STUTTGART, Germany--(BUSINESS WIRE)--Mercedes-Benz Group AG (ticker symbol: MBG) achieved solid third-quarter results in a subdued market environment marked by intense price competition, particularly in the electric vehicle segment. Earnings Before Interest and Taxes (EBIT) reached €4.8 billion (Q3 2022: €5.2 billion) as improved net pricing at Mercedes-Benz Cars and a rise in sales of premium vans helped to partially offset higher inflation, currency effects and supply-chain related costs. Revenue fell 1.4% to €37.2 billion (Q3 2022: €37.7 billion) in part because passenger car sales were around 5% lower in the quarter, due to a supplier-induced shortage of 48-volt systems.
Mercedes-Benz continues to pursue its strategy of profitable growth. Thanks to strong sales of Mercedes-Maybach and G-Class vehicles in the Top-End and good pricing overall, the adjusted Return on Sales (RoS) at Mercedes-Benz Cars reached 12.4% (Q3 2022: 14.5%). With an adjusted RoS of 15.0% (Q3 2022: 12.7%), Mercedes-Benz Vans once again benefited from solid demand and a favorable model mix.
“The team at Mercedes-Benz delivered solid results despite a challenging environment. We continue to demonstrate resilience thanks to desirable products and a disciplined go-to-market approach. While we remain vigilant regarding the macroeconomic outlook, we confirm our full-year financial targets for 2023.”
Harald Wilhelm, Chief Financial Officer of Mercedes-Benz Group AG
Transformation
At the IAA in Munich, Mercedes-Benz showcased how it will redefine the segment with its Concept CLA Class, an electric car with efficiency of around 12kWh/100km, giving it a range of more than 750 kilometers (WLTP)1. To accelerate the shift to electric mobility Mercedes-Benz is building its own global charging network. It opened its first charging hub a few days ago in Chengdu (China). Atlanta (USA) and Mannheim (Germany) will follow in a few weeks. To further demonstrate the outstanding safety of its electric cars, Mercedes-Benz conducted the first live, frontal-offset crash test involving two electric vehicles. The passenger safety cell of both electric models remained intact and the doors could still be opened. In an emergency, this would make it possible for occupants to exit the vehicle on their own or for first responders and rescue personnel to reach them. The high-voltage system in the EQA and the EQS SUV switched off automatically during the collision.
|
Mercedes-Benz Group |
Q3-2023 |
Q3-2022 |
Change |
Q1-Q3 2023 |
Q1-Q3 2022 |
Change |
|
Revenue* |
37,200 |
37,716 |
-1.4% |
112,957 |
109,014 |
+3.6% |
|
Earnings before Interest and Taxes (EBIT)* |
4,842 |
5,196 |
-6.8% |
15,334 |
15,047 |
+1.9% |
|
Earnings before Interest and Taxes (EBIT) adjusted* |
4,915 |
5,344 |
-8.0% |
15,548 |
15,584 |
-0.2% |
|
Net profit/loss* |
3,719 |
3,998 |
-7.0% |
11,371 |
10,782 |
+5.5% |
|
Free cash flow (industrial business)* |
2,347 |
3,016 |
-22.2% |
7,874 |
5,649 |
+39.4% |
|
Free cash flow (industrial business) adjusted* |
2,449 |
3,309 |
-26.0% |
8,173 |
6,588 |
+24.1% |
|
Earnings per share (EPS) in EUR |
3.44 |
3.66 |
-6.0% |
10.47 |
9.83 |
+6.5% |
|
*in millions of € |
Investments, free cash flow, liquidity
The free cash flow of the industrial business in the third quarter reached €2.3 billion (Q3 2022: €3.0 billion) on lower passenger car sales and higher investments into future technologies.
The net liquidity of the industrial business rose to €28.5 billion (end of 2022: €26.6 billion). The Group’s investments into property, plant and equipment in the third quarter totalled €0.9 billion (Q3 2022: €0.8 billion). Research and development expenditure amounted to €2.5 billion (Q3 2022: €2.3 billion) due to higher investments in future platforms and technologies, including MB.OS.
Divisional results
Mercedes-Benz Cars Q3 revenue dipped 3.8% on lower vehicle deliveries, narrowing adjusted Earnings Before Interest and Taxes to €3.3 billion (Q3 2022 €4.0 billion). The average selling price remained stable in Q3 compared to the prior-year quarter reaching approximately €74,600 (Q3 2022: €75,400) and even rose slightly from approximately €73,500 in the second quarter. Healthy net pricing partially offset slightly lower volumes and the change in model mix. A €329 million headwind from foreign exchange further dampened earnings. Overall sales of Mercedes-Benz Cars reached 1,529,800 units in the first nine months of the year (+2%), and 510,600 units (-4%) in the third quarter. Volumes were impacted by a model changeover for the E-Class and a supplier bottleneck which constrained availability of the GLC in particular.
Mercedes-Benz continues to defend its leadership position in the Top-End Vehicle segment where the S-Class enjoys a market share of above 50% in China. Overall, Top-End Vehicle sales are expected to increase on a full-year basis.
In Q3, S-Class wholesale deliveries were impacted by a seasonal slowdown, temporary certification matters and the macroeconomic environment. However, S-Class sales were up 9% in China and retail sales in the U.S. rose 48% in the quarter.
In the Top-End segment Mercedes-Benz sales reached 246,500 units (+6%) in the first nine months of the year and 69,900 units in Q3 (-11%) as Mercedes-AMG sales were impacted by model changeovers of the GLC, the E-Class and entry models in China. By contrast, Mercedes-AMG BEV sales rose by 51% in the third quarter. Mercedes-Benz continues to expand the market for Top-End electric vehicles, with the Mercedes EQS SUV seeing a 162% rise in sales with strong growth in all regions. In the U.S., registrations of the EQS outpaced those of its main Top End peers in the first nine months of the year.
In the Core segment, Q3 sales reached 290,200 units (-1%) and in the Entry segment sales reached 150,500 units (-5%) as the A- and B-Class models received a mid-lifecycle makeover. The company presented the AMG GT Coupe and an all-new E-Class Estate.
|
Mercedes-Benz Cars |
Q3-2023 |
Q3-2022 |
Change |
Q1-Q3 2023 |
Q1-Q3 2022 |
Change |
||||||
|
Sales in units |
510,564 |
530,414 |
-3.7% |
1,529,793 |
1,504,538 |
+1.7% |
||||||
|
- thereof xEV |
102,292 |
84,850 |
+20.6% |
289,900 |
222,444 |
+30.3% |
||||||
|
- thereof BEV |
61,621 |
37,069 |
+66.2% |
174,471 |
95,688 |
+82.3% |
||||||
|
Revenue* |
27,131 |
28,209 |
-3.8% |
83,187 |
81,044 |
+2.6% |
||||||
|
Earnings before Interest and Taxes (EBIT)* |
3,312 |
4,034 |
-17.9% |
11,312 |
12,097 |
-6.5% |
||||||
|
Earnings before Interest and Taxes (EBIT) adjusted* |
3,357 |
4,081 |
-17.7% |
11,282 |
12,157 |
-7.2% |
||||||
|
Return on Sales (RoS) in % |
12.2 |
14.3 |
-2.1%pts |
13.6 |
14.9 |
-1.3%pts |
||||||
|
Return on Sales (RoS) adjusted in % |
12.4 |
14.5 |
-2.1%pts |
13.6 |
15.0 |
-1.4%pts |
||||||
|
Cash Flow Before Interest and Taxes (CFBIT)* |
2,148 |
3,374 |
-36.3% |
8,898 |
7,614 |
+16.9% |
||||||
|
Cash Flow Before Interest and Taxes (CFBIT) adjusted* |
2,195 |
3,552 |
-38.2% |
9,057 |
8,180 |
+10.7% |
||||||
|
Cash Conversion Rate adjusted |
0.7 |
0.9 |
- |
0.8 |
0.7 |
- |
||||||
|
*in millions of € |
||||||||||||
Mercedes-Benz Vans increased its global sales in the third quarter of 2023 to 105,100 units (+1%) thanks to a strong contribution from commercial vans. Global sales of all-electric vans doubled to 6,300 units (Q3 2022: 3,100). All-electric sales accounted for 6% of total sales. In the strategically important U.S. market, the division sold 21,800 (Q3 2022: 15,500) units reaching the best sales quarter ever. Thanks to solid net prices, improved product mix and lower raw material costs, EBIT increased to €715 million (+44%) and was able to offset inflation and supply chain-related cost increases. Adjusted for non-recurring items, EBIT rose by 36% to €743 million. Revenue was up to €4.9 billion, 15% higher than in the prior-year quarter. This development resulted in a Return on Sales of 14.5% and an adjusted RoS of 15% respectively. Third-quarter cash flow amounted to €980 million and adjusted cash flow amounted to €1.04 billion.
|
Mercedes-Benz Vans |
Q3-2023 |
Q3-2022 |
Change |
Q1-Q3 2023 |
Q1-Q3 2022 |
Change |
||||||
|
Sales in units |
105,083 |
103,978 |
+1.1% |
323,473 |
292,611 |
+10.5% |
||||||
|
Revenue* |
4,939 |
4,309 |
+14.6% |
14,677 |
12,103 |
+21.3% |
||||||
|
Earnings before Interest and Taxes (EBIT)* |
715 |
497 |
+43.9% |
2,283 |
1,227 |
+86.1% |
||||||
|
Earnings before Interest and Taxes (EBIT) adjusted* |
743 |
546 |
+36.1% |
2,254 |
1,426 |
+58.1% |
||||||
|
Return on Sales (RoS) in % |
14.5 |
11.5 |
+3.0%pts |
15.6 |
10.1 |
+5.5%pts |
||||||
|
Return on Sales (RoS) adjusted in % |
15.0 |
12.7 |
+2.3%pts |
15.4 |
11.8 |
+3.6%pts |
||||||
|
Cash Flow Before Interest and Taxes (CFBIT)* |
980 |
434 |
+125.8% |
2,167 |
1,066 |
+103.3% |
||||||
|
Cash Flow Before Interest and Taxes (CFBIT) adjusted* |
1,035 |
529 |
+95.7% |
2,304 |
1,299 |
+77.4% |
||||||
|
Cash Conversion Rate adjusted |
1.4 |
1.0 |
- |
1.0 |
0.9 |
- |
||||||
|
*in millions of € |
||||||||||||
In the third quarter of 2023 Mercedes-Benz Mobility’s new business increased to €15.2 billion and is above the level of the prior-year period (Q3 2022: €14.3 billion). The contract volume of Mercedes-Benz Mobility amounted to €133.8 billion at the end of September, matching the level at the end of the previous year (FY 2022: €132.4 billion). At €363 million, the adjusted EBIT was below the previous years level (Q3 2022: €577 million), a decrease mainly caused by higher refinancing rates and intensified competition in the financial services sector. In addition, the cost of credit risk is elevated, driven by a weakening macroeconomic environment as well as higher delinquencies in some markets. This combined with negative foreign exchange effects, resulted in a decrease of the adjusted Return on Equity (RoE) to 10.4% (Q3 2022: 15.8%).
| Mercedes-Benz Mobility |
Q3-2023 |
Q3-2022 |
Change |
Q1-Q3 2023 |
Q1-Q3 2022 |
Change |
|
Revenue* |
6,561 |
6,599 |
-0.6% |
19,706 |
20,096 |
-1.9% |
|
New business* |
15,183 |
14,255 |
+6.5% |
45,299 |
42,910 |
+5.6% |
|
Contract volume (September, 30)* |
133,840 |
135,731 |
-1.4% |
133,840 |
132,379** |
+1.1% |
|
Earnings before Interest and Taxes (EBIT)* |
363 |
577 |
-37.1% |
1,074 |
1,934 |
-44.5% |
|
Earnings before Interest and Taxes (EBIT) adjusted* |
363 |
577 |
-37.1% |
1,350 |
1,934 |
-30.2% |
|
Return on Equity (RoE) in % |
10.4 |
15.8 |
-5.4%pts |
10.3 |
17.7 |
-7.4%pts |
|
Return on Equity (RoE) adjusted in % |
10.4 |
15.8 |
-5.4%pts |
12.9 |
17.7 |
-4.8%pts |
|
*in millions of € |
||||||
|
**Year-end figure |
||||||
Outlook
With regional differences, the overall growth momentum of the world economy is likely to remain rather subdued for the rest of the year. The above-average inflation in many places and persistently restrictive monetary policy of key central banks is likely to continue to weigh on growth. Global gross domestic product is expected to increase by only around 2.5% in 2023. Geopolitical imponderables remain another major factor of uncertainty. By contrast, energy prices are expected to remain at a significantly lower level on average in 2023 than in the previous year.
Mercedes-Benz Cars: The rate of sales from the first three quarters in 2023 is seen remaining at approximately the same pace. Full-year sales are thus expected at the prior-year level. As the 48-volt supply constraint is expected to continue, we expect Q4 sales to remain at the same level as Q3. The adjusted RoS is still seen at 12% – 14% for the full year. Due to intensified pricing competition particularly in the BEV segment, and given the 48-volt supply issues, it is expected to be in the lower half of this range. Inflation-related supplier costs are seen sitting at a higher level than at the beginning of the year. The adjusted Cash Conversion Rate is seen at 0.8 – 1.0. Investments in property, plants and equipment and into research and development are seen significantly above the prior-year level.
At Mercedes-Benz Vans, unit sales are expected to remain significantly above the prior-year level. In addition, some higher ramp-up related project expenses are seen in the final quarter. The adjusted RoS is expected in the range of 13% – 15% and is seen at the upper end of this range. The adjusted Cash Conversion Rate is expected at 0.7 – 0.9. As part of the technology and product offensive, investments in property, plants and equipment and into research and development are still seen significantly above the prior-year level.
The adjusted RoE at Mercedes-Benz Mobility for the full year is seen at the lower end of the 12% - 14% range and is expected to remain at a similar level in Q4 as it was in Q3. The effects of the deteriorating interest margin are expected to have reached their low point in Q4. Operating expenses are expected for the rollout of the Mercedes-Benz own-branded high power charging network. Without the increased operating expenses for charging, full-year adjusted RoE would be expected in the middle of the range.
The Mercedes-Benz Group expects revenue at the prior-year level. Group EBIT continues to be seen at prior-year level. Free Cash Flow of the industrial business continues to be expected slightly above the prior-year level.
Link to press information “Sales figures Q3 2023”:
Mercedes-Benz Cars: group-media.mercedes-benz.com/Sales-Q3/cars
Mercedes-Benz Vans: group-media.mercedes-benz.com/Sales-Q3/vans
Link to capital market presentation Q3 2023: group.mercedes-benz.com/q3-2023/en
[1] In real driving conditions, deviations from the certified standard values may occur. The real values are influenced by a variety of individual factors, e.g. individual driving style, environmental and route conditions.
Further information on Mercedes-Benz Group AG is available at: group-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 decline of demand 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; a shift in consumer preferences towards smaller, lower-margin vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilize our production capacities; price increases for fuel, raw materials or energy; disruption of production due to shortages of materials or energy, labour strikes or supplier insolvencies; 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; changes in laws, regulations and government policies, particularly those relating to vehicle emissions, fuel economy and safety; 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 this 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.
Mercedes-Benz Group at a glance
Mercedes-Benz Group AG is one of the world's most successful automotive companies. With Mercedes-Benz AG, the Group is one of the leading global suppliers of high-end passenger cars and premium vans. Mercedes-Benz Mobility AG offers financing, leasing, car subscription and car rental, fleet management, digital services for charging and payment, insurance brokerage, as well as innovative mobility services. The company founders, Gottlieb Daimler and Carl Benz, made history by inventing the automobile in 1886. As a pioneer of automotive engineering, Mercedes-Benz sees shaping the future of mobility in a safe and sustainable way as both a motivation and obligation. The company's focus therefore remains on innovative and green technologies as well as on safe and superior vehicles that both captivate and inspire. Mercedes-Benz continues to invest systematically in the development of efficient powertrains and sets the course for an all-electric future: The brand with the three-pointed star pursues the goal to go all-electric by 2030, where market conditions allow. Shifting from electric-first to electric-only, the world’s pre-eminent car company is accelerating toward a fully electric and software-driven future. The company's efforts are also focused on the intelligent connectivity of its vehicles, autonomous driving and new mobility concepts as Mercedes-Benz regards it as its aspiration and obligation to live up to its responsibility to society and the environment. Mercedes-Benz sells its vehicles and services in nearly every country of the world and has production facilities in Europe, North and Latin America, Asia and Africa. In addition to Mercedes-Benz, the world's most valuable luxury automotive brand (source: Interbrand study, 03 Nov. 2022), Mercedes-AMG, Mercedes-Maybach, Mercedes-EQ and Mercedes me as well as the brands of Mercedes-Benz Mobility: Mercedes-Benz Bank, Mercedes-Benz Financial Services and Athlon. The company is listed on the Frankfurt and Stuttgart stock exchanges (ticker symbol MBG). In 2022, the Group had a workforce of around 170,000 and sold around 2.5 million vehicles. Group revenues amounted to €150.0 billion and Group EBIT to €20.5 billion.
Contacts
Tobias Just, +49 711 17 41341, tobias.just@mercedes-benz.com
Willem Spelten, +49 151 58624395, willem.spelten@mercedes-benz.com
Edward Taylor, +49 176 30 94 1776, edward.taylor@mercedes-benz.com
Andrea Berg, +1 917 667 2391, andrea.a.berg@mercedes-benz.com
