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Mercedes-Benz posts robust Q3 profit in a demanding environment

Mercedes-Benz passenger car BEV sales more than doubled; eight battery electric vehicles now on sale with EQE SUV introduced and EQS SUV & EQE in production

Mercedes-Benz Group AG (ticker symbol: MBG) delivered solid financial results in the third quarter of 2022 as robust demand and healthy pricing for cars and vans, as well as cost discipline, helped to lift Earnings Before Interest and Taxes (EBIT) by 83% to €5.2 billion (Q3 2021: €2.8 billion). Group revenue increased by 19% to €37.7 billion (Q3 2021: €31.6 billion). The adjusted Return on Sales at Mercedes-Benz Cars reached 14.5% and 12.7% at Mercedes-Benz Vans.

Mercedes-Benz saw robust demand especially for its Top-End and electric vehicles as customer orders exceed the constrained supply in large part due to the ongoing semiconductor shortages and bottlenecks in logistics. As the transformation towards an all-electric future continues, Mercedes-Benz Passenger Car BEV sales more than doubled in the first nine months of the year (+156%) and increased by 183% in the third quarter.

”Mercedes-Benz once again delivered solid results thanks to the robust demand for our desirable products. In combination with our ongoing financial discipline, we are making the company more resilient and setting the pace for the months ahead, as we continue accelerating our transformation,”said Harald Wilhelm,Chief Financial Officer of Mercedes-Benz Group AG.

As energy supply uncertainties in Europe and the ongoing COVID challenges in Asia continue to impact consumer sentiment, the company remains vigilant and is preparing to safeguard supply chains and to maximise the potential for reducing or substituting the use of natural gas in vehicle production. Mercedes-Benz continues to see a gas reduction potential of around 50% in Germany if regional pooling is possible. As part of the company’s strategic goal of switching from gas to renewable electricity and other energy sources, Mercedes-Benz unveiled plans to build a wind farm at its test track in Papenburg, northern Germany, with an output of over 100 MW – more than 15% of Mercedes-Benz Group AG’s electricity needs in Germany from the middle of the decade.

Mercedes-Benz Group* Q3 2022 Q3 2021 Change 22/21 Q1-Q3 2022 Q1-Q3  2021 Change 22/21
Revenue** 37,716 31,647 +19% 109,014 98,653 +11%
EBIT** 5,196 2,838 +83% 15,047 11,913 +26%
EBIT adjusted** 5,344 3,109 +72% 15,584 12,114 +29%
Net profit/loss** 3,998 1,964 +104% 10,782 8,573 +26%
Free cash flow (industrial business)** 3,016 3,001 +0% 5,649 6,459 -13%
Free cash flow (industrial business) adjusted** 3,309 3,522 -6% 6,588 8,510 -23%
Earnings per share (EPS) in EUR 3.66 1.74 +110% 9.83 7.76 +27%
*  from continuing operations

** in millions of €

Investments, free cash flow, liquidity

The Free Cash Flow of the industrial business amounted to €3.0 billion (Q3 2021: €3.0 billion), impacted by the build-up of inventories as a result of semiconductor bottlenecks, a model-related production ramp-up and logistical bottlenecks. Inventories rose compared to historically low levels last year. The adjusted free cash flow of the industrial business was €3.3 billion (Q3 2021: €3.5 billion). The net liquidity of the industrial business as of September 30 amounted to €23.3 billion (end of 2021: €21.0 billion). The Group’s investments into property, plant & equipment amounted to €0.8 billion in the third quarter of 2022 (Q3 2021: €1.1 billion). Mercedes-Benz Cars invested €0.7 billion in property, plant & equipment (Q3 2021: €0.8 billion) and Mercedes-Benz Vans invested €0.1 billion (Q3 2021: €0.1 billion). At Group level, research and development expenditure in the third quarter amounted to €2.3 billion (Q3 2021: €2.2 billion).

Divisional results

Mercedes-Benz Cars

Mercedes-Benz Cars sales amounted to 530,400 vehicles in the third quarter (Q3 2021: 383,500). Revenue increased by 26% due to strong model mix and pricing, improving the adjusted EBIT by 106%. The adjusted Return on Sales rose to 14.5%.
Sales in the Top-End Luxury segment made up 15% of overall sales in the third quarter, slightly above the prior-year’s level of 78,800 units (+5%). S-Class sales in Q3 were up in all regions except the U.S., where a temporary internal model year certification delay held up deliveries. At AMG, a sales increase (14.5%) was achieved despite a model changeover for the C-Class variant. Sales of Core Luxury vehicles rose by 100,000 units to 293,300 vehicles (Q3 2021: 193,300). The Core Luxury segment includes the EQE, the C-Class and E-Class, as well as the best-selling GLC, which saw a successor vehicle launched in the third quarter with enhanced product substance. The EQE saw 6,000 sales during the quarter, matching the EQS. Electric vehicles had healthy margin quality, including for the EQA and EQB models.

Mercedes-Benz Cars Q3 2022 Q3 2021 Change 22/21 Q1-Q3 2022 Q1-Q3  2021 Change 22/21
Sales in units 530,414 383,450 +38% 1,504,538 1,443,509 +4%
thereof xEV 84,850 60,959 +39% 222,444 182,686 +22%
thereof BEV 37,069 18,784 +97% 95,688 57,895 +65%
Revenue* 28,209 22,434 +26% 81,044 71,332 +14%
EBIT* 4,034 1,838 +119% 12,097 8,649 +40%
EBIT adjusted* 4,081 1,985 +106% 12,157 8,701 +40%
Return on Sales (RoS) in % 14.3 8.2 +6.1%pts 14.9 12.1 +2.8%pts
Return on Sales (RoS) adjusted in % 14.5 8.8 +5.7%pts 15.0 12.2 +2.8%pts
Cash Flow Before Interest and Taxes (CFBIT)* 3,374 3,253 +4% 7,614 7,811 -3%
Cash Flow Before Interest and Taxes (CFBIT) adjusted* 3,552 3,626 -2% 8,180 9,068 -10%
Cash Conversion Rate adjusted 0.9 1.8 0.7 1.0
*in millions of €

Mercedes-Benz Vans

At Mercedes-Benz Vans, third-quarter unit sales reached 104,000 vehicles worldwide (Q3 2021: 88,000) despite semi-conductor shortages. Adjusted EBIT reached €0.5 billion (Q3 2021: €0.2 billion) thanks to continuing strong margin with healthy model mix and net pricing. In the first nine months of the year, Mercedes-Benz Vans increased sales of electric vans by one third compared to the year-earlier period.

Mercedes-Benz Vans Q3 2022 Q3 2021 Change 22/21 Q1-Q3 2022 Q1-Q3  2021 Change 22/21
Sales in units 103,978 87,954 +18% 292,611 274,740 +7%
Revenue* 4,309 3,546 +22% 12,103 10,613 +14%
EBIT* 497 165 +201% 1,227 887 +38%
EBIT adjusted* 546 189 +189% 1,426 935 +53%
Return on Sales (RoS) in % 11.5 4.7 +6.8%pts 10.1 8.4 +1.7%pts
Return on Sales (RoS) adjusted in % 12.7 5.3 +7.4%pts 11.8 8.8 +3.0%pts
Cash Flow Before Interest and Taxes (CFBIT)* 434 402 +8% 1,066 307 +247%
Cash Flow Before Interest and Taxes (CFBIT) adjusted* 529 504 +5% 1,299 989 +31%
Cash Conversion Rate adjusted 1.0 2.7 0.9 1.1
*in millions of €

Mercedes-Benz Mobility

In the third quarter of 2022, Mercedes-Benz Mobility reached an adjusted Return on Equity (RoE) of 15.8%. The new business of Mercedes-Benz Mobility declined slightly by 3% to €14.3 billion compared to the prior-year’s quarter. However, the prior-year figure still included the new business from Daimler Trucks & Buses until the spin-off of the Daimler commercial vehicle business. At the end of September 2022, contract volume amounted to €135.7 billion and was thus at the same level as at the end of 2021. Adjusted EBIT decreased to €0.6 billion compared to the prior-year’s quarter, driven by increased credit risk reserves because of a weaker macroeconomic outlook and due to headwinds in the form of increasing interest rates and the lower volume.

Mercedes-Benz Mobility Q3 2022 Q3 2021 Change 22/21 Q1-Q3 2022 Q1-Q3  2021 Change 22/21
Revenue* 6,599 6,855 -4% 20,096 20,695 -3%
New business* 14,255 14,633 -3% 42,910 48,588 -12%
Contract volume (September, 30)* 135,731 148,091 -8% 135,731 133,687** +2%
EBIT* 577 943 -39% 1,934 2,611 -26%
EBIT adjusted* 577 943 -39% 1,934 2,564 -25%
Return on Equity (RoE) in % 15.8 23.3 -7.5%pts 17.7 22.5 -4.8%pts
Return on Equity (RoE) adjusted in % 15.8 23.3 -7.5%pts 17.7 22.1 -4.4%pts
*in millions of €

** Year-end figure 2021


The macroeconomic and geopolitical conditions continue to be characterized by an exceptional degree of uncertainty, including the war in Ukraine, its effects on supply chains and on the availability and the development of prices for energy and raw materials. Further effects due to the rapidly changing situation in Russia and Ukraine are not currently known and have not yet been taken into account in our key figures. An escalation beyond its current state could possibly have substantial negative consequences for Mercedes-Benz business activities.

In addition, the continued very high inflationary pressure for consumers and companies and the associated central bank increases in interest rates as well as ongoing bottlenecks in global supply chains make the outlook more difficult. Not least the further course of the pandemic, in particular in China, holds uncertainties for the expected development of the market.

Mercedes-Benz Cars

Mercedes-Benz Cars continues to expect sales slightly above last year and for demand to outstrip supply. Sales in the fourth quarter are seen above sales in Q4 last year. Mercedes-Benz Cars now expects the adjusted RoS for the full year to be in the range of 13%-15%, rather than 12%-14% seen earlier. The cash conversion rate for Mercedes-Benz Cars remains unchanged at between 0.8 to 1.0. Investments in property, plant & equipment and research and development remain unchanged at “significantly above” the prior-year level.

Mercedes-Benz Vans

Mercedes-Benz Vans expects sales to remain slightly above 2021 levels. The adjusted RoS at Mercedes-Benz Vans is now expected to be at 9% – 11%, rather than 8% – 10% previously. The cash conversion rate for Mercedes-Benz Vans has been adjusted to 0.8 to 1.0, from 0.6 to 0.8 previously. Investments in property, plant & equipment and research and development remain unchanged at “significantly above” the prior-year level.

Mercedes-Benz Mobility

The adjusted Return on Equity at Mercedes-Benz Mobility is still seen in the range of 16% to 18%.

Mercedes-Benz Group

Revenue continues to be expected at “significantly above” 2021 levels. Group EBIT is now seen “significantly above” the prior year, rather than “slightly above.” Free Cash Flow from the industrial business remains at “prior-year level.”

SOURCE: Mercedes-Benz Group

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