes (EBIT)* |
228 |
494 |
-53.8% |
1,302 |
2,428 |
-46.4% |
Earnings before Interest and Taxes (EBIT) adjusted* |
345 |
494 |
-30.2% |
1,695 |
2,428 |
-30.2% |
Return on Equity (RoE) in % |
6.8 |
14.0 |
-7.2%pts |
9.5 |
16.8 |
-7.3%pts |
Return on Equity (RoE) adjusted in % |
10.3 |
14.0 |
-3.7%pts |
12.3 |
16.8 |
-4.5%pts |
*in millions of €
|
Dividend
At the Annual General Meeting on
Share buyback policy
Mercedes-Benz has resolved to implement a new buyback policy. Any future free cash flow from the industrial business as available (post potential small-scale M&A) beyond the approx. 40 percent dividend payout ratio of Group Net Income, shall be used to fund share buybacks with the purpose of redeeming shares.
In this context, Mercedes-Benz has also announced an additional share buyback program to repurchase own shares worth up to €3 billion (not including incidental costs) on the stock exchange. The repurchased shares shall subsequently be cancelled.
The buyback will be based on the authorization by the Annual General Meeting of
The company intends to ask for a renewal of the authorization for Share Buybacks at the Annual General Meeting in 2025 to further continue Share Buybacks in line with the company’s Share Buyback policy. This Share Buyback policy targets continuous growth of Earnings Per Share (EPS) and Dividend Per Share (DPS) over the next years. With any Share Buyback Program the company will keep flexibility on the execution in case of unexpected market developments.
Outlook
The economic situation and automotive markets continue to be characterized by an exceptional degree of uncertainty. Unexpected developments may arise in particular from geopolitical events and trade policy. Among them are the current
From 2024 onwards, Mercedes-Benz will introduce a new guidance KPI: An xEV share for sales of new Cars and Vans. This will replace the current CO2 emissions KPI for the new car fleet in
Sales guidance: The company sees unit sales of
The xEV share is expected to remain at approximately 19% - 21% of new car sales.
The adjusted Return on Sales (RoS) is expected in the range of a solid 10% - 12% in a demanding environment on flat volumes and a continued high share of Top-End Vehicle sales.
The adjusted cash conversion rate (CCR) corridor for
Total
Investment in property, plants & equipment and research & development spending are seen significantly above the prior-year level due to investments into the purpose-built electric architecture called VAN.EA.
The adjusted RoS is seen in the range of 12% - 14%. Net pricing and mix are expected to develop solidly and the adjusted CCR for
The portfolio volume of Mercedes-Benz Mobility is seen on the same level as 2023 with slightly positive new business development. The adjusted Return on Equity is seen in the range of 10% - 12%. The interest margin remains under pressure in the first half of 2024. The deteriorating acquisition margin has started to improve, although it takes time for this to feed through to the portfolio. For Q1 Mercedes-Benz Mobility expects a margin below the full year guidance corridor.
The
Strategic priorities
Mercedes-Benz will continue to focus on its brand promise: to build the world’s most desirable cars. Mercedes-Benz will remain strategically focused and tactically flexible and is taking the necessary steps to go all electric. Customers and market conditions will set the pace of the transformation. The company plans to be in a position to cater to different customer needs, whether it’s an all-electric drivetrain or an electrified combustion engine, until well into the 2030s.
The company expects xEV sales to reach up to 50% of overall sales in the second half of the decade. Factories are retooled to follow demand to capture the tipping point into an all-electric era. Mercedes-Benz has set the course with the development of several new vehicle platforms. The starting point will be next year with the all-new electric CLA. While the upcoming models will set standards in improving efficiency and charging time, the company believes that the battery costs per kilowatt hour can be reduced by more than 30% in the next few years, thanks to optimized cell and module design, improved vehicle integration, further development of cell chemistries (e.g. NMC, next generation LFP), cell updates during the lifecycle and continuous improvement agreements with suppliers.
On the digital side, the company-owned operating system MB.OS is expected to mark an important milestone in the field of car software. Moreover, Mercedes-Benz will continue to pioneer advancements in automated driving. Mercedes-Benz will continue to optimize its industrial footprint and cost base, for example by working on structurally lower material costs in close collaboration with its suppliers.
By implementing this strategy, Mercedes-Benz expects to deliver on the essence of the brand: a unique combination of iconic luxury and leading technology.
Link to press release “Sales figures 2023”: group-media.mercedes-benz.com/annual sales
Link to capital market presentation on full year 2023: group.mercedes-benz.com/results-2023
Pictures of the Annual Results Conference 2023 will be available here: group-media.mercedes-benz.com
Further information on
group-media.mercedes-benz.comand 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, labor 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. 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/20240221094253/en/
Willem Spelten, +49 151 58624395, willem.spelten@mercedes-benz.com
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