Mercedes-Benz Cars Reports Q1 adjusted Return on Sales (RoS) of 9.0% compared to Q1 2023 of 14.8%
Mercedes-Benz Group AG (ticker symbol: MBG) reported Free Cash Flow from the industrial business at a solid €2.23 billion (Q1 2023: €2.16 billion) in the first quarter with strong cash conversion including positive working capital developments. Group Earnings Before Interest and Taxes (EBIT) totalled €3.9 billion (Q1 2023: €5.5 billion), reflecting lower raw material prices, tight cost control and a strong performance at Mercedes-Benz Vans. These effects partially offset lower sales at Mercedes-Benz Cars where supplier bottlenecks and model changeovers in the Top-End segment also led to a less favourable model mix. Group revenue came in at €35.9 billion (Q1 2023: €37.5 billion).
“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.”
Harald Wilhelm, Chief Financial Officer of Mercedes-Benz Group AG
| Mercedes-Benz Group | 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% |
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. Mercedes-Benz Cars sales reached 463,000 units (-8%) in the first quarter, with solid results in all regions except Asia. Despite a decline in S-Class sales, it remains the undisputed leader in all key regions.
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.
| Mercedes-Benz Cars | 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 | – |
Mercedes-Benz Vans posted a strong start into the year with healthy net pricing supported by strong product substance leading to very good financial results. The adjusted Return on Sales for Mercedes-Benz Vans rose to 16.3% (Q1 2023: 15.6%) thanks to increased global sales (+7%) driven by positive product structure, especially from commercial Vans (+11%). Regionally, the important markets China (+27%) and the United States (+15%) contributed to the strong Q1 sales. Revenue increased by 6% to €4.9 billion (Q1 2023: €4.6 billion) in the first quarter and the Earnings Before Interest and Taxes increased by 22% to €933 million (Q1 2023: €762 million). BEV sales declined but are expected to rise with the full availability of the newly launched facelifts of the EQV, eVito and the new eSprinter.
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