Mercedes-Benz Group Reports Strong Start To 2023

Republished By Plato

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Even if just chalked up to rising sales of battery-electric vehicles, the Mercedes-Benz Group’s overall return on sales in the first quart beat analysts’ expectations by more than as full point as the German luxury car builder released preliminary financial figures.

Mercedes-Benz Group AG – Annual Results Conference 2021, StuttgartMercedes-Benz Group AG – Annual Results Conference 2021, Stuttgart — Harald Wilhelm, left, Mercedes-Benz Group CFO, said the current sales environment was challenging.

Mercedes-Benz Group reported strong financial results in the first quarter 2023, according to the report, as the company’s industrial free cash flow also exceeded expectations despite a sluggish global economy.

Company runs strong despite headwinds

“In a challenging market environment, we have once again demonstrated resilience. Strong pricing significantly outweighed headwinds from material costs and led to another quarter of solid financial results at Mercedes-Benz,” said Harald Wilhelm, chief financial officer of Mercedes-Benz Group AG.

Mercedes-Benz Cars delivered an adjusted return on sales of 14.8%, due to healthy net pricing, better-than-expected sales and a good product mix — and despite negative effects from higher material costs and increased research-and-development expenses. The consensus among analysts had pegged Mercedes-Benz Cars adjusted return on sales at 13.4%.

2023 Mercedes-Benz EQ 450 - mountains — The company said 10% of its sales were electric vehicles during the first quarter of 2023.

The improvement in the company’s return on sales came even as key rivals, such as Tesla, trimmed the price of EVs in key markets in Europe, North America and China.

Battery-electric vehicles accounted for 10% of Mercedes-Benz sales worldwide during the first three months of 2023 as the company pushes ahead with plans to add more EVs to its product portfolio.

EVs account for larger share of sales

The German luxury carmakers reported its EV sales increased by 89% during the first quarter as the company’s change over to battery-electric vehicles gained momentum. Mercedes’ battery electric vehicle (BEV) sales almost doubled to 51,600 units, according to the company’s quarterly sales report.

2023 Mercedes Sprinter AWD off-road — The adjusted return on sales of the Mercedes-Benz Vans division also rose to 15.6%.

Mercedes-Benz sales of BEVs surged by 327% in the United States and 41% in Europe, Mercedes said.

The adjusted return on sales of the Mercedes-Benz Vans division also rose to 15.6% due to substantially improved net pricing and higher unit sales, beating the consensus return on sales among analysts of 13.1%.

Mercedes Benz Group EBIT increased to $5 billion in the first quarter mainly resulting from the higher EBIT of the Mercedes-Benz Vans division, beating the consensus estimate of $4.5 billion.

The strong profitability of the automotive divisions translated into an industrial free cash flow of $2 billion significantly exceeding market expectations.

Mercedes-Benz previously said its goal to go all-electric by 2030, where market conditions allow. Shifting from electric-first to electric-only, Mercedes also is accelerating toward a fully electric and software-driven future, officials said, while remaining a top luxury car maker.