Mercedes-Benz Q1 Revenue Rises as Pricing Energy and Resilience Offset Headwinds

STUTTGART, Germany–(BUSINESS WIRE)–Mercedes-Benz Group AG (ticker image: MBG) achieved robust monetary leads to the primary quarter of 2022, boosted by pricing energy, the sharpened deal with top-end automobiles and premium vans, mixed with ongoing value self-discipline. These measures helped to elevate the adjusted Return on Gross sales at Mercedes-Benz Vehicles to 16.4% and to 12.6% for Mercedes-Benz Vans even because the COVID-19 pandemic, semiconductor supply-chain bottlenecks and conflict in Ukraine continued to affect enterprise.

”On this difficult atmosphere resilience and pricing energy are essential. Our sharpened deal with fascinating top-end and electrical automobiles, mixed with ongoing value self-discipline, allowed us to ship robust earnings regardless of quite a few headwinds,” mentioned Harald Wilhelm, Chief Monetary Officer of Mercedes-Benz Group AG. “On this basis we proceed to remodel our enterprise by rising the luxurious enterprise, scaling up manufacturing of electrical automobiles and accelerating software program improvement.”

Group EBIT rose 11% to €5.2 billion (Q1 2021: €4.7 billion). Earnings had been impacted by a constructive €918 million acquire from the sale of Canadian personal retail operations and the partial sale of MB Grand Prix, almost offsetting €709 million in bills tied to changes of business enterprise actions in Russia and €281 million in bills associated to diesel automobiles.

Within the wake of Russia’s assault on Ukraine, Mercedes-Benz suspended the export of passenger automobiles, vans and spare components to Russia and halted native manufacturing. Moreover, the corporate is in shut contact with suppliers which have publicity to Ukraine with a view to safeguarding provide chains. This contains amongst different issues, transferring manufacturing to different places throughout the provider community. Mercedes-Benz has tailored shift plans at some vegetation and making the most of its versatile manufacturing system to keep away from downtime and keep manufacturing.

Mercedes-Benz reasserted its declare to management within the electrical period. In April, the Mercedes-Benz Imaginative and prescient EQXX demonstrated world-beating effectivity by driving greater than 1,000 kilometres on a single cost below real-world circumstances. The EQS SUV was offered and the EQE was launched out there. That’s after Mercedes-Benz opened a brand new battery plant in the US within the first quarter, as a part of a broader push to ramp up world manufacturing of electrical automobiles this yr.

Mercedes-Benz Group*

Q1-2022

Q1-2021

Change

22/21

Income**

34,858

32,882

+6%

EBIT**

5,229

4,701

+11%

EBIT adjusted**

5,301

4,444

+19%

Internet revenue/loss**

3,586

3,470

+3%

Internet liquidity (industrial enterprise, March, 31)**

22,706

Free money movement (industrial enterprise)**

1,216

1,297

-6%

Free money movement (industrial enterprise) adjusted**

1,210

2,505

-52%

Earnings per share (EPS) in EUR

3.26

3.18

+3%

* from persevering with operations

**in tens of millions of €

Investments, free money movement and liquidity

The free money movement of the economic enterprise within the first quarter amounted to €1,216 million (Q1 2021: €1,297 million). The adjusted free money movement of the economic enterprise was €1,210 million (Q1 2021: €2,505 million). The web liquidity of the economic enterprise amounted to €22,706 million (finish of 2021: €21,005 million). The Group’s investments in property, plant and tools within the first quarter totalled €855 million (Q1 2021: €1,186 million). Of this quantity €0.8 billion (Q1 2021 €1.1 billion) was attributable to Mercedes-Benz Vehicles and €18 million to Mercedes-Benz Vans (Q1 2021: €29 million). Analysis & improvement expenditure amounted to €1,979 million (Q1 2021: €2,414 million) together with essential upfront investments in future merchandise. At €1.9 billion (Q1 2021: €1.9 billion), Mercedes-Benz Vehicles accounted for a majority of the analysis and improvement expenditure. In the course of the reporting interval, Mercedes-Benz Vans had analysis and improvement expenditure of €84 million (Q1 2021 €119 million.)

Divisional outcomes

Regardless of robust demand, gross sales on the Mercedes-Benz Vehicles decreased by 10% to 487,008 automobiles (Q1 2021: 538,869) primarily on account of semiconductor provide bottlenecks, COVID-19 lockdowns in addition to the conflict in Ukraine. Nonetheless, income rose 8% highlighting the pricing energy and skill to enhance product combine even in risky markets. Deliveries of top-end automobiles, which embrace Mercedes-Maybach, Mercedes-AMG, G-Class, S-Class, GLS and EQS, rose 5% to 78,000 automobiles throughout the identical interval. Prime-end automobiles now account for 16% of total quantity. Gross sales of Mercedes-Benz Vehicles hybrid and electrical fashions rose 19% throughout the quarter to 74,000 automobiles.

This resulted in a 21% rise in adjusted EBIT to €4,243 million and an adjusted Return on Gross sales of 16.4%. The adjusted CFBIT decreased to €1.7 billion on account of working capital results triggered primarily by semiconductor provide constraints in addition to logistics points associated to Ukraine/Russia and China.

Mercedes-Benz Vehicles

Q1-2022

Q1-2021

Change 22/21

Gross sales in items

487,008

538,869

-10%

Income*

25,836

23,924

+8%

EBIT*

4,271

3,790

+13%

EBIT adjusted*

4,243

3,515

+21%

Return on Gross sales (RoS) in %

16.5

15.8

+0.7percentpts

Return on Gross sales (RoS) adjusted in %

16.4

14.7

+1.7percentpts

Money Stream Earlier than Curiosity and Tax (CFBIT)*

1,847

2,268

-19%

Money Stream Earlier than Curiosity and Tax (CFBIT) adjusted*

1,680

2,947

-43%

Money Conversion Price adjusted

0.4

0.8

*in tens of millions of €

 

 

 

At Mercedes-Benz Vans, unit gross sales remained on the prior-year stage, regardless of semiconductor shortages as gross sales of Mercedes-Benz Vans (Sprinter and Metris) reached a brand new excessive within the first quarter in North America. The adjusted Return on Gross sales (RoS) for Mercedes-Benz Vans rose to 12.6% from 9.7% within the year-earlier interval, reflecting wholesome combine and pricing. The T-Class world premiere adopted the introduction of the brand new Citan, which is being properly obtained due to robust market demand.

Mercedes-Benz Vans

Q1-2022

Q1-2021

Change 22/21

Gross sales in items

88,508

88,418

+0%

Income*

3,687

3,398

+9%

EBIT*

348

290

+20%

EBIT adjusted*

466

328

+42%

Return on Gross sales (RoS) in %

9.4

8.5

+0.9percentpts

Return on Gross sales (RoS) adjusted in %

12.6

9.7

+2.9percentpts

Money Stream Earlier than Curiosity and Tax (CFBIT)*

378

-296

Money Stream Earlier than Curiosity and Tax (CFBIT) adjusted*

437

186

+135%

Money Conversion Price adjusted

0.9

0.6

*in tens of millions of €

 

 

 

At Mercedes-Benz Mobility, new enterprise quantity decreased because of the vehicles spin-off, provide bottlenecks and decrease penetration charges primarily in North America. New enterprise in Russia was suspended and credit score reserves for the Russian portfolio had been raised. Exterior of Russia the portfolio high quality stays robust. Mobility companies and fleet enterprise efficiency and margins improved, benefiting from decrease refinancing prices in contrast with the year-earlier interval. Adjusted EBIT elevated barely with a Return on Fairness of 20.2%.

Mercedes-Benz Mobility

Q1-2022

Q1-2021

Change 22/21

Income*

6,782

6,966

-3%

New enterprise*

14,540

16,764

-13%

Contract quantity (March, 31)*

134,404

152,685

-12%

EBIT*

733

744

-1%

EBIT adjusted*

733

691

+6%

Return on Fairness (RoE) in %

20.2

20.2

Return on Fairness (RoE) adjusted in %

20.2

18.7

+1.5pts%

*in tens of millions of €

 

 

 

Outlook

The geopolitical and macroeconomic circumstances proceed to be characterised by an distinctive diploma of uncertainty, together with the conflict in Ukraine, its impacts on provide chains, and the event of costs for uncooked supplies and power. Additional results because of the quickly altering state of affairs in Russia and Ukraine are usually not presently identified however might presumably have substantial unfavorable penalties for our enterprise actions, ought to it escalate past its present state.

Mercedes-Benz expects provide constraints associated to semiconductors and different industrial upstream merchandise and the COVID-19 pandemic to affect enterprise for the rest of 2022 and continues to watch provide chain dangers intently to react flexibly if wanted. Strict COVID-19 countermeasures in China maintain uncertainties for the anticipated improvement of the market, provide chain and manufacturing.

Mercedes-Benz Vehicles

Mercedes-Benz Vehicles continues to count on a slight gross sales improve and an adjusted Return on Gross sales between 11.5% and 13% with full-year RoS seen on the increased finish of this vary. Worth and blend are anticipated to stay on a excessive stage, with top-end car gross sales development seen at greater than 10% year-on-year. Uncooked materials and different inflationary dangers are seen for the rest of the yr. The goal is to proceed to compensate such dangers by web pricing. Analysis and improvement spending is anticipated to stay unchanged at barely above the prior-year stage, primarily because of the improvement of the MMA and AMG.EA platforms. Investments in property vegetation & tools are actually anticipated to be on the prior-year stage, relatively than barely above the prior-year stage.

Mercedes-Benz Vans

Gross sales are anticipated to rise barely above the 2021 stage and the adjusted Return on Gross sales is anticipated to stay at 8% to 10% and is anticipated on the higher half of this hall. Investments in property vegetation and tools and analysis and improvement is anticipated to stay considerably above prior-year ranges on account of spending to improve present combustion engine platforms and to develop the electrical VAN.EA platform.

Mercedes-Benz Mobility

The adjusted Return on Fairness is seen within the vary of 16% to 18%. Margin headwinds are anticipated on account of increased refinancing prices and contract volumes are seen decrease. Moreover, the price of credit score dangers is anticipated to normalize.

Mercedes-Benz Group

Income is seen barely above 2021 whereas EBIT is seen on the prior-year stage. Free money movement from the economic enterprise is anticipated to stay at barely beneath the 2021 reference.

Hyperlink to press data “Gross sales figures Q1 2022”:

Mercedes-Benz Vehicles: group-media.mercedes-benz.com/Sales-Q1/cars

Mercedes-Benz Vans: group-media.mercedes-benz.com/Sales-Q1/vans

Hyperlink to capital market presentation Q1 2022: group.mercedes-benz.com/q1-2022

Ahead-looking statements:

This doc incorporates forward-looking statements that mirror our present views about future occasions. The phrases “anticipate,” “assume,” “consider,” “estimate,” “count on,” “intend,” “might,” ”can,” “might,” “plan,” “challenge,” “ought to” and comparable expressions are used to establish forward-looking statements. These statements are topic to many dangers and uncertainties, together with an opposed improvement of world financial circumstances, specifically a decline of demand in our most essential markets; a deterioration of our refinancing potentialities on the credit score and monetary markets; occasions of pressure majeure together with pure disasters, pandemics, acts of terrorism, political unrest, armed conflicts, industrial accidents and their results on our gross sales, buying, manufacturing or monetary companies actions; modifications in forex alternate charges, customs and overseas commerce provisions; a shift in client preferences in direction of smaller, lower-margin automobiles; a doable lack of acceptance of our services or products which limits our means to realize costs and adequately make the most of our manufacturing capacities; worth will increase for gasoline or uncooked supplies; disruption of manufacturing on account of shortages of supplies, labour strikes or provider insolvencies; a decline in resale costs of used automobiles; the efficient implementation of cost-reduction and efficiency-optimization measures; the enterprise outlook for corporations wherein we maintain a major fairness curiosity; the profitable implementation of strategic cooperations and joint ventures; modifications in legal guidelines, laws and authorities insurance policies, significantly these referring to car emissions, gasoline economic system and security; the decision of pending governmental investigations or of investigations requested by governments and the result of pending or threatened future authorized proceedings; and different dangers and uncertainties, a few of that are described below the heading “Danger and Alternative Report” within the present Annual Report or within the present Interim Report. If any of those dangers and uncertainties materializes or if the assumptions underlying any of our forward-looking statements show to be incorrect, the precise outcomes could also be materially completely different from these we categorical or indicate by such statements. We don’t intend or assume any obligation to replace these forward-looking statements since they’re based mostly solely on the circumstances on the date of publication.

Mercedes-Benz Group at a look

Mercedes-Benz Group AG is among the world’s most profitable automotive corporations. With Mercedes-Benz AG, the Group is among the main world suppliers of premium and luxurious automobiles and vans. Mercedes-Benz Mobility AG affords financing, leasing, automotive subscription and automotive rental, fleet administration, digital companies for charging and fee, insurance coverage brokerage, in addition to modern mobility companies. The corporate founders, Gottlieb Daimler and Carl Benz, made historical past by inventing the car in 1886. As a pioneer of automotive engineering, Mercedes-Benz sees shaping the way forward for mobility in a protected and sustainable approach as each a motivation and obligation. The corporate’s focus subsequently stays on modern and inexperienced applied sciences in addition to on protected and superior automobiles that each captivate and encourage. Mercedes-Benz continues to speculate systematically within the improvement of environment friendly powertrains and units the course for an all-electric future: The model with the three-pointed star pursues the aim to go all-electric, the place market circumstances permit. Shifting from electric-first to electric-only, the world’s pre-eminent luxurious automotive firm is accelerating towards an emissions-free and software-driven future. The corporate’s efforts are additionally centered on the clever connectivity of its automobiles, autonomous driving and new mobility ideas as Mercedes-Benz regards it as its aspiration and obligation to stay as much as its duty to society and the atmosphere. Mercedes-Benz sells its automobiles and companies in almost each nation of the world and has manufacturing amenities in Europe, North and Latin America, Asia and Africa. Along with Mercedes-Benz, the world’s most beneficial luxurious automotive model (supply: Interbrand research, 20 Oct. 2021), Mercedes-AMG, Mercedes-Maybach, Mercedes-EQ and Mercedes me in addition to the manufacturers of Mercedes-Benz Mobility: Mercedes-Benz Financial institution, Mercedes-Benz Monetary Companies and Athlon. The corporate is listed on the Frankfurt and Stuttgart inventory exchanges (ticker image MBG). In 2021, the Group had a workforce of round 172,000 and bought 2.3 million automobiles. Group revenues amounted to €168.0 billion and Group EBIT to €29.1 billion.