July 26, 2024 – Mercedes-Benz Group AG achieved solid second-quarter results with Group Earnings Before Interest and Taxes (EBIT) of €4.0 billion (Q2 2023: €5.0 billion) supported by operational efficiency and a focus on healthy sales of cars and vans in a challenging environment.
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The adjusted Return on Sales (RoS) at Mercedes-Benz Cars reached 10.2% (Q2 2023: 13.5%) and 17.5% (Q2 2023: 15.5%) at Mercedes-Benz Vans. Group revenue reached €36.7 billion (Q2 2023: €38.2 billion) in the quarter.
Thanks to our desirable passenger cars and vans, Mercedes-Benz achieved double-digit margins in a challenging environment. Going forward, we continue to invest in cutting-edge products while fostering our financial resilience. Sales and the model mix are expected to improve in the second half of the year, supported by further market launches of new models particularly in the Top-End segment.
Ola Källenius
Chief Executive Officer of Mercedes-Benz Group AG
Investments, free cash flow, net liquidity
The free cash flow from the industrial business in the second quarter reached €1.6 billion (Q2 2023: €3.4 billion) due to the solid cash conversion rate at cars and vans. This was influenced by lower Earnings Before Interest and Taxes (EBIT) and headwinds in working capital development due to higher inventory levels ahead of the expected higher H2 sales. The net liquidity from the industrial business reached €28.0 billion (end of 2023: €31.7 billion) due to the dividend payment of €5.5 billion and cash outs for share buybacks of approximately €2.8 billion in the second quarter. Since the beginning of the buyback programmes in March 2023, the company has bought back shares for €5.1 billion as of end June 30, 2024. The Group’s investments in property, plant and equipment in the second quarter totalled €0.9 billion (Q2 2023: €0.8 billion). Research and development expenditure fell to €2.3 billion (Q2 2023: €2.4 billion).
Divisional results
Adjusted Earnings Before Interest and Taxes (EBIT) at Mercedes-Benz Cars reached €2.8 billion (Q2 2023: €3.8 billion) on lower sales volumes but resulted in an adjusted Return on Sales (RoS) of 10.2%, up from 9.0% in the first quarter, (Q2 2023: 13.5%) due to a focus on sales quality in a challenging environment and due to favourable material costs. Mercedes-Benz Cars unit sales reached 496,712 units in the second quarter, a plus of 7% compared to the first quarter due to improved product availability in China and the United States. Top-End Q2 sales increased by 6% compared to Q1, but remain below year-earlier levels, mainly due to model changeovers and a subdued market environment in Asia. The availability of Top-End models continues to improve with the all-new electric G-Class¹ launched. Sales of the AMG CLE53, AMG E53 and AMG GLC43 models started in the second quarter. Furthermore, the Mercedes-Benz S-Class remains the undisputed market leader in its segment in all major markets. Sales in the Core segment rose by 8% in Q2 compared to previous quarter mainly driven by the E-Class and GLC, the latter of which has retained its status as the top-selling model.
The adjusted Return on Sales (RoS) for Mercedes-Benz Vans rose to 17.5% (Q2 2023: 15.5%). The lower unit sales were outweighed by healthy net pricing, and a favourable structure, as well as favourable material costs and positive foreign exchange effects. Adjusted Earnings Before Interest and Taxes (EBIT) increased by 5% to €834 million (Q2 2023: €792 million). Mercedes-Benz Vans global sales reached 103,435 units in the second quarter maintaining sales at the same level as in the first quarter (-2% compared to Q1). Thus, the division achieved a strong first half-year in 2024, with Q2 influenced by model changes both in the private and commercial segment of midsize and large vans and a phased ramp up of the eSprinter.
The portfolio of Mercedes-Benz Mobility shows an increasing share of xEV vehicles (battery electric vehicles and plug-in hybrid vehicles) in the second quarter of 2024. As a result, more than every second electric vehicle is now leased or financed by Mercedes-Benz Mobility. Overall, the total portfolio amounted to €135.7 billion at the end of June 2024 and is thus at the same level as year-end 2023 (FY 2023: €135.0 billion). At €14.1 billion, the new business of Mercedes-Benz Mobility is below prior-year level (Q2 2023: €15.4 billion). The adjusted Earnings Before Interest and Taxes (EBIT) decreased to €271 million mainly driven by a lower interest margin and higher cost of credit risk (Q2 2023: €448 million). As a result, the adjusted Return on Equity (RoE) decreased to 8.4% (Q2 2023: 12.8%).
Transformation
Battery development capacity was strengthened with a new competence centre for the development of cells and batteries, the so-called eCampus designed to develop innovative chemical compositions and optimised production processes for high-performance cells with “Mercedes-Benz DNA”. Furthermore, Mercedes-Benz made progress with rolling out its Automatic Lane Change function² in Europe. Mercedes-Benz Auto Finance Ltd. (MBAFC), part of the Mercedes-Benz Mobility division, successfully issued its first Green Auto Loan Asset-Backed-Security (ABS) in July 2024 in the Chinese Interbank Bond Market. It is Mercedes-Benz’s first Green ABS worldwide and Mercedes-Benz is the first foreign automotive company to issue a Green Asset-Backed-Security in China.
This page contains forward-looking statements.
¹Mercedes-Benz G 580 with EQ Technology | energy consumption combined: 30.3-27.7 kWh/100 km | CO₂ emissions combined: 0 g/km | CO₂ class: A. The specified values were determined in accordance with the WLTP (Worldwide harmonised Light vehicles Test Procedure) measurement method. The ranges given refer to ECE markets. The energy consumption and CO₂ emissions of a car depend not only on the efficient utilisation of the fuel or energy source by the car, but also on the driving style and other non-technical factors.
²MBUX Navigation is a prerequisite. The driving assistance and safety systems from Mercedes-Benz are merely aids, and do not relieve the driver of responsibility. The driver must observe the information in the Owner's Manual and the system limitations described therein.
