Mercedes-Benz Australia/Pacific Pty Ltd
ABN 23 004 411 410
ANNUAL FINANCIAL REPORT
31 DECEMBER 2025
Mercedes-Benz Australia/Pacific Pty Ltd
Year ended 31 December 2025
Contents
Page
Directors' Report
1 - 3
Independent Audit Report
4 - 7
Lead Auditor's Independence Declaration
8
Directors' Declaration
9
Statement of Financial Position
10
Statement of Profit or Loss & Other Comprehensive Income
11
Statement of Changes in Equity
12
Statement of Cash Flows
13
Notes to the Financial Statements
14 - 63
Mercedes-Benz Australia/Pacific Pty Ltd
Directors' Report
31 December 2025
The directors present their report together with the financial report of Mercedes-Benz Australia/Pacific Pty Ltd ("the Company")
for the year ended 31 December 2025 and the auditor's report thereon.
Directors
Mr. Homero Becerra CEO & Director since 1 November 2025
Mr. Jaime Cohen CEO & Director since 1 April 2024 - 9 September 2025
Mr. Stephan Schmid CFO & Director since 1 July 2024
Ms. Diane Tarr Director since 1 January 2019
Mr. Steven McHutchon Director since 1 January 2019
Officers who were previously partners of the audit firm
There were no officers of the Company during the financial year who were previously partners of the current audit firm, PwC, at
a time when PwC undertook an audit of the Company.
Principal activities
The principal activities of the Company during the course of the financial year were the importation, marketing and distribution of
passenger and light commercial vehicles and their component parts.
Significant changes in the nature of the Company’s activities during the year are noted below.
Operating and financial review
The Company delivered a profit, after income tax, for the year ended 31 December 2025 of $65.695 million (2024: $117.320
million). During the full year, the Company continued its focus on the Agency business model for the sale of its passenger cars
and light commercial vehicles, which contributed to 86% share of total passenger cars sold and 48% share of total light
commercial vehicles sold. Additionally, the income tax benefit reported by the Company for the 31 December 2024 year
includes prior year adjustments in relation to the 2015 and 2016 income years that resulted in an income tax refund of $53.625
million from the Australian Taxation Office. This income tax refund was received from the Australian Taxation Office in March
2025.
The Company sold 23,060 new & demonstrator passenger cars (2024: 20,929) & 4,524 new light commercial vehicles (2024:
4,935). The Company maintained a strong year to date relative market share of 35.1% (2024: 32.4%) and 10.9% (2024: 10.4%),
in their respective market segments.
The highest selling new passenger car product lines in 2025 were the GLA-Class selling 4,153 units, followed by the GLC-class
selling 4,041 units, followed by the GLE selling 3,159 units.
The highest selling new passenger car product lines in 2024 were the GLA-Class selling 4,097 units, followed by the GLC-class
selling 3,013 units, followed by the C-Class selling 2,460 units.
The highest selling new light commercial vehicle product lines in 2025 were the Sprinter selling 3,540 units (2024: 4,226 units)
and the Vito van selling 665 units (2024: 409 units).
Many factors could directly or indirectly affect the Company's business, financial position, financial performance and cash flows.
These factors include, but are not limited to, changes in economic and market conditions, climate change, interest rate risk,
credit risk and currency risk. The Company considers these factors and associated potential impacts on consumer behaviour
and supply chains when making future plans. Further to this, interruptions in global supply chains can delay vehicle shipment
arrivals causing bottlenecks in the automotive industry. This has had a direct impact on the production and stock levels of the
Company.
The systematically pursued digitisation strategy as well as the transition to the agency business model creates extensive
changes in the existing information technology landscape and brings risks to business processes. However, the level of
information technology risk is managed by the Company's internal framework for IT security which applies protective measures
based on industry standards and good practice.
1
Mercedes-Benz Australia/Pacific Pty Ltd
Directors' Report
31 December 2025
(continued)
Dividends - Mercedes-Benz Australia/Pacific Pty Ltd
Dividends totalling $117.320 million were declared and paid in December 2025 for the year ended 31 December 2024.
Cents per
Total amount
Franked/
Date of
share
$'000
unfranked
payment
Final 2024 ordinary dividend
$335.20
$117,320
Franked
10.12.2025
Significant changes in the state of affairs
In the opinion of the Directors there were no significant changes in the state of affairs of the Company that occurred during the
financial year under review.
Environmental regulation
The Company operates in an industry subject to environmental regulation under relevant Commonwealth and State legislation.
The Company forms part of a consolidated group whose parent entity has prepared climate-related financial disclosures in
accordance with Australian Accounting Standards. Climate-related risks and opportunities are assessed and managed at the
Group level and apply to the Company’s operations as relevant. The Directors are not aware of any material breaches of
environmental regulations during the reporting period
Events subsequent to reporting date
There has not arisen a transaction or event of an unusual nature likely to affect significantly the operations of the business, the
results of those operations or the state of affairs of the Company in future financial years from the end of the financial year to the
date of this report.
Likely developments
Operations
The Company will continue to pursue its policy of increasing its key market share as well as maintaining its contribution to the
Mercedes-Benz Group global organisation.
The Company’s financing activities for other related parties of the local Mercedes-Benz group are expected to continue
depending on the requirements of these related parties.
Indemnification and insurance of officers and auditors
Indemnification
The Company has agreed to indemnify all directors and officers of the Company against all liabilities to another person (other
than the Company or a related party) that may arise from their positions as directors or officers of the Company, except where
the liability arises out of conduct involving a liability owed to the Company or a Related Body Corporate, a liability for a
pecuniary penalty order under section 1317G, a compensation order under section 1317H of the Law, or a lack of good faith.
The agreement stipulates that the Company will meet the full amount of any such liabilities, including all costs and expenses as
permitted by law.
The Company has not indemnified or made any agreements to indemnify any person for a liability who is or has been an auditor
of the Company.
Insurance premiums
For the period 1 April 2025 to 1 April 2026, the Company has paid insurance premiums of $11,333 (2024: $11,086) in respect of
directors’ and officers’ liability and legal expenses insurance. This insurance was renewed in April 2025 to provide coverage
until 1 April 2026.
The insurance contracts insure against certain liability (subject to specific exclusions) persons who are or have been directors or
executive officers of the Company.
2
Mercedes-Benz Australia/Pacific Pty Ltd
Directors' Report
31 December 2025
(continued)
Lead auditor's independence declaration
The lead auditor’s independence declaration is set out on page 8 and forms part of the Directors’ report for the financial year
ended 31 December 2025.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191 and
in accordance with that, amounts in the financial report and directors’ report have been rounded off to the nearest thousand
dollars, unless otherwise stated.
Signed in accordance with a resolution of the directors:
Homero Becerra
CEO and Director
Stephan Schmid
CFO and Director
Diane Tarr
Director
6WHYHQꢀ0F+XWFKRQ
'LUHFWRU
3
Independent auditor’s report
To the members of Mercedes-Benz Australia/Pacific Pty Ltd
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Mercedes-Benz Australia/Pacific Pty Ltd (the Company) is in
accordance with the Corporations Act 2001, including:
a) giving a true and fair view of the Company’s financial position as at 31 December 2025 and of its
financial performance for the year then ended; and
a) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
x the statement of financial position as at 31 December 2025;
x the statement of profit or loss and other comprehensive income for the year then ended;
x the statement of changes in equity for the year then ended;
x the statement of cash flows for the year then ended;
x the notes to the financial statements, including material accounting policy information and other
explanatory information; and
x the directors' declaration.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006,
GPO Box 1331 MELBOURNE VIC 3001
T: +61 3 8603 1000, F: +61 3 8603 1999, www.pwc.com.au
pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Company in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the
Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion
on the financial report as a whole, taking into account the geographic and management structure of the
Company, its accounting processes and controls and the industry in which it operates.
Audit Scope
Our audit focused on where the Company made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
In establishing the overall approach to the group audit, we determined the type of work that needed to be
performed by us, as the group auditor, or component auditors from other PwC network firms operating
under our instruction. Where the work was performed by component auditors, we determined the level
of involvement we needed to have in the audit work at those components to be able to conclude whether
sufficient appropriate audit evidence had been obtained as a basis for our opinion on the Group financial
report as a whole.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report for the current period. The key audit matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit
procedure is made in that context. We communicated the key audit matter to the Board of Directors.
Key audit matter
How our audit addressed the key audit matter
Valuation of provision for warranty claims
We performed the following procedures, amongst others:
(Refer to note 21) $229.3m
x
Evaluated the Group’s valuation methodology against the
The Company grants product warranties which guarantee
requirements of Australian Accounting Standards.
the performance of a vehicle for a five-year period. When
a vehicle is sold, management recognises a provision for
x
Assessed the mathematical accuracy of key formulas in the
estimated future warranty costs.
valuation calculations.
The valuation of the provision for warranty claims is a key
x
Compared the key inputs and assumptions, including actual
audit matter due:
claims and expected future costs, in the calculation on a
sample basis to source data and other relevant evidence
x
The financial significance of the balance.
obtained throughout the course of the audit.
x
The judgement exercised by management in
x
Considered the reasonableness of associated disclosures
estimating the cost of future warranty claims. This
in the financial report in light of the requirements of the
estimate is based on experience of past actual claims
Australian Accounting Standards.
and expected future costs.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the Annual Financial Report for the year ended 31 December 2025, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon through our opinion on the financial report.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report in accordance
with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at: https://auasb.gov.au/media/bwvjcgre/ar1_2024.pdf. This
description forms part of our auditor’s report.
Report on compliance with relevant requirements set out in the Delegated
Regulation 2019/815 on European Single Electronic Format
Our opinion
We have checked the compliance of the accompanying financial statements of the Company as at 31 December
2025 with the relevant requirements set out in the Delegated Regulation 2019/815 on European Single Electronic
Format (“ESEF Regulation”) that are applicable to the accompanying financial statements of the Company.
For the Company, it relates to the requirement that:
· the accompanying financial statements are prepared in a valid XHTML format.
In our opinion, the accompanying financial statements of Mercedes-Benz Australia/Pacific Pty Ltd as at 31
December 2025, identified as MBAuP_ESEF-2025-12-31-0-en.xhtml, have been prepared, in all material respects,
in compliance with the requirements laid down in the ESEF Regulation.
Responsibilities of the directors
In addition to the responsibilities described above in the Responsibilities of the directors for the financial report
section to our Report on the audit of the financial report, the directors are responsible for presenting the Company
financial statements in compliance with the requirements set out in the ESEF Regulation.
Auditor’s responsibilities
In conjunction with our responsibilities described above in the Auditor’s responsibilities for the audit of the
financial report section to our Report on the audit of the financial report, our responsibility is to assess whether the
accompanying Company financial statements have been prepared, in all material respects, in compliance with the
requirements laid down in the ESEF Regulation.
PricewaterhouseCoopers
Brad Peake
Melbourne
Partner
21 April 2026
Auditor’s Independence Declaration
As lead auditor of Mercedes-Benz Australia/Pacific Pty Ltd's financial report for the year ended
31 December 2025, I declare that, to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation
to the audit of the financial report; and
b) no contraventions of any applicable code of professional conduct in relation to the audit of the
financial report.
Brad Peake
Melbourne
Partner
21 April 2026
PricewaterhouseCoopers
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006,
GPO Box 1331 MELBOURNE VIC 3001
T: +61 3 8603 1000, F: +61 3 8603 1999, www.pwc.com.au
pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Mercedes-Benz Australia/Pacific Pty Ltd
Directors' Declaration
31 December 2025
1.
The directors of the Company certify to the best of their knowledge that:
(a) the financial statements and notes set out on pages 10 to 63 are in accordance with the Corporations Act 2001
(Cth), including:
(i) giving a true and fair view of the Company’s financial position as at 31 December 2025 and of its
performance for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the Company directors' report (where necessary read together with the financial report and notes to the financial
statements which accompany the directors' report) provides a fair review of the development and performance of
the business and the position of the Company for the financial year ended 31 December 2025, together with a
description of the principal opportunities and risks associated with the expected development of the Company;
and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The directors draw attention to Note 2(a) to the financial statements, which includes a statement of compliance with International
Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Homero Becerra
CEO and Director
Stephan Schmid
CFO and Director
Diane Tarr
Director
6WHYHQꢀ0F+XWFKRQꢀꢀꢀꢀ
'LUHFWRUꢀꢀꢀꢀꢀ
9
Mercedes-Benz Australia/Pacific Pty Ltd
Statement of Financial Position
As at 31 December 2025
31 December
31 December
2025
2024
Notes
$'000
$'000
Current assets
Cash and cash equivalents
12
93,915
126,406
Trade and other receivables
13
1,035,483
611,912
Inventories
14
824,964
1,294,869
2,033,187
Total current assets
1,954,362
Non-current assets
Trade and other receivables
13
221,226
675,576
Deferred tax assets
16
130,899
139,097
Intangible assets
1
-
Property, plant and equipment
15
72,923
85,067
425,048
899,741
Total non-current assets
Total assets
2,379,410
2,932,928
Liabilities
Current liabilities
Trade and other liabilities
17
552,222
604,724
Loans and borrowings
18
594,043
600,878
Employee benefits
20
14,839
15,418
Provisions
21
111,526
101,006
1,114
Deferred income
22
1,355
Total current liabilities
1,273,985
1,323,140
Non-current liabilities
Trade and other liabilities
17
47,278
41,831
Loans and borrowings
18
199,606
650,434
Employee benefits
20
863
908
Provisions
21
131,100
138,345
1,158
1,225
Deferred income
22
Total non-current liabilities
380,005
832,743
Total liabilities
1,653,990
2,155,883
725,420
777,045
Net assets
Equity
Share capital
23
70,000
70,000
Retained earnings
655,420
707,045
725,420
777,045
Total equity
The notes on pages 14 to 63 are an integral part of these financial statements.
10
Mercedes-Benz Australia/Pacific Pty Ltd
Statement of Profit or Loss & Other Comprehensive Income
For the year ended 31 December 2025
2025
2024
Notes
$'000
$'000
Revenue
5
2,698,215
2,834,635
(2,309,218)
Cost of sales
8(a)
(2,421,790)
Gross Profit
412,845
388,997
Other income
6
15,853
25,108
Employee expenses
7
(54,146)
(53,044)
Amortisation
-
(24)
Depreciation expense
15
(6,959)
(7,657)
Other expenses
8(b)
(277,615)
(257,093)
95,185
Result from operating activities
91,080
Finance income
10
48,670
59,196
(67,979)
Finance costs
10
(51,320)
10
(2,650)
(8,783)
Net finance income / (cost)
Profit before income tax
88,430
86,402
Income Tax (Expense)/Benefit
(22,735)
30,918
Income tax (expense)/benefit
11
Profit for the period
65,695
117,320
Other comprehensive income/(loss)
-
Other comprehensive income/(loss) for the period, net of tax
-
117,320
Total comprehensive income/(loss) for the period
65,695
The notes on pages 14 to 63 are an integral part of these financial statements.
11
Mercedes-Benz Australia/Pacific Pty Ltd
Statement of Changes in Equity
For the year ended 31 December 2025
Retained
Share capital earnings
Total
$'000
$'000
$'000
Balance at 1 January 2024
70,000
753,086
823,086
Profit for the period
-
117,320
117,320
-
117,320
117,320
Total comprehensive income/(loss) for the period
Dividends to owners of the Company
-
(163,361) (163,361)
Balance at 31 December 2024
70,000
707,045
777,045
Retained
Share capital earnings
Total
$'000
$'000
$'000
70,000
707,045
777,045
Balance at 1 January 2025
Profit for the period
-
65,695
65,695
Total comprehensive income/(loss) for the period
-
65,695
65,695
Dividends to owners of the Company
-
(117,320) (117,320)
70,000
655,420 725,420
Balance at 31 December 2025
The notes on pages 14 to 63 are an integral part of these financial statements.
12
Mercedes-Benz Australia/Pacific Pty Ltd
Statement of Cash Flows
For the year ended 31 December 2025
2025
2024
Notes
$'000
$'000
Cash flows from operating activities
Cash receipts from customers
2,840,481
3,231,018
Cash paid to suppliers and employees
(2,675,148)
(2,809,121)
Cash generated from operations
555,870
31,360
Interest received
48,982
52,603
Interest paid
(55,082)
(47,493)
Net income taxes received/(paid)
12,789
(55,628)
24(b)
570,148
(26,747)
Net cash (outflow)/inflow from operating activities
Cash flows (used in)/from investing activities
Payments for property, plant and equipment
(804)
(1,372)
Loans to related parties
(3,833,310)
(3,260,279)
3,899,945
Repayments of loans by related parties
3,844,496
Net cash inflow from investing activities
10,382
638,294
Cash flows (used in)/from financing activities
Proceeds from borrowings
1,593,961
4,458,050
Repayment of borrowings
(2,087,193)
(4,830,354)
Proceeds from borrowings from other related entities
622
675
Repayment of borrowings from other related entities
(721)
(675)
Dividends paid
(163,361)
(117,320)
Payment of lease liabilities
(2,416)
(2,778)
(613,021)
(538,489)
Net cash (outflow) from financing activities
Net (decrease)/increase in cash and cash equivalents
(32,491)
73,058
126,406
53,348
Cash and cash equivalents at the beginning of the financial period
Cash and cash equivalents at end of year
93,915
126,406
* These amounts include payments to suppliers under supplier finance arrangements
The notes on pages 14 to 63 are an integral part of these financial statements.
13
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
1ꢀ REPORTINGꢀENTITY
Mercedes-BenzꢀAustralia/PacificꢀPtyꢀLtdꢀ(“theꢀCompany”)ꢀisꢀaꢀfor-profitꢀcompanyꢀdomiciledꢀinꢀAustralia.ꢀTheꢀaddressꢀofꢀtheꢀ
Company’sꢀregisteredꢀofficeꢀisꢀ44ꢀLexiaꢀPlace,ꢀMulgrave,ꢀVictoriaꢀ3170.
TheꢀCompanyꢀisꢀprimarilyꢀinvolvedꢀinꢀtheꢀimportation,ꢀmarketingꢀandꢀdistributionꢀofꢀpassengerꢀandꢀlightꢀcommercialꢀvehiclesꢀandꢀ
theirꢀcomponentꢀparts.
2ꢀ BASISꢀOFꢀPREPARATION
(a)ꢀ Statementꢀofꢀcompliance
TheꢀfinancialꢀstatementsꢀareꢀgeneralꢀpurposeꢀfinancialꢀstatementsꢀwhichꢀhaveꢀbeenꢀpreparedꢀinꢀaccordanceꢀwithꢀAustralianꢀ
AccountingꢀStandardsꢀ(AASBs)ꢀadoptedꢀbyꢀtheꢀAustralianꢀAccountingꢀStandardsꢀBoardꢀ(AASB)ꢀandꢀtheꢀCorporationsꢀActꢀ2001.ꢀ
TheꢀfinancialꢀstatementsꢀofꢀtheꢀCompanyꢀcomplyꢀwithꢀInternationalꢀFinancialꢀReportingꢀStandardsꢀ(IFRS)ꢀadoptedꢀbyꢀtheꢀ
InternationalꢀAccountingꢀStandardsꢀBoardꢀ(IASB).
Certainꢀpriorꢀyearꢀamountsꢀhaveꢀbeenꢀreclassifiedꢀforꢀconsistencyꢀwithꢀtheꢀcurrentꢀyearꢀpresentation.ꢀTheseꢀreclassificationsꢀ
hadꢀnoꢀeffectꢀonꢀtheꢀreportedꢀprofitꢀofꢀtheꢀCompany.
TheꢀfinancialꢀstatementsꢀwereꢀauthorisedꢀforꢀissueꢀbyꢀtheꢀBoardꢀofꢀDirectorsꢀonꢀꢁꢂꢀAprilꢀ2026.
(b)ꢀ Basisꢀofꢀmeasurement
Theꢀfinancialꢀstatementsꢀhaveꢀbeenꢀpreparedꢀonꢀtheꢀhistoricalꢀcostꢀbasisꢀexceptꢀforꢀtheꢀfollowingꢀmaterialꢀitemsꢀinꢀtheꢀstatementꢀ
ofꢀfinancialꢀposition:
• derivative financial instruments are measured at fair value;
• liabilities for cash-settled share-based payment arrangements are measured at fair value.
• certain classes of property, plant and equipment and right-of-use assets are measured at historical cost less depreciation and
impairment.
The methods used to measure fair value are discussed further in Note 4.
The financial report of the Company has been prepared on a going concern basis.
New and amended standards adopted by the Company
The Company has adopted all relevant new and amended standards and interpretations issued by the AASB and IASB which
are effective for annual reporting periods beginning on 1 January 2025. The new standards and amendments did not have any
impact on the amounts recognised in the current and prior periods.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2025
reporting periods and have not been early adopted by the Company. AASB 18 Presentation and Disclosure in Financial
Statements (effective for annual periods beginning on or after 1 January 2027) will replace AASB 101 Presentation of financial
statements, introducing new requirements that will help to achieve comparability of the financial performance of similar entities
and provide more relevant information and transparency to users. Even though AASB 18 will not impact the recognition or
measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in
particular those related to the consolidated statement of comprehensive income or loss and providing management-defined
performance measures within the financial statements. Management is currently assessing the detailed implications of applying
the new standard on the Company's financial statements.
(c) Functional and presentation currency
The financial statements are presented in Australian dollars which is the Company’s functional currency.
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191 and
in accordance with that, all financial information presented in Australian dollars has been rounded to the nearest thousand,
unless otherwise stated.
14
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
2
BASIS OF PREPARATION (CONTINUED)
(d) Use of estimates and judgements
The preparation of financial statements in conformity with AASBs requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future
periods affected.
Information about critical judgements in applying accounting policies that have the most significant effect on the amounts
recognised in the financial statements is included in the following notes:
•
Note 14 - Inventories
•
Note 16 - Tax assets and liabilities
•
Note 21 - Provisions
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these financial statements.
(a) Foreign currencies
Transactions
Transactions in foreign currencies are translated to the Company’s functional currency at the foreign exchange rates at the
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated
to Australian dollars at the foreign exchange rate at that date. The foreign currency gain or loss on monetary items is the
difference between amortised cost in functional currency at the beginning of the period, adjusted for effective interest and
payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction.
Foreign exchange differences arising on retranslation are recognised in profit or loss except for qualifying cash flow hedges
which are recognised directly in other comprehensive income to the extent the hedge is effective.
(b) Financial instruments
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument
of another entity. Financial instruments in the form of financial assets and financial liabilities are generally presented separately.
Financial instruments are recognised as soon as the Company becomes a party to the contractual provisions of the financial
instrument.
Upon initial recognition, financial assets are measured at fair value. For the purpose of subsequent measurement, financial
assets are allocated to one of the categories mentioned in AASB 9 Financial Instruments (financial assets measured at
amortized cost, financial assets measured at fair value through other comprehensive income and financial assets measured at
fair value through profit or loss). Transaction costs directly attributable to acquisition or issuance are considered by determining
the carrying amount if the financial instruments are not measured at fair value through profit or loss.
15
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(b) Financial instruments (continued)
Financial Instruments (continued)
Non-derivative financial assets
Financial assets primarily comprise trade receivables. A trade receivable without a significant financing component is initially
measured at the transaction price. The classification of financial instruments is based on the business model in which these
instruments are held and on their contractual cash flows. The determination of the business model is made at the portfolio level
and is based on management’s intention and past transaction patterns. Assessments of the contractual cash flows are made on
an instrument by instrument basis.
Financial assets at amortised cost
Financial assets at amortised cost are non-derivative financial assets with contractual cash flows that consist solely of payments
of principal and interest on the nominal amount outstanding and which are held with the aim of collecting the contractual cash
flows, such as trade receivables or cash and cash equivalents. Cash and cash equivalents consist primarily of cash on hand,
demand deposits at banks, as well as certificates of deposits with a remaining term when acquired of up to three months, which
are not subject to any material value fluctuations. Cash and cash equivalents correspond with the classification in the Statement
of Cash Flows.
Non-derivative financial liabilities
The Company initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other
financial liabilities (including liabilities designated at fair value through profit or loss) are initially recognised on the trade date at
which the Company becomes a party to the contractual provisions of the instrument. The Company derecognises a financial
liability when its contractual obligations are discharged or cancelled or expire.
The Company has the following non-derivative financial liabilities: loans and borrowings and trade and other liabilities. Loans,
borrowings and other liabilities due within 12 months are classified as current. All other loans, borrowings and liabilities are
classified as non-current.
Financial liabilities measured at amortised cost
The non-derivative financial liabilities are initially recognised at fair value less directly attributable transaction costs. Subsequent
to initial recognition, these financial liabilities are stated at amortised cost using the effective interest rate method.
Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only
when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and
settle the liability simultaneously.
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options
are recognised as a deduction from equity, net of any tax effects.
Dividends
Dividends are recognised as a liability in the period in which they are declared.
(c) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes
the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its
intended use, and the costs of dismantling and removing items and restoring the site on which they are located. Purchased
software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
In respect of borrowing costs relating to qualifying assets for which the commencement date for capitalisation is on or after 1
January 2009, the Company capitalises borrowing costs directly attributable to the acquisition, construction or production of a
qualifying asset as part of the cost of that asset.
16
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(c) Property, plant and equipment (continued)
Recognition and measurement (continued)
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment and are recognised gross within other income in profit or
loss.
17
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(c) Property, plant and equipment (continued)
Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less
its residual value.
Depreciation is recognised in profit or loss on a straight line basis over the estimated useful lives of each part of an item of
property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic
benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it
is reasonably certain that the Company will obtain ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives in the current and comparative periods are as follows:
Motor vehicles subject to operating leases, the
Company as lessor
0-5 years
Office furniture, fittings, plant & equipment
3-23 years
Freehold land and improvements
12-25 years
Buildings
20-40 years
Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item
if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be
measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day to day servicing of property,
plant and equipment are recognised in profit or loss as incurred.
(d) Leasing
Leases include all contracts that transfer the right to use a specified asset for a stated period of time in exchange for
consideration, even if the right to use such asset is not explicitly described in the contract. The Company is a lessee mainly of
real estate properties used for the purposes of parts warehousing, regional training offices and hospitality.
The Company as lessee
The Company as a lessee recognises for generally all lease contracts right-of-use assets as well as leasing liabilities for the
outstanding lease payments.
Right-of-use assets, which are included under property, plant and equipment, are initially measured at cost. The cost of a
right-of-use asset comprises the amount of the initial measurement of the lease liability, any lease payments made at or before
the commencement date less any lease incentives received from the lessor, any initial direct costs and an estimate of costs to
be incurred in dismantling or removing the underlying asset.
A right-of-use asset is subsequently measured at cost less any accumulated depreciation and, if necessary, any accumulated
impairment. The right-of-use asset is depreciated to the end of the lease term.
18
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(d) Leasing (continued)
The lease liabilities include the following lease payments:
•
fixed payments including de facto fixed payments, less lease incentives receivables from the lessor;
•
variable lease payments linked to an index or interest rate;
•
amounts expected to be payable by the lessee under residual value guarantees;
•
the exercise price of purchase options, when exercise is estimated to be reasonably certain; and
•
contractual penalties for the termination of a lease if the lease term reflects the exercise of a termination option.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental
borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The Company determines its
incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to
reflect the terms of the lease and type of the asset leased.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term
leases, including IT equipment and office furniture. The Company recognises the lease payments associated with these leases
as an expense on a straight-line basis over the lease term.
The Company as lessor
Based on the risk and rewards associated with a leased asset, it is assessed whether economic ownership of the leased asset
is transferred to the lessee (so-called finance leases) or remains with the lessor (so-called operating leases). Operating leases,
i.e. by which the economic ownership of the vehicle remains with the Company, relate to vehicles that the Company acquires
and leases to third parties. Additionally, sales of vehicles where the Company also has a repurchase obligation are accounted
for as an operating lease:
•
Sales of vehicles that include a forward (an entity’s obligation to repurchase the asset) or a call option (an entity’s right to
repurchase the asset) are accounted for as operating leases.
•
Sales of vehicles including a put option (an entity’s obligation to repurchase the asset at the customer’s request) are
accounted for as operating leases if the customer has a significant economic incentive to exercise that right. Otherwise a
sale with a right of return is reported. The Company considers several factors when assessing whether a customer has a
significant economic incentive to exercise their right at contract inception. Amongst others these are the relationship
between repurchase price and the expected future market value (at the time of repurchase) of the asset or historical return
rates.
As part of the established residual-value management process, especially for operating lease contracts, certain assumptions are
regularly made at local and corporate levels regarding the expected level of prices, based upon which the cars to be returned in
the leasing business are evaluated. If changing market developments lead to a negative deviation from assumptions, there is a
risk of lower residual values of used vehicles. Depending on the region and the current market situation, the measures taken
generally include continuous market monitoring as well as, if required, price-setting strategies or sales-promotion measures
designed to regulate vehicle inventories. The quality of market forecasts is verified by regular comparisons of internal and
external sources, and, if required, the determination of residual values is adjusted and further developed with regard to methods,
processes and systems.
In the case of accounting as an operating lease, these vehicles are recorded at cost under property, plant and equipment and
are depreciated over the contract term on a straight-line basis with consideration of the expected residual values. Changes in
the expected residual values lead either to prospective adjustments of the scheduled depreciation or to an impairment loss if
necessary.
(e) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out
principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred
in bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and
selling expenses.
19
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(f) Impairment
As required under AASB 9, an annual assessment of the expected credit loss has been performed using the simplified method.
This has been applied on the trade receivable balance to arrive at the bad debt provision created during the year. There has
been no instance of credit loss on Intercompany balances in the past and hence no expected credit losses has been created on
Intercompany balances.
(g) Employee benefits
Other long-term employee benefit obligations
The Company’s net obligation in respect of long-term employee benefits, other than defined benefit plans, is the amount of
future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated
using expected future increases in wage and salary rates including related on-costs and expected settlement dates, and is
discounted to its present value using the rates attached to the corporate bonds at the reporting date which have maturity dates
approximating to the terms of the Company’s obligations.
Termination benefits
Termination benefits are recognised as an expense when the Company is demonstrably committed, without realistic possibility
of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide
termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary
redundancies are recognised as an expense if the Company has made an offer of voluntary redundancy, it is probable that the
offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months
after the reporting period, then they are discounted to their present value.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the
Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee
and the obligation can be estimated reliably.
Share-based payment transactions
The Performance Phantom Share Plan allows the Company to arrange the issue of shares or the equivalent value of shares of
the ultimate parent, Mercedes-Benz Group AG, to employees of the Company.
In 2006, the former Daimler AG adopted the “Performance Phantom Share Plan” under which virtual shares (phantom shares)
are granted to eligible employees entitling them to receive cash payment after four years of service.
The fair value of the amounts payable to employees in respect of the Performance Phantom Share Plan, which are settled in
cash, are recognised as an employee expense, with a corresponding increase in liabilities over the period in which the
employees become unconditionally entitled to the payment. The liabilities are re-measured at each reporting date and at
settlement date. Any changes in the fair value of the liability are recognised as an employee expense in profit or loss.
Fair value is measured with reference to the quoted price of one ordinary share in Mercedes-Benz Group AG and the estimated
target achievement grades as of reporting date.
(h) Provisions
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be
estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is
material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount
is recognised as a finance cost.
20
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(h) Provisions (continued)
Warranties
A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical
warranty data and a weighting of all possible outcomes against their associated probabilities.
Some claims are recoverable from the parent company, the provision represents the full amount and the corresponding
receivable has been recognised.
Agent Remuneration
A provision is recognised for the future payments to Agents in connection with the sale of new vehicles. The provision is
recognised at the time the vehicle is sold and is based on the fixed and variable rates per the Agent Agreement.
Legal
Provisions for legal costs are only recognised when the Company has a probable outflow or a legal obligation to pay a legal
settlement and legal costs to parties subject to litigation. The provision is a best estimate of the present value of the expenditure
required to settle these legal commitments at the reporting date.
(i) Revenue
Goods sold
Revenue from sales of vehicles, service parts and other related products is recognised when control of the goods is transferred
to the customer. This generally occurs at the time the customer takes possession of the products. Generally, payment from
sales of vehicles, service parts and other related products are made when the customer obtains control of these products.
The Company also enters into sale agreements which include a repurchase obligation in the form of a put option (an entity's
obligation to repurchase the asset at the customer's request). Where the customer does not have a significant economic
incentive to exercise that right, these arrangements are accounted for as a sale with a right of return. The Company considers
several factors when assessing whether the customer has a significant economic incentive to exercise this right. Amongst
others, these are the relationship between repurchase price and the expected future market value (at the time of repurchase) of
the asset, or historical return rates.
The Company uses a variety of sales promotion programs dependent on various market conditions as well as the respective
product life cycles and product-related factors (such as amounts of discounts offered by competitors, excess industry production
capacity, the intensity of market competition and consumer demand for the products). Revenue is recognised net of sales
reductions such as cash discounts and sales incentives granted.
The Company offers extended, separately priced warranties for certain products as well as service and maintenance contracts.
Revenue from these contracts is deferred insofar as a customer has made an advance payment and is generally recognised
over the contract period in proportion to the costs expected to be incurred based on historical information. A loss on these
contracts is recognised in the current period if the sum of the expected costs for services under the contract exceeds unearned
revenue. Usually those contracts are paid in advance or in equal instalments over the contract term.
Rental income
Where the Company has agreed to provide residual value guarantees for operating leases entered into between
Mercedes-Benz Financial Services Australia Pty Ltd and their external customers, rental income from these leases is
recognised as other income on a straight-line basis over the term of the lease. Lease income prepaid by Mercedes-Benz
Financial Services Australia Pty Ltd is classified as deferred income.
Services income
Where the Company has agreed to provide services to certain external and other related parties, income from these
agreements is recognised over the period when the services are provided.
Income from these agreements is recognised as other income when the services are provided.
(j) Finance income and expenses
Finance income comprises interest income on funds invested, dividend income and changes in fair value of financial assets at
fair value through profit or loss. Interest income is recognised in profit or loss as it accrues, using the effective interest rate
method. Dividend income is recognised in profit or loss on the date the entity’s right to receive payment is established.
21
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(j) Finance income and expenses (continued)
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, changes in the fair value
of financial assets at fair value through profit or loss, impairment losses recognised on financial assets and losses on hedging
instruments that are recognised in profit or loss. All borrowing costs that are not directly attributable to acquisition, construction
or production of a qualifying asset are recognised in profit or loss using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
(k) Taxation
Tax Consolidation
The Company is a member of a multiple entry consolidated (MEC) Group, whereby the group of Australian entities (being the
Company, Mercedes-Benz Group Australia/Pacific Pty Ltd, Mercedes-Benz Vans Australia/Pacific Pty Ltd, Mercedes-Benz
Mobility Australia Pty Ltd and Mercedes-Benz Financial Services Australia Pty Ltd) are all wholly foreign owned by a common
non-resident company, but do not have a common Australian resident parent company. As a result, these entities form part of a
MEC Group that are consolidated and taxed as a single entity for Australian tax purposes. The provisional head entity of the
Australian tax consolidated group is Mercedes-Benz Group Australia/Pacific Pty Ltd.
Current and deferred tax expense / income, deferred tax liabilities and deferred tax assets arising from temporary differences of
the members of the tax-consolidated group are recognised in the separate financial statements of the members of the
tax-consolidated group using the “separate taxpayer within group” approach by reference to the carrying amounts of assets and
liabilities in the separate financial statements of each entity and the tax values applying under tax consolidation.
Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the members of the
tax-consolidated group are assumed by the provisional head entity and are recognised by the Company as amounts payable
(receivable) to (from) the provisional head entity in conjunction with any tax funding arrangement amounts (refer below). Any
difference between these amounts is recognised as an equity contribution or distribution.
Income tax
Income tax expense comprises current and deferred tax. Current and deferred tax is recognised in profit or loss except to the
extent that it relates to items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is
recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Nature of tax funding and sharing arrangements
The Company and the provisional head entity, in conjunction with other members of the tax-consolidated group, have entered
into a tax funding agreement which sets out the funding obligations of members of the tax-consolidated group in respect of tax
amounts. The tax funding arrangements require payments to / (from) the provisional head entity equal to the current tax liability /
(asset) and any tax-loss deferred tax asset assumed by the provisional head entity, resulting in the provisional head entity
recognising an inter-entity receivable / (payable) equal in amount to the tax liability / (asset) assumed. The inter-entity payable /
(receivable) is at call.
Contributions to fund the current tax liabilities are payable as per the tax funding arrangement, and reflect the timing of the
provisional head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.
The provisional head entity and other members of the tax-consolidated group have also entered into a tax sharing agreement.
The tax sharing agreement provides for the determination of the allocation of income tax liabilities between the entities should
the provisional head entity default on its tax payment obligations. No amounts have been recognised in the financial statements
in respect of this agreement as payment of any amounts under the tax sharing agreement is considered remote.
22
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(l) Segment reporting
Determination and presentation of operating segments
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components. All
operating segments’ operating results are regularly reviewed by the Company’s CEO to make decisions about resources to be
allocated to the segment and assess its performance, and for which discrete financial information is available.
Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible
assets other than goodwill.
(m) Goods and Services Tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of
GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to,
the ATO is included as a current asset or liability in the Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis. The GST components of cash flows arising from
investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
4
DETERMINATION OF FAIR VALUES
A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and
non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on
the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed
in Note 4 or the notes specific to that asset or liability.
(a) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market
rate of interest at the reporting date. These fair values are based on Level 2 inputs.
(b) Loans and borrowings
Fair value of loans and borrowings is determined for disclosure purposes (Note 18). The fair value of loans and borrowings that
are readily traded are revalued at reporting date to market value using quoted market prices (Level 1 inputs) or, if not readily
traded, are measured based on present value of future expected principal and interest cash flows, discounted at the market rate
of interest at the reporting date (Level 2 inputs).
(c) Derivatives
The fair value of forward exchange contracts is estimated by discounting the difference between the contractual forward price
and the current forward price for the residual maturity of the contract using a market rate of interest at the reporting date.
The fair value of interest rate and cross currency swaps are based on market values which approximate estimated future cash
flows based on the terms of maturity of each contract and using observable market interest and foreign exchange rates at the
reporting date.
Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the entity and
counterparty when appropriate. Refer to Note 19 for more information.
Fair values are based on level 2 inputs which requires inputs, other than quoted prices in active markets for identical assets and
liabilities, that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
23
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
5
REVENUE
Revenue disclosed in the Statement of Profit or Loss includes revenue from contracts with customers and other revenue not in
the scope of AASB 15. Other revenue primarily comprises revenue from the rental and leasing business.
Revenue according to AASB 15 includes revenue that was deferred and included in contract liabilities at 31 December 2025
amounting to $23.561 million (2024: $33.749 million).
Revenue that is expected to be recognised within three years related to performance obligations that are unsatisfied (or partially
unsatisfied) amounted to $76.976 million at 31 December 2025 (2024: $75.199 million) and revenue from performance
obligations partially satisfied in previous periods amounted to $65.579 million (2024: $39.245 million). This revenue is mainly
derived from long-term service and maintenance contracts and extended warranties. It does not include performance obligations
from customer contracts that have initial expected durations of one year or less. Long-term performance obligations of minor
importance to the overall contract value of a bundled contract are not considered in assessing the initial duration of the bundled
contract. Contract liabilities are included as part of Note 17 - Trade and other liabilities.
The below table discloses revenue from contracts with customers and is disaggregated by major products and service lines. The
table also includes a reconciliation of the disaggregated revenue with the Company's reportable segments.
Cars
Vans
Total
2025
$'000
$'000
$'000
Timing of Revenue:
At a point in time
2,409,031
379,342
2,788,373
Over time
38,614
7,648
46,262
2,447,645
386,990
2,834,635
Total revenue
Cars
Vans
Total
2024
$'000
$'000
$'000
Timing of Revenue:
At a point in time
2,254,321
394,119
2,648,440
45,826
3,949
49,775
Over time
2,300,147
398,068
2,698,215
Total revenue
24
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
6
OTHER INCOME
2025
2024
Notes
$'000
$'000
Rental income
Employee lease program
3,001
372
Other
From other related parties
31(c), 31(d)
4,596
8,919
15,817
External parties
8,256
Total other income
15,853
25,108
Rental Income
: The Company earns income from employees entering into lease arrangements with Mercedes-Benz Financial
Services Australia Pty Ltd (a related party) for the Company's products under the employee vehicle lease program.
Other:
The Company earns income from other related and external parties in relation to recharged costs for shared services
including building rents, IT and warehouse costs.
7
EMPLOYEE EXPENSES
2025
2024
$'000
$'000
Wages and salaries
(37,412)
(38,614)
Other associated personnel expenses
(5,490)
(5,934)
Contributions to defined contribution plans
(4,248)
(4,440)
Long service leave expense
(2,397)
(2,766)
Annual leave expense
(1,025)
(823)
Termination benefits
(2,674)
(1,367)
Total employee expenses
(53,044)
(54,146)
25
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
8
EXPENSES
(a) Cost of sales
2025
2024
$'000
$'000
Total cost of sales
(2,421,790)
(2,309,218)
Cost of sales comprises the expenses of vehicles and parts sold such as the purchase costs and importation costs (including
import duties, freight charges and insurance). Cost of sales also includes expenses relating to inland transport, pre-delivery
inspection costs, net write-down of inventories and sole distribution rights fee.
(b) Other expenses:
Vehicle related selling expenses
(167,290)
(149,917)
Marketing expenses
(39,881)
(43,144)
IT expenses
(28,280)
(19,997)
Miscellaneous other expenses & other selling costs
(2,322)
(6,342)
Other overheads
(14,378)
(20,470)
Demo vehicles & warehouse service costs
(12,795)
(15,911)
Roadside assistance
(3,412)
(10,363)
Loss on disposal of property, plant and equipment
(49)
(157)
(277,615)
(257,093)
Total other expenses
9
AUDITORS' REMUNERATION
2025
2024
$
$
Audit services
Auditors of the Company - PwC Australia
(375,300)
Audit and Review of financial reports
(381,520)
(381,520)
(375,300)
26
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
10 NET FINANCING COSTS
2025
2024
Notes
$'000
$'000
Recognised in profit or loss
Interest income from:
Related parties
45,463
46,676
External parties
2,341
10,524
Guarantee fee income from:
Related parties
866
1,652
Net foreign exchange gain
-
146
Impairment reversals on trade receivables
13
-
198
59,196
Finance income
48,670
Interest expense from:
Related parties
(6,207)
(4,073)
External parties
(38,779)
(50,908)
Guarantee fee expense from:
Related parties
(876)
(1,704)
Net foreign exchange loss
(194)
-
Net unwind of discounting on provisions and employee benefits
(6,783)
(9,086)
Impairment losses on trade receivables
13
(581)
-
(34)
(74)
Interest expense on lease liability
Finance cost
(51,320)
(67,979)
Net finance (costs)/income
(2,650)
(8,783)
27
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
11 INCOME TAX (EXPENSE)/BENEFIT
2025
2024
$'000
$'000
Current tax benefit/(expense)
Current year
(15,868)
(41,971)
1,331
55,193
Adjustments for prior years
(14,537)
13,222
Deferred tax benefit/(expense)
Origination and reversal of temporary differences
(7,175)
16,494
Adjustments for prior years
(1,023)
1,202
17,696
(8,198)
Total income tax benefit/(expense)
(22,735)
30,918
Numerical reconciliation between tax expense and pre-tax net
profit
Profit for the period
65,695
117,320
22,735
(30,918)
Total income tax expense
Profit before income tax
88,430
86,402
Income tax expense using the Company's domestic tax rate of 30% (2024 - 30%)
(26,529)
(25,921)
(Increase)/decrease in income tax benefit/(expense) due to:
Permanent differences
3,486
444
Income tax over/(under) provided in prior year
308
56,395
Income tax benefit (expense) on pre-tax net profit
30,918
(22,735)
The income tax benefit reported by the Company for the 31 December 2024 year includes prior year adjustments in relation to
the 2015 and 2016 income years that resulted in an income tax refund of $53.625 million from the Australian Taxation Office.
This income tax refund was received from the Australian Taxation Office in March 2025.
12 CASH AND CASH EQUIVALENTS
2025
2024
Notes
$'000
$'000
Bank balances
Bank balances
28,915
126,406
Call deposits
65,000
-
93,915
126,406
Cash and cash equivalents in the statement of cash flows
24(a)
The Company’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note
19. Call deposits relate to funds with maturities of less than 3 months from inception.
28
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
13 TRADE AND OTHER RECEIVABLES
2025
2024
Notes
$'000
$'000
Current
Non-interest bearing
Net trade receivables
95,691
132,218
Receivables due from ultimate parent entity
31(a)
7,629
7,684
Receivables due from intermediate parent entity
31(b)
27,500
28,837
Receivables due from immediate parent entity
31(c)
37,070
64,115
Receivables due from other related entities
31(d)
26,645
45,413
Prepayments and other assets
3,156
1,540
278,470
199,028
Interest bearing
Loans due from other related entities
31(d)
836,455
333,442
836,455
333,442
1,035,483
611,912
Non-current
Non-interest bearing
21,620
27,500
Receivables due from intermediate parent entity
31(b)
21,620
27,500
.
Interest bearing
Loans due from other related entities
31(d)
199,606
648,076
648,076
199,606
221,226
675,576
Trade receivables are shown net of impairments. Impairment losses were recognised on trade receivables in the current year
amounting to $0.581 million (2024: $0.198 million impairment reversal) (refer Note 10).
The Company’s exposure to credit risk for financial assets is disclosed in Note 19.
29
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
14 INVENTORIES
2025
2024
$'000
$'000
Finished goods
657,624
951,080
Goods in transit
167,340
343,789
824,964
1,294,869
Finished goods – at cost
407,010
510,398
Finished goods - at net realisable value
Finished goods - at cost
501,650
307,520
Impairment loss
(56,906)
(60,968)
250,614
440,682
Total finished goods
657,624
951,080
Goods in transit - at cost
160,115
301,706
Goods in transit - at net realisable value
Goods in transit - at cost
8,559
50,831
Impairment loss
(1,334)
(8,748)
7,225
42,083
167,340
343,789
Total goods in transit
Estimates and Judgements
The provision for impairment of inventories ("Impairment loss") assessment requires a degree of estimation and judgement. The
level of the provision is assessed by taking into account recent sales experience, the ageing of inventories, damaged, obsolete,
slow moving inventories and other factors that affect inventory obsolescence.
30
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
16 TAX ASSETS AND LIABILITIES
Recognised deferred tax assets
Net deferred tax assets are attributable to the following:
2025
2024
$'000
$'000
Recognised deferred tax assets
Provisions and contract liabilities
101,328
95,887
Employee benefits
4,513
(78)
Payable to other related entities
13,409
17,992
Lease liabilities
707
1,432
Provision for impairment losses
313
139
Provision for inventory obsolesence
17,545
20,986
Depreciation timing differences
4,555
4,903
Other payables
4,369
12,496
Total deferred tax assets
146,731
153,765
Recognised deferred tax liabilities
Vehicles subject to operating lease
(13,352)
(12,444)
Right-of-use assets
(1,356)
(655)
Prepayments
(7)
61
Profit deferral for tax purposes
(1,818)
(929)
(15,832)
(14,668)
Total deferred tax liabilities
Net deferred tax assets
130,899
139,097
33
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
16 TAX ASSETS AND LIABILITIES (CONTINUED)
Recognised deferred tax assets (continued)
In accordance with the tax consolidation legislation, Mercedes-Benz Group Australia/Pacific Pty Ltd (the provisional head
company) has assumed the current tax liability or asset initially recognised by the Company which is a member of the tax
consolidated group.
The Company is a member of a tax-consolidated group (‘the Group’) and is jointly and severally liable for the income tax of that
group in the event that the provisional head entity defaults in its payment obligations to the Australian Tax Office. The
provisional head entity has not been in default of its payment obligations and the directors are of the opinion that the probability
of default is remote.
Under the tax funding arrangement the Company and the provisional head company recognise an inter-entity payable or
receivable equal in amount to the current tax liability or asset assumed. The Company continues to recognise income tax
expense or benefit even though it has derecognised its current tax liability or asset.
At 31 December 2025 the Company had an intercompany receivable of $18.86 million (2024: $50.25 million receivable) relating
to a current tax receivable assumed by the provisional head company which is included in Trade and other receivables (refer to
Note 13).
Estimates and Judgements
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing
of future taxable income. The calculation of income taxes has therefore been done with the best possible judgement based on
past experiences, pending an assessment by the taxable authorities here in Australia.
34
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
16 TAX ASSETS AND LIABILITIES (CONTINUED)
Recognised deferred tax assets (continued)
Movement in temporary differences during the year
2025
Balance at 31
Balance at 1 Recognised in
December
January 2025
income
2025
$'000
$'000
$'000
Deferred tax assets
Provisions and contract liabilities
95,887
5,441
101,328
Employee benefits
4,513
(4,591)
(78)
Payable to other related entities
13,409
4,583
17,992
Lease liabilities
1,432
(725)
707
Provision for impairment losses
139
174
313
Provision for inventory obsolescence
20,986
(3,441)
17,545
Depreciation timing differences
4,903
(348)
4,555
Other payables
12,496
(8,127)
4,369
Total deferred tax assets
153,765
(7,034)
146,731
Deferred tax liabilities
Vehicles subject to operating lease
(12,444)
(908)
(13,352)
Right-of-use assets
(1,356)
701
(655)
Prepayments
61
(68)
(7)
Profit deferral for tax purposes
(929)
(889)
(1,818)
(14,668)
(1,164)
(15,832)
Total deferred tax liabilities
Net deferred tax assets
139,097
(8,198)
130,899
35
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
16 TAX ASSETS AND LIABILITIES (CONTINUED)
Recognised deferred tax assets (continued)
Movement in temporary differences during the year (continued)
2024
Balance at 31
Balance at 1 Recognised in
December
January 2024
income
2024
$'000
$'000
$'000
Deferred tax assets
Provisions and contract liabilities
97,256
(1,369)
95,887
Employee benefits
5,081
(568)
4,513
Payable to other related entities
15,098
(1,689)
13,409
Lease liabilities
2,266
(834)
1,432
Provision for impairment losses
210
(71)
139
Provision for inventory obsolescence
11,489
9,497
20,986
Depreciation timing differences
3,691
1,212
4,903
Other payables
3,811
8,685
12,496
Total deferred tax assets
138,902
14,863
153,765
Deferred tax liabilities
Vehicles subject to operating lease
(13,355)
911
(12,444)
Right-of-use assets
(2,194)
838
(1,356)
Prepayments
(748)
809
61
Profit deferral for tax purposes
(1,204)
275
(929)
(17,501)
2,833
(14,668)
Total deferred tax liabilities
Net deferred tax assets
121,401
17,696
139,097
36
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
17 TRADE AND OTHER LIABILITIES
2025
2024
Notes
$'000
$'000
Current
Trade payables
73,003
59,029
Payable to ultimate parent entity
31(a)
4,344
1,945
Payable to intermediate entity
31(b)
206,240
242,979
Payable to immediate parent entity
31(c)
14,348
19,820
Payable to other related entities
31(d)
84,940
63,542
Other payables
60,302
99,980
Contract liabilities
5
103,573
122,901
604,724
552,222
Non-current
Payable to other related entities
31(d)
5,768
3,673
41,510
38,158
Contract liabilities
5
47,278
41,831
Trade and other liabilities are non-interest bearing and current trade and other liabilities are due and payable within 30 days
from receipt of invoice.
The Company’s exposure to liquidity and currency risks related to trade and other liabilities are disclosed in Note 19.
Contract liabilities
Contract liabilities primarily relate to prepaid service and maintenance contracts & the deferral of revenue from obligations from
sales transactions in the scope of AASB 15.
18 LOANS AND BORROWINGS
2025
2024
Notes
$'000
$'000
Current
Bank loans (secured)
18(b)
180,000
-
Notes (secured)
18(c)
449,490
100,626
Commercial papers (secured)
-
175,588
Loan from immediate parent entity
18(d), 31(c)
141,573
141,573
Loans from other related entity
18(e), 31(d)
622
675
Lease liabilities
18(f)
2,358
2,416
594,043
600,878
Non-current
Notes (secured)
18(c)
199,606
648,076
2,358
Lease liabilities
18(f)
-
199,606
650,434
2025
2024
Notes
$'000
$'000
The Company has access to the following lines of credit:
Bank overdraft (unsecured)
50,000
50,000
Bank loans (secured)
798,400
1,018,400
Notes (secured)
649,096
748,702
-
175,588
Commercial papers (secured)
1,497,496
1,992,690
37
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
18 LOANS AND BORROWINGS (CONTINUED)
2025
2024
Notes
$'000
$'000
Facilities utilised at reporting date
Notes (secured)
649,096
748,702
Bank loans (secured)
-
180,000
-
175,588
Commercial papers (secured)
649,096
1,104,290
2024
2025
$'000
$'000
Facilities not utilised at reporting date
Bank overdraft (unsecured)
50,000
50,000
Bank loans (secured)
798,400
838,400
848,400
888,400
The proceeds from interest bearing loans and borrowings have been used predominantly to finance the activities of related
parties and to meet the Company’s working capital needs. Interest payable on loans and borrowings and interest receivable
from related parties have been included in profit or loss as finance costs and income respectively.
Current portion of notes, commercial papers and loans from the immediate parent and other related entities are payable within
one year from the reporting date.
Non-current portion of Notes are payable on or before 18 January 2027, but after one year from the reporting date of these
financial statements.
The Company’s exposure to credit, liquidity and market rate risks and a sensitivity analysis for financial assets and liabilities are
disclosed in Note 19.
(a) Bank overdraft (unsecured)
The Company’s bank overdraft is denominated in AUD and is payable on demand and subject to annual review. Interest is
charged at prevailing market rates.
(b) Bank loans (secured)
The Company’s bank loans are denominated in AUD and are secured by the ultimate parent entity guarantee. The Company
has access to credit facilities which are subject to annual renewal. Interest is charged at prevailing market rates.
(c) Notes (secured)
The Company has authorised the following note issues outstanding at 31 December 2025 denominated in AUD which are
guaranteed by the ultimate parent entity:
Currency Value of Notes Due Date
On-lending
Interest
re-pricing
AUD
125,000,000
Jan-26
AUD
On maturity
AUD
25,000,000
Jan-26
AUD
On maturity
AUD
125,000,000
Jun-26
AUD
On maturity
AUD
125,000,000
Sep-26
AUD
On maturity
AUD
50,000,000
Oct-26
AUD
On maturity
AUD
200,000,000
Jan-27
AUD
On maturity
All issues are listed on the Luxembourg Stock Exchange and guaranteed by Mercedes-Benz Group AG. Interest rates on AUD
fixed interest notes are agreed at the inception of the notes. Average interest rates are set out in Note 19.
38
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
18 LOANS AND BORROWINGS (CONTINUED)
(d) Loans from immediate parent entity
The Company has authorised the following loans outstanding at 31 December 2025 denominated in AUD from the immediate
parent entity:
Currency
Value of Loan
Due Date
AUD
141,573,352
Jan-26
Loans from immediate parent entity are related to the cash pool balance outstanding as of 31 December 2025. Interest is
charged at prevailing market rates.
(e) Loans from other related entity
The Company has authorised the following loans from other related entities outstanding at 31 December 2025 denominated in
AUD:
Currency
Value of Loan
Due Date
AUD
622,195
Jan-26
Loans from other related entities is related to the cash pool balance with parties within the tax group under the cash pooling
arrangements with the Company. Interest is charged at prevailing market rates.
(f) Lease liabilities
The Company has the below outstanding lease liabilities at 31 December 2025 denominated in AUD:
2025
2024
$'000
$'000
Not later than one year
2,416
2,358
Later than one year but not later than five years
-
2,358
2,358
4,774
39
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
19 FINANCIAL INSTRUMENTS
The Company has exposure to credit, liquidity and market risks from its use of financial instruments.
This note presents information about the Company’s exposure to each of the above risks, its objectives, policies and processes
for measuring and managing risk, and the management of capital. Further quantitative disclosures are also included in this note
and throughout this financial report.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework and is
also responsible for developing and monitoring risk management policies.
Risk management policies are established to identify and analyse the risks faced by the Company to set appropriate risk limits
and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Company’s activities. The Company, through its training and management
standards and procedures, aims to develop a disciplined and constructive control environment in which all employees
understand their roles and obligations.
The Board oversees how management monitors compliance with the Company’s risk management policies and procedures and
reviews the adequacy of the risk management framework in relation to the risks faced by the Company.
Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations
are performed on all customers and certain key suppliers. Credit risk represents the loss that would be recognised if
counterparties failed to perform as contracted.
Swap and foreign exchange contracts are subject to credit risk in relation to the relevant counterparties, which is principally
Mercedes-Benz Group AG. At 31 December 2025 the long-term credit rating of Mercedes-Benz Group AG was as follows:
Standard & Poor's
A
Moody's
A2
DBRS
A
The Company’s ultimate parent Mercedes-Benz Group AG determines which counterparties are contracted with. Typically this
will only be with A rated external counterparties.
The maximum credit risk exposure on foreign currency contracts is the full amount of the foreign currency the Company pays
when settlement occurs, should the counterparty fail to pay the amount which it is committed to pay the Company.
Exposure to credit risk
The carrying amount of the Company’s financial assets represents the maximum credit exposure. The Company’s maximum
exposure to credit risk at the reporting date was:
2025
2024
Notes
$'000
$'000
Trade and other receivables
1,285,948
1,253,553
Cash and cash equivalents
12
93,915
126,406
1,347,468
1,412,354
The Company minimises concentration of credit risk by undertaking transactions with a large number of customers and
counterparties, and is not materially exposed to any individual third party customer as at the reporting date.
At reporting date 84% (2024: 88%) of trade and other receivables related to a related party, Mercedes-Benz Financial Services
Australia Pty Ltd. Other than this, there were no significant concentrations of credit risk relating to the Company’s trade and
other receivables.
The Company’s maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was:
40
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Credit risk (continued)
Exposure to credit risk (continued)
2025
2024
$'000
$'000
Australia
1,193,049
1,187,173
Europe
58,149
3,386
New Zealand
2,281
2,319
Asia
3
-
Africa
36
-
1,253,553
1,192,843
The Company’s maximum exposure to credit risk for trade and other receivables at the reporting date by type of customer was:
2024
2025
$'000
$'000
Wholesale customers
1,228,613
1,155,816
Retail customers
24,939
37,027
1,253,552
1,192,843
Impairment losses
The provision relates to lifetime expected credit losses on short term trade receivables.
The movement in the allowance for impairment in respect of the trade and other receivables during the year was:
2025
2024
$'000
$'000
Balance at 1 January
464
701
Impairment losses recognised / (reversed)
580
(198)
Allowance (utilised) / amount recovered
-
(39)
464
Balance at 31 December
1,044
Impairment losses recognised in respect of trade and other receivables for the reporting period primarily related to a high
probability of not collecting debts from external customers (refer Note 13).
41
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Credit risk (continued)
Impairment losses (continued)
The ageing of the Company’s trade and other receivables at the reporting date was:
2025
2024
Gross
Impairment
Gross
Impairment
$'000
$'000
$'000
$'000
Not past due
1,201,705
(125)
1,605,968
(166)
Past due 1-30 days
40,160
(120)
49,081
(147)
Past due 30-60 days
5,481
(137)
2,246
(56)
Past due 60-90 days
1,812
(54)
1,145
(34)
Past due 90-120 days
1,956
(108)
2,088
(115)
Past due 120+ days
3,482
(499)
521
55
1,254,596
(1,043)
1,661,049
(463)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Company’s reputation. The Company monitors cash flow requirements to ensure that it has sufficient cash on demand to meet
expected operational expenses on an on-going basis.
Mercedes-Benz Group AG applies a cash concentration method for cash and asset management throughout the global
Mercedes-Benz group. The overriding principle of cash management is to concentrate cash at the highest possible level to
maximise investment returns and to minimise borrowing costs.
Mercedes-Benz Group AG Group treasury develops proposals concerning the allocation of financial assets on the basis of the
global Mercedes-Benz group’s liquidity planning; they also determine the final asset allocation.
42
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Currency risk
The Company is exposed to foreign currency risk on purchases and funding transactions that are denominated in a currency
other than AUD. The currencies giving rise to this risk are EUR (spare parts and vehicle purchases or specific contracts).
The Company’s exposure to foreign currency risk at reporting date was based on notional amounts as set out in the tables
below. Note the only material net currency exposure is with EUR. As mentioned above these exposures are taken to hedge
against foreign currency firm purchase commitments. The effect of movements in foreign exchange rates on the Company’s net
currency exposure is disclosed in the Sensitivity Analysis below.
2025
AUD
EURO
USD
SGD
NZD
$'000
€'000
$'000
$'000
$'000
Non derivative financial assets
Cash and cash equivalents
93,915
-
-
-
-
Trade receivables
95,690
-
-
-
-
Receivables due from ultimate parent entity
-
6,215
-
-
-
Receivables due from intermediate parent entity
50,457
-
-
-
-
Receivables due from immediate parent entity
37,070
-
-
-
-
Loans and other receivables due from other
1,062,707
-
-
-
-
related entities
1,339,839
6,215
-
-
-
Non derivative financial liabilities
Notes issued (secured)
(649,096)
-
-
-
-
Loans from ultimate parent entity
(3,274)
-
-
-
-
Loans from immediate parent entity
(141,573)
-
-
-
-
Loans from other related parties
(622)
-
-
-
-
Lease liabilities
(2,358)
-
-
-
-
Trade and other liabilities
(419,235)
(1,868)
(23)
(36)
1
(1,216,158)
(1,868)
(23)
(36)
1
Net Currency Exposure
123,681
4,347
(23)
(36)
1
45
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Currency risk (continued)
2024
AUD
EURO
USD
SGD
NZD
$'000
€'000
$'000
$'000
$'000
Non derivative financial assets
Cash and cash equivalents
126,406
-
-
-
-
Trade receivables
132,222
-
-
-
-
Receivables due from ultimate parent entity
7,449
140
-
-
-
Receivables due from immediate parent entity
16,355
-
-
-
-
Loans and other receivables due from other
976,552
-
-
-
-
related entities
1,258,984
140
-
-
-
Non derivative financial liabilities
Bank loans (secured)
(180,000)
-
-
-
-
Notes issued (secured)
(648,076)
(60,000)
-
-
-
Commercial papers (secured)
(175,588)
-
-
-
-
Loans from immediate parent entity
(141,573)
-
-
-
-
Loans from other related parties
(675)
-
-
-
-
Lease liabilities
(4,774)
-
-
-
-
(448,665)
(1,531)
(27)
(773)
1
Trade and other liabilities
(1,599,351)
(61,531)
(27)
(773)
1
.
.
Net Currency Exposure
(340,367)
(61,391)
(27)
(773)
1
The following significant exchange rates were applied during and at the end of the year:
Average rate
Reporting date spot rate
2025
2024
2025
2024
AUD:EURO
0.571
0.615
0.569
0.596
AUD:NZD
1.109
1.090
1.159
1.105
AUD:USD
0.645
0.660
0.668
0.619
AUD:SGD
0.842
0.882
0.859
0.845
Sensitivity analysis
A 10 percent strengthening or weakening of the Australian dollar against the following currencies at 31 December 2025 would
have increased / (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in
particular interest rates, remain constant. The analysis is performed on the same basis for 2024.
2025
2024
Profit or loss
Profit or loss
$'000
$'000
$'000
$'000
10% increase 10% decrease
10% increase 10% decrease
AUD:EURO
692
(846)
(9,080)
11,098
AUD:USD
(3)
4
(4)
5
AUD:SGD
(4)
5
(80)
97
46
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Interest Rate Risk
Interest sensitivity analysis
As part of its risk management control systems, Mercedes-Benz Group AG (the new ultimate parent entity) employs
value-at-risk analysis as recommended by the Bank for International Settlements. In performing these analyses, the market risk
exposure to changes in foreign currency exchange rates, interest rates and equity prices are quantified on a continuous basis by
predicting the maximum loss over a target time horizon (holding period) and confidence level. The value-at-risk calculations
employed express potential losses in fair values, and are based on the variance-covariance approach, assuming a 99%
confidence level and a holding period of five days.
The value-at-risk calculation is performed by Mercedes-Benz Group AG for the Company. When the value-at-risk of the
Company’s portfolio of financial instruments is calculated, the current fair value of these financial instruments is first computed.
Then, the sensitivity of the Company’s portfolio value to changes in relevant market risk factors is quantified. Based on expected
volatilities and correlations of these market risk factors (obtained from the RiskMetricsTM dataset), potential changes of the
portfolio value are computed by applying the variance-covariance approach. The variance-covariance approach is a statistical
method used to quantify the total impact of all relevant major risk factors on the portfolio’s present value. Through these
calculations and by assuming a 99% confidence level and the five day holding period, the Company’s value-at-risk is obtained.
The 99% confidence level and the five day holding period indicate that there is only a 1% statistical probability that the
value-at-risk will be exceeded by losses at the end of the five day holding period.
The following table shows the period-end high, low and average value-at-risk (“VaR”) figures for the 2025 and 2024 portfolio of
interest rate sensitive financial instruments. VaR numbers reflect the quantified net fair value movements on the hedged loan
payables balances. Average exposure has been computed on an end of quarter basis:
Period-end
High
Low
Average
$'000
$'000
$'000
$'000
Interest rate risk
2025
814
2,100
807
1,282
2024
2,413
3,776
2,413
2,935
Cash flow exposures arising from significant portions of the loans payable to related parties are economically hedged by
amounts receivable from other related parties.
47
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Hedging
The Company hedges at least 90% of all receivables and payables denominated in foreign currency.
The Company uses foreign currency loan receivable instrument to hedge its foreign currency risk. Most of these contracts have
maturities that are on the same dates as the loans are due for repayment.
In regard to the Company’s EUR denominated notes and loans, the Company classifies related hedge contracts as fair value
hedges.
Gains and losses on revaluation of fair value hedges and their related notes or receivables are recorded in profit or loss as part
of net financing costs (Note 10).
Changes in the fair value of hedge contracts, that economically hedge forecasted transactions in foreign currencies, and for
which no hedge accounting is applied, are recognised in profit or loss. Both the changes in fair value of these hedge contracts
and the foreign exchange gains and losses relating to the monetary items are recognised as part of net financing costs (Note
10).
The Company has EUR denominated notes and loans (Note 18). The Company has fully hedged the principal amounts using
foreign currency deposits (Loans and other receivables due from other related entities) that mature on the same dates as the
loans are due for repayment.
Fair values
Fair value versus carrying amounts
Except for derivative financial assets and liabilities which are carried at fair values, all other monetary assets and liabilities are
carried at amortised cost. The carrying values of foreign currency borrowings are determined by translating them into AUD using
exchange rates prevailing at reporting date. For receivables and payables expected to be recovered or settled no more than
twelve months after the reporting date, the carrying value is deemed to reflect the fair value.
All financial assets and liabilities carried at fair value are based on level 2 inputs which requires inputs, other than quoted prices
in active markets for identical assets and liabilities, that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Interest rates used for determining fair value
The entity uses the implied zero coupon yield curve as of 31 December 2025 to discount financial instruments. The interest
rates used have been consistently applied using rates between 4.11% and 4.86% (2024: between 3.79% and 4.42%).
2024
2025
Carrying
Carrying
amount
Fair value
amount
Fair value
$'000
$'000
$'000
$'000
Non derivative financial assets
Loans due from other related entities
1,036,061
1,036,965
981,519
983,838
Non derivative financial liabilities
Bank loans (secured)
-
-
(180,000)
(180,000)
Notes (secured)
(748,702)
(750,609)
(649,096)
(650,000)
Commercial papers (secured)
-
-
(175,588)
(176,000)
Loans from immediate parent entity
(141,573)
(141,573)
(141,573)
(141,573)
Loans from other related entity
(622)
(622)
(675)
(675)
Lease liabilities
(2,358)
(2,358)
(4,774)
(4,774)
The basis of determining fair values is disclosed in Note 4.
Capital management
The Company’s policy is to maintain a strong capital base so as to sustain future development of the business. The Board of
Management actively monitor the financial performance of the Company to ensure adequate financial returns are generated.
The Board of Management also monitors the level of dividends to ordinary shareholders.
The Board of Management seeks to maintain a balance between the higher returns that might be possible with higher levels of
borrowings and the advantages and security afforded by a sound capital position.
48
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Capital management (continued)
The Company’s debt-to-adjusted capital ratio at the end of the reporting period was as follows:
2025
2024
$'000
$'000
Total liabilities
1,653,990
2,155,883
(126,406)
Less: cash and cash equivalents
(93,915)
Net debt
1,560,075
2,029,477
Total equity
725,420
777,045
Adjusted capital
725,420
777,045
2.15
2.60
Debt-to-adjusted capital ratio
There were no changes in the Company’s approach to capital management during the year.
The Company is not subject to any externally imposed capital requirements.
49
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
20 EMPLOYEE BENEFITS
2025
2024
$'000
$'000
Current
Liability for annual leave
2,992
3,119
Liability for long service leave
6,498
6,355
Cash settled share-based payment liability
436
569
5,375
Short term employee benefits
4,913
14,839
15,418
Non-current
Liability for long service leave
369
420
Cash settled share-based payment liability
494
488
863
908
Share based payments
Performance Phantom Share Plan
In 2006 the former Daimler AG adopted the “2005-2007 Performance Phantom Share Plan” under which virtual shares
(phantom shares) are granted to eligible employees entitling them to receive cash payment after four years of service. Total
cash payments made to entitled employees in 2025 was NIL (2024: NIL). The amount of cash paid to eligible employees is
based on the number of phantom shares that vest (determined over a three year performance period) times the quoted price of
Ordinary Shares of Mercedes-Benz Group AG (determined as an average price over a specified period at the end of the
four-year service). The number of phantom shares that vest will depend on the achievement of Mercedes-Benz Group AG
performance goals as compared with competitive and internal benchmarks (return on net assets and return on sales).
Mercedes-Benz Group AG will no longer issue any common shares in connection with the Performance Phantom Share Plan.
As at 31 December 2025, the carrying amount of the liability recognised for the entitlements granted is $0.930m (2024:
$1.057m).
The number of phantom shares on-issue by Mercedes-Benz Group AG to key management personnel of the Company as at 31
December 2025 was 20,715 (2024: 28,284).
50
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
21 PROVISIONS
Warranty
Legal
Other
Total
$'000
$'000
$'000
$'000
Balance at 1 January 2025
227,215
256
11,879
239,350
Provisions made during the year
106,805
275
11,976
119,056
Provisions used during the year
(111,125)
(459)
(10,544)
(122,128)
Provisions reversed during the year
-
(78)
-
(78)
6,356
11
59
6,426
Net unwind of discount
Balance at 31 December 2025
229,251
5
13,370
242,626
Current
98,151
5
13,370
111,526
131,100
-
-
131,100
Non-current
Total
229,251
5
13,370
242,626
Warranties
The Company issues various types of product warranties, under which it generally guarantees the performance of products
delivered and services rendered for a certain period. The provision for warranties relates primarily to vehicles sold during the
five years to 31 December 2025. The provision is based on estimates made from historical warranty data associated with similar
products and services. The provision for these warranties covers expected costs for contractual warranty claims as well as
expected costs for goodwill concessions and recall campaigns. The Company expects to pay out the liability over the next five
years. During the year, $95.308 million was recognised as an expense in cost of sales (2024: $67.245 million).
Some claims are recoverable from the parent company, the provision represents the full amount and the corresponding
receivable from the intermediate parent has been recognised.
Legal
The legal provision comprises costs for various legal proceedings, claims and governmental investigations which can lead to
lengthy and costly investigations, legal proceedings and/or penalties. Litigation and government investigations often involve
complex legal issues and are connected with a high degree of uncertainty. Accordingly, the assessment of whether an obligation
exists on the reporting date as a result of an event in the past, and whether a future cash outflow is likely and the obligation can
be reliably estimated largely depends on the estimations by management. The Company regularly evaluates the current stage
of legal proceedings, also with the involvement of in-house and external legal counsel. The provisions for litigations will as such
be reassessed periodically and adjusted based on the evaluations made by management.
Other provisions
Other provisions as at 31 December 2025 include $10.9 million of sales expense provisions to cover the estimated outstanding
variable future payments to Agents in connection to the sale of new vehicles. Other provisions are calculated based on
assessments by management of the likely future costs to be incurred in relation to the past event giving rise to the other
provisions.
51
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
22 DEFERRED INCOME
2025
2024
Notes
$'000
$'000
Current
Deferred income attributable to other related entities
31(d)
1,299
1,071
56
43
Other deferred income
1,355
1,114
Non-current
Deferred income attributable to other related entities
31(d)
893
913
Other deferred income
245
332
1,158
1,225
23 CAPITAL AND RESERVES
Share capital
2025
2024
$'000
$'000
Issued and paid-up share capital 35,000,000 fully paid ordinary shares of $2 par value each
(2023: 35,000,000 ordinary shares of $2 par value each)
70,000
70,000
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share
at shareholders’ meetings.
In the event of winding up of the Company, ordinary shareholders rank after creditors and are fully entitled to any proceeds of
liquidation.
Dividends
As the Company is a wholly-owned subsidiary in a tax-consolidated group, the franking credits reside with the provisional head
entity in the tax-consolidated group in accordance with the tax funding and sharing agreements.
Dividends totalling $117.320 million were declared and paid in December 2025 for the year ended 31 December 2024.
Cents per Total amount
Franked/
Date of
share
$'000
unfranked
payment
Final 2024 ordinary dividend
$335.20
$117,320
Franked
10.12.2025
24 NOTES TO THE STATEMENT OF CASHFLOWS
(a) Reconciliation of cash
For the purposes of the Statement of Cash Flows, cash includes cash on hand and at bank and short term deposits at call, net
of outstanding bank overdrafts. Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to
the related items in the statement of financial position as follows:
2025
2024
Notes
$'000
$'000
126,406
Cash and cash equivalents
12
93,915
(b) Reconciliation of cash flows from operating activities
52
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
24 NOTES TO THE STATEMENT OF CASHFLOWS (CONTINUED)
(b) Reconciliation of cash flows from operating activities (continued)
Profit for the period
65,695
117,320
Adjustments for
(Gain)/loss on sale of property, plant and equipment
6, 8(b)
-
157
Amortisation
-
24
Depreciation expenses
15
6,959
7,657
Impairment loss/(reversal)
8, 10
-
581
Foreign exchange (gains)/losses
10
(146)
194
Income tax expense (benefit)
11
22,735
(30,918)
Operating profit before changes in working capital
96,164
94,094
Change in assets and liabilities during the financial year
(Increase)/decrease in trade and other receivables
85,010
(134,853)
(Increase)/decrease in inventories
469,324
37,585
Increase/(decrease) in trade and other liabilities
(97,279)
(6,253)
Increase/(decrease) in provisions
2,651
40,783
31,356
Net cash/(used in) from operating activities
555,870
Net interest received/(paid)
1,489
(2,477)
Income taxes received/(paid)
12,789
(55,626)
Net cash inflow/(outflow) from operating activities
570,148
(26,747)
53
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
25 SEGMENT INFORMATION
The Company comprises the following main business segments:
•
Passenger
The importation, marketing and distribution of passenger motor vehicles and their components.
Cars:
•
Vans:
The importation, marketing and distribution of light commercial motor vehicles and their components.
•
Corporate
Includes functions and services not allocated to the business segments (Passenger Cars & Vans).
Items:
The principal activities of the Company are based in Australia.
Segment information is presented in respect of the Company’s business segments which are based on the Company’s
management and internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a
reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used
for more than one period.
Passenger cars
Vans
Corporate items
Total
2025
$'000
$'000
$'000
$'000
Revenue
2,447,645
386,990
-
2,834,635
14,225
1,628
-
15,853
Other income
Total revenue and other income
2,461,870
388,618
-
2,850,488
Gross Profit
312,877
99,968
-
412,845
Depreciation & amortisation
(6,898)
(61)
-
(6,959)
Reportable segment profit/(loss) before tax
78,724
16,701
(6,995)
88,430
Reportable segment assets
986,942
106,876
1,285,592
2,379,410
Reportable segment liabilities
512,434
70,645
1,070,911
1,653,990
Capital expenditure
(804)
-
-
(804)
Income tax (expense)/benefit
-
-
(22,735)
(22,735)
54
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
25 SEGMENT INFORMATION (CONTINUED)
Passenger cars
Vans Corporate items
Total
2024
$'000
$'000
$'000
$'000
Revenue
2,295,765
397,957
-
2,693,722
4,382
110
-
4,492
Other income
Total revenue and other income
2,300,147
398,067
-
2,698,214
Gross Profit
340,625
48,372
-
388,997
Depreciation & amortisation
(7,215)
(466)
-
(7,681)
Reportable segment profit/(loss) before tax
66,997
11,952
7,453
86,402
Reportable segment assets
1,328,805
216,677
1,332,446
2,877,928
Reportable segment liabilities
1,042,567
249,684
808,632
2,100,883
Capital expenditure
(1,372)
-
-
(1,372)
Income tax (expense)/benefit
-
-
30,918
30,918
26 LEASES
Leases as lessee
The Company leases a number of sites for the purposes of parts warehousing & training offices. The leases typically run for a
period of five years, with an option to renew the lease after that date. The leases do not include any contingent or variable
rental.
Leases of property generally provide the Company with the right of renewal at which time all terms are renegotiated.
Information about the leases for which the Company is a lessee is presented below.
(a) Amounts recognised in the statement of financial position
The statement of financial position shows the following amounts relating to leases:
2025
2024
$'000
$'000
Right-of-use assets*
Balance at January 1
7,313
4,519
(2,794)
Depreciation charge for the year
(2,336)
2,183
4,519
Balance at 31 December
Judgements and Estimates:
The application of AASB16 requires the Company to make judgements that affect the valuation of lease liabilities and the
valuation of right-of-use assets. These include determining the contracts in scope of AASB16, determining the contract term and
determining the interest rate used for discounting of future cash flows. The lease term determined by the Company comprises
non-cancellable period of lease contracts, periods covered by an option to extend the lease if the Company is reasonably
certain to exercise that option and periods covered by an option to terminate the lease if the Company is reasonably certain to
not exercise that option.
55
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
26 LEASES (CONTINUED)
(a) Amounts recognised in the statement of financial position (continued)
2025
2024
Notes
$'000
$'000
Lease liabilities
Current
18
2,358
2,416
Non-current
18
-
2,358
2,358
4,774
56
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
26 LEASES (CONTINUED)
(b) Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to operating lease:
2025
2024
$'000
$'000
Leases under AASB 16
Interest on lease liabilities
34
74
Depreciation charge of right-of-use assets
2,793
2,336
2,886
Expenses relating to leases of low-value assets (included in other expenses)
2,485
4,855
5,753
Total impact on profit or loss
(c) Amounts recognised in the statement of cash flows
The statement of cash flows shows the following amounts relating to leases:
2025
2024
$'000
$'000
Cash flow under AASB 16
Cash outflow from operating activities
(34)
(74)
Cash outflow from financing activities
(2,416)
(2,778)
(2,450)
(2,852)
Total cash outflow for leases
Leases as lessor
Operating lease transactions
Vehicles that are subject to operating leases between a related party, Mercedes-Benz Financial Services Australia Pty Ltd
(“MBFSAu”) and their external customers for passenger vehicles and light commercial vehicles, and where the Company has
agreed to provide residual value guarantees, are accounted for as Plant and equipment and presented in the Property, plant
and equipment note disclosure as "Assets subject to operating lease" and depreciated over a straight-line basis. Additions for
these plant & equipment are reflected as non-cash acquisitions as prior to the operating lease arrangements being entered into,
these vehicles have been purchased as inventory as part of the normal operating activities of the Company. Upon expiry of the
operating lease arrangements, these vehicles are transferred to inventory of the Company. These disposals are reflected as
non-cash disposals. These operating leases have an average term of three years.
Residual value guarantees for operating leases
The Company agreed to provide residual value guarantees to MBFSAu, for the operating leases entered into between MBFSAu
and their external customers described above.
The Company regularly reviews the factors determining the values of its leased vehicles. In particular, it is necessary to estimate
the residual values of vehicles at the end of their leases, which constitute a substantial part of the expected future cash flows
from leased assets. In this context, assumptions are made regarding major influencing factors, such as expected number of
returned vehicles, and the latest remarketing results. Those assumptions are determined either by qualified estimates (based on
external data) or publications provided by expert third parties.
Current and non-current liabilities for residual value guarantees have been recorded by the Company consistent with the
provision of the guarantees at the end of the lease terms.
Deferred income, representing the excess of the amount financed over the amount guaranteed, is recorded by the Company
and amortised over a straight line basis over the term of the leases.
(a) Amounts recognised in the statement of financial position
The statement of financial position shows the following amounts relating to leases:
57
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
26 LEASES (CONTINUED)
Leases as lessor (continued)
(a) Amounts recognised in the statement of financial position (continued)
2025
2024
$'000
$'000
Liabilities for residual value guarantee*
Current
51,992
39,060
3,673
Non-current
5,768
57,760
42,733
* Included in "Payable to other related entities" in Note 17.
2025
2024
$'000
$'000
Deferred income*
Current
1,299
1,071
913
893
Non-current
2,212
1,964
* Included in "Deferred income attributable to other related entities" in Note 22.
58
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
26 LEASES (CONTINUED)
Leases as lessor (continued)
(b) Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to operating lease:
2024
2025
$'000
$'000
Operating leases
Depreciation charge of assets subject to operating lease
1,918
3,109
Income attributable to operating leases
(2,550)
(2,288)
821
Total impact on profit or loss
(632)
27 CONTINGENCIES
(a)
The Company has arranged for its bankers to guarantee its obligation to third parties. The guarantee was terminated in
October 2025. The used portion of the guarantee in 2024 was $0.246 million, the maximum amount of the guarantee
available at the time. The Company has also arranged for its ultimate parent entity to guarantee its obligation to certain
customers to a maximum of $7.8 million (2024: $7.8 million). This facility is fully available and not used at the reporting
date (2024: nil).
(b)
The Company is involved in a number of legal actions relating to product liability and other contractual matters in the
ordinary course of business. These are being contested and where it is probable that a liability will arise, a provision
has been made in these accounts for estimated legal costs and settlements of potential claims.
(c)
In October 2021 a number of Australian Mercedes-Benz dealers lodged a claim against the Company with the Federal
Court of Australia. They alleged that the Company forced the dealers to accept a change in their business model from a
dealership model to an agency model and thus deprived them of the goodwill they created through their investments in
the Australian Mercedes-Benz dealership network. They sought reinstatement of the dealership model or, alternatively,
compensation for the damage they allegedly incurred. In August 2023, the Federal Court of Australia found in favour of
the company. In January 2024, certain dealers filed an appeal with the Full Court of the Federal Court of Australia. The
appeal was heard by the Full Court of the Federal Court of Australia in March 2025 and the court subsequently ruled in
favour of the Company, with costs. The dealer group then proceeded to file a Special Leave Application for the matter
to be heard before the High Court of Australia, which was rejected by the High Court, with costs in favour of the
Company. The Company is currently in the process of costs recovery.
28 PARENT ENTITY
As at, and throughout, the financial year ended 31 December 2025 the immediate parent entity of the Company is
Mercedes-Benz Group Australia/Pacific Pty Ltd, a company incorporated in Australia. The ultimate parent entity of the Company
is Mercedes-Benz Group AG. The immediate parent entity of Mercedes-Benz Group Australia/Pacific Pty Ltd is Mercedes-Benz
AG (incorporated in the Federal Republic of Germany) wholly owned by Mercedes-Benz Group AG. This entity is reported as
the intermediate parent entity of the Company.
29 ECONOMIC DEPENDENCY
The Company is economically dependent on the ultimate parent entity for the supply of passenger vehicle and light commercial
vehicle stock for resale and financial guarantees.
30 KEY MANAGEMENT PERSONNEL
The names of each person holding the position of director of the Company during the financial year are Mr. H. Becerra, Mr J.
Cohen, Mr S. Schmid, Mr S. McHutchon & Ms D. Tarr. Apart from the Company’s directors, the Company’s key management
personnel during the year include Mr P. Grogan, Director of Human Resources and Mr S. Trakilovic, General Counsel &
Company Secretary. For the period 10 September 2025 - 31 October 2025, Mr J. Nomikos acted as CEO.
In addition to their salaries, the Company provides non-cash benefits to key management personnel and share-based payment
benefits. The key management personnel compensation included in employee expenses (refer Note 7) are as follows:
59
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
30 KEY MANAGEMENT PERSONNEL (CONTINUED)
2025
2024
$
$
Short-term employee benefits
3,759,312
2,979,759
Other long-term benefits
21,980
22,373
Post-employment benefits
191,639
219,465
102,756
215,199
Share-based payments
4,075,687
3,436,796
31 OTHER RELATED PARTY TRANSACTIONS
The Company transacts with its ultimate parent entity, its intermediate parent entity, its immediate parent entity and other related
parties as disclosed below. All of the transactions are in the normal course of business and on normal terms and conditions.
(a) Transactions with ultimate parent entity
The aggregate amount due and receivable from and payable to the ultimate parent entity by the Company at reporting date:
2025
2024
Notes
$'000
$'000
Current assets
7,684
Trade and other receivables
13
7,629
Total current assets
7,629
7,684
Total assets
7,629
7,684
Current liabilities
Trade and other liabilities
17
4,344
1,945
Total current liabilities
4,344
1,945
1,945
Total liabilities
4,344
Net interest income/(expense)
10
529
1,480
Net guarantee fee expense
10
(876)
(1,704)
The ultimate parent entity provides guarantees on Euro Medium-Term Notes issued by Mercedes-Benz Australia/Pacific Pty Ltd.
The face value of these guarantees as at 31 December 2025 was $650 million (2024: $650 million and €60 million).
The ultimate parent entity also provides guarantees on Commercial Papers issued by Mercedes-Benz Australia/Pacific Pty Ltd.
The face value of these guarantees as at 31 December 2025 was nil (2024: $176 million).
(b) Transactions with intermediate parent entity
The aggregate amount due and receivable from and payable to the intermediate parent entity by the Company at reporting date:
2024
2025
Notes
$'000
$'000
Current assets
Trade and other receivables
13
28,837
27,500
27,500
Total current assets
28,837
Non-current assets
Trade and other receivables
13
21,620
27,500
Total non-current assets
21,620
27,500
Total assets
50,457
55,000
60
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
31 OTHER RELATED PARTY TRANSACTIONS (CONTINUED)
(b) Transactions with intermediate parent entity (continued)
2025
2024
Notes
$'000
$'000
Current liabilities
Trade and other liabilities
17
206,240
242,979
206,240
242,979
Total current liabilities
206,240
242,979
Total liabilities
Warranty recoveries
43,240
55,000
The Company also acquires inventory from the intermediate parent entity. The cost of inventory sold during the year that was
purchased from the intermediate parent entity totalled $1,425 million (2024: $1,637 million).
(c) Transactions with immediate parent entity
The aggregate amount due and receivable from and payable to the immediate parent entity by the Company at reporting date:
2024
2025
Notes
$'000
$'000
Current assets
Trade and other receivables
13
37,070
64,115
37,070
64,115
Total current assets
37,070
64,115
Total assets
Current liabilities
Trade and other liabilities
17
19,820
14,348
141,573
Loans and borrowings
18
141,573
Total current liabilities
161,393
155,921
Total liabilities
161,393
155,921
Net interest income/(expense)
10
(5,472)
(6,053)
Other income
6
92
82
The Company is a wholly-owned subsidiary in a tax-consolidated group with its immediate parent entity, Mercedes-Benz Group
Australia/Pacific Pty Ltd, as the provisional head entity. The Company, in conjunction with other members of the
tax-consolidated group, has entered into a tax funding agreement that sets out the funding obligations of members of the
tax-consolidated group in respect of tax amounts. The Company, in conjunction with other members of the tax-consolidated
group, has also entered into a tax funding and sharing agreement.
At 31 December 2025 the Company had an intercompany receivable of $18.86 million (2024: $50.25 million receivable) relating
to current tax receivable assumed by the provisional head entity of the tax consolidated group.
For further details regarding tax consolidation and the nature of the tax funding and sharing agreements, refer to accounting
policy Note 3 and Note 16.
61
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
31 OTHER RELATED PARTY TRANSACTIONS (CONTINUED)
(d) Transactions with other related parties
The aggregate amount due and receivable from and payable to other related parties by the Company at reporting date:
2025
2024
Notes
$'000
$'000
Current assets
Trade and other receivables
13
45,413
26,645
333,442
Loans due from other related entities
836,455
Total current assets
863,100
378,855
Non-current assets
Loans due from other related entities
13
199,606
648,076
199,606
648,076
Total non-current assets
1,062,706
1,026,931
Total assets
Current liabilities
Trade and other liabilities
17
63,542
84,940
Loans and borrowings
18
622
675
Deferred income
22
1,299
1,071
Total current liabilities
86,861
65,288
Non-current liabilities
Trade and other liabilities
17
5,768
3,673
Deferred income
22
913
893
4,566
Total non-current liabilities
6,681
69,854
Total liabilities
93,542
2024
2025
Notes
$'000
$'000
Net interest income
10
45,381
46,139
Net guarantee fee income
10
866
1,652
Other revenue
5
2,550
2,288
Other income
6
4,504
8,837
Depreciation on leased assets with related parties
15
(1,949)
(2,341)
Other related parties are deemed to be other companies within the ultimate parent's wholly owned group or under the significant
influence of the ultimate parent entity. The Company transacts with other related parties in the normal course of business
including the activities described further below.
The Company also acquires inventory from other related parties. The cost of inventory sold during the year that was purchased
from other related entities totalled $242 million (2024: $187 million).
The Company undertakes borrowings from external parties and on-lends the proceeds to other related parties. Interest is
charged to the related parties at rates consistent with bank rates in the countries of the currencies transacted.
The Company has agreed to provide residual value guarantees for operating leases entered into between Mercedes-Benz
Financial Services Australia Pty Ltd and their external customers. Rental income from these leases is recognised on a straight
line basis over the term of the lease. Lease income prepaid by Mercedes-Benz Financial Services Australia Pty Ltd is classified
as a financial liability, in deferred income and liabilities for residual value guarantees are recognised in trade and other liabilities.
Vehicles subject to operating leases where the Company has provided a residual value guarantee are accounted for by the
Company as plant and equipment and depreciated over a straight-line basis.
62
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2025
(continued)
31 OTHER RELATED PARTY TRANSACTIONS (CONTINUED)
(d) Transactions with other related parties (continued)
The Company has agreed to provide services to certain other related parties, income from these agreements is recognised on a
straight-line basis over the term of the agreement. The Company has also agreed to pay for services provided by external
parties that is shared between the Company and other related parties. Income from these agreements is recognised as other
income when the services are provided and are recharged to the other related parties.
32 EVENTS OCCURRING AFTER THE REPORTING PERIOD
There are no transactions or events of an unusual nature likely to affect significantly the operations of the business, the results
of those operations or the state of affairs of the Company in future financial years from the end of the financial year to the date
of this report.
63