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HomeNewsA-BrandsIn 2022, Mercedes-Benz posts impressive full-year financial achievements.

In 2022, Mercedes-Benz posts impressive full-year financial achievements.

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In 2022, Mercedes-Benz posts impressive full-year financial achievements.

 

  • Growth that is profitable: Group EBIT increased significantly by 28% to €20.5 billion (2021: €16.0 billion) as revenue rose by 12% to €150.0 billion (2021: €133.9 billion).
  • Notwithstanding macro problems, Mercedes-Benz Cars adjusted Return on Sales (RoS) achieves 14.6% (2021: 13.1%), Mercedes-Benz Vans adjusted Return on Equity (RoE) reaches 11.2% (2021: 8.3%), and Mercedes-Benz Mobility adjusted Return on Equity (RoE) reaches 16.8% (2021: 22.0%).
  • Transformation keeps going: Global charging network announced, production network repositioned to scale EVs, Nevada approves Level 3 conditionally automated driving, and new collaborations for semiconductor and raw material sourcing created.
  • Increased dividend: €5.20 proposed (2021: €5.00).
  • Share buyback: Up to €4 billion worth of shares will be bought back over a two-year period.
  • Outlook 2023: Group revenue is anticipated to be at prior-year levels, EBIT is projected to be slightly below 2022 levels, and Free Cash Flow (Industrial Business) is projected to be at prior-year levels. Mercedes-Benz Cars’ adjusted RoS is anticipated to be in the range of 12%-14%, Mercedes-Benz Vans’ adjusted RoS is projected to be at 9%-11%, and Mercedes-Benz Mobility’s adjusted RoE is anticipated to be at 12%-14%.

 

Earnings Before Interest and Taxes (EBIT) increased by 28% to €20.5 billion (2021: €16.0 billion) last year, outpacing a 12% increase in revenue to €150.0 billion (2021: €133.9 billion) during the same period thanks to Mercedes-Benz Group AG’s (ticker symbol: MBG) sharpened focus on high-end passenger cars and premium vans as well as strict cost control.

 

Notwithstanding geopolitical and economical difficulties, the Mercedes-Benz Group maintained its transformation in the first year following the Daimler Truck spin-off. Even though the COVID-19 pandemic, semiconductor supply-chain delays, and the effects of Russia’s war against Ukraine continued to have an impact on the business, strong results highlight the increased profitability.

 

Because to our emphasis on appealing products, strict cost and margin management, and concentration on margin expansion, we have reinvented Mercedes-Benz to be a more profitable corporation. Ola Kaellenius, CEO of Mercedes-Benz Group AG, said, “We cannot control macro- or global circumstances, but 2022 is a case in point that we are moving in the correct route.

“The team accelerated our pace as a technical leader in electric and autonomous driving, in addition to generating great financial outcomes. The Mercedes-Benz Strategy Update, which will focus on the Mercedes-Benz Operating System (MB.OS) on February 22, will disclose the next chapter in our transition.

 

Mercedes-Benz Group*Q4 2022Q4 2021Change 22/21FY 2022FY 2021Change 22/21
Revenue**41,00335,240+16%150,017133,893+12%
EBIT**5,4114,115+31%20,45816,028+28%
EBIT adjusted**5,0715,044+1%20,65517,158+20%
Net profit/loss**4,0272,477+63%14,80911,050+34%
Free cash flow (industrial business)**2,4791,421+74%8,1287,880+3%
Free cash flow (industrial business) adjusted**2,7061,615+68%9,29410,125-8%
Earnings per share (EPS) in EUR3.722.24+66%13.5510.00+35%
*  from continuing operations

** in millions of €

 

Faster transformation

Mercedes-Benz increased the number of battery-electric vehicles it offers to nine cars and four vans, including the new EQS and EQE SUVs. Most recently, a new eSprinter was also presented. The production network for Mercedes-Benz automobiles and vans was retooled, and new agreements with suppliers were made in order to scale up production of zero-emission vehicles. Mercedes-Benz will purchase battery cells from a new facility being developed in Debrecen, Hungary, by Contemporary Amperex Technologies Co., Ltd (CATL). A contract was inked with Canadian-German startup Rock Tech Lithium Inc. for an annual supply of 10,000 tonnes of lithium hydroxide on average. Mercedes-Benz also disclosed plans to roll up a global high-power charging network covering China, Europe, North America, and other important markets.

 

Free cash flow, investments, and liquidity

The industrial business’ free cash flow increased to €8.1 billion (from €7.9 billion in 2021). The industrial business’s net liquidity increased to €26.6 billion from €21.0 billion at the end of 2021. The Group invested a total of €3.5 billion on property, plant, and equipment for the entire year (2021: €4.6 billion*). Spending on research and development came to €8.5 billion (2021: €9.1 billion*).

 

*Daimler’s commercial vehicle division will be included in 2021 up until the spin-off and hive-down.

 

Divisional outcomes

Mercedes-Benz Cars sold 2,040,719 automobiles (+5%) in a difficult macroeconomic situation. According to the focus on EVs plan, Mercedes-Benz had robust BEV sales of 149,227 units, including smart (+67%). With more than 23,400 vehicles sold, the S-Class (+6%) and its all-electric EQS version drove an 8% increase in Top-End segment sales. This all-electric flagship’s highest sales quarter was in the fourth quarter. Moreover, Mercedes-Maybach had a record-breaking year with sales up 41%. Sales in the Core segment increased by 9% as a result of the strong sales of the C-Class, the best-selling GLC, and the new EQE. Mercedes-Benz Cars’ adjusted Return on Sales (RoS) increased from 13.1% to 14.6% in the prior-year period.

 

The fourth quarter saw some small headwinds and an adjusted Return on Sales of a still high 13.4% due to deliberate decisions to pay just certain suppliers and the impact of the so-called “inflation bonus” for qualified employees in Germany.

 

Mercedes-Benz CarsQ4 2022Q4 2021Change 22/21FY 2022FY 2021Change 22/21
Sales in units536,181500,421+7%2,040,7191,943,930+5%
thereof xEV111,04689,161+25%333,490271,847+23%
-thereof BEV53,53931,676+69%149,22789,571+67%
Revenue*30,55725,380+20%111,60196,712+15%
EBIT*4,2433,838+11%16,34012,487+31%
EBIT adjusted*4,0883,988+3%16,24512,689+28%
Return on Sales (RoS) in %13.915.1-1.2%pts14.612.9+1.7%pts
Return on Sales (RoS) adjusted in %13.415.7-2.3%pts14.613.1+1.5%pts
Cash Flow Before Interest and Tax (CFBIT)*3,1041,533+102%10,7189,344+15%
Cash Flow Before Interest and Tax (CFBIT) adjusted*3,2331,646+96%11,41310,714+7%
Cash Conversion Rate adjusted0.80.40.70.8
*in millions of €

 

Notwithstanding persistent global challenges in the areas of logistics and components supply, Mercedes-Benz Vans’ full-year unit sales reached 415,344 cars globally (+8%) as a result of a diverse lineup of commercial and private vans. 15,000 eVans were sold in the year under review (+15%), with almost two thirds of those being commercial eVans. Mercedes-Benz Vans’ adjusted Return on Sales (RoS) increased from 8.3% in 2021 to 11.2% in 2018. In order to make the complete product range fully electric, the all-electric small vans eCitan and EQT [power consumption combined (WLTP): 18.99 kWh/100 km; combined CO2 emissions (WLTP): 0 g/km] were introduced in 2022. The eSprinter made its world premiere a few days ago.

 

Mercedes-Benz VansQ4 2022Q4 2021Change 22/21FY 2022FY 2021Change 22/21
Sales in units122,733111,499+10%415,344386,239+8%
Revenue*5,1144,122+24%17,21714,735+17%
EBIT*670256+162%1,8971,143+66%
EBIT adjusted*501294+70%1,9271,229+57%
Return on Sales (RoS) in %13.16.2+6.9%pts11.07.8+3.2%pts
Return on Sales (RoS) adjusted in %9.87.1+2.7%pts11.28.3+2.9%pts
Cash Flow Before Interest and Tax (CFBIT)*665519+28%1,731826+110%
Cash Flow Before Interest and Tax (CFBIT) adjusted*741592+25%2,0401,581+29%
Cash Conversion Rate adjusted1.52.01.11.3
*in millions of €

 

Mercedes-Benz Mobility witnessed a decrease in new business to €58.0 billion (down from €63.6 billion in 2021). Prior to the spin-off of the Daimler commercial vehicle division, the prior-year figure still included new business from Daimler Trucks & Buses. The contract volume was €132.4 billion at the end of 2022, matching the amount from the previous year ($133.7 billion at the end of 2021). Mercedes-Benz Mobility was able to significantly boost its contract volume for financed and leased electric and hybrid vehicles compared to the end of last year. Overall, adjusted EBIT fell to €2.4 billion in 2022 (down from €3.4 billion in 2021), led by greater credit risk costs brought on by a gloomier prognosis for the economy, higher refinancing costs, and reduced volumes as a result of the Daimler Truck spin-off. As a result, adjusted Return on Equity (RoE) was 16.8%, below the level from the previous year (2021: 22.0%).

 

Mercedes-Benz MobilityQ4 2022Q4 2021Change 22/21FY 2022FY 2021Change 22/21
Revenue*6,8587,246-5%26,95427,941-4%
New business*15,12115,043+1%58,03163,631-9%
Contract volume (December, 31)*132,379133,687-1%132,379133,687-1%
EBIT*494882-44%2,4283,493-30%
EBIT adjusted*494885-44%2,4283,449-30%
Return on Equity (RoE) in %14.021.6-7.6%pts16.822.3-5.5%pts
Return on Equity (RoE) adjusted in %14.021.7-7.7%pts16.822.0-5.2%pts
*in millions of €

 

Dividends and stock repurchases

The Board of Management and Supervisory Board will recommend a dividend of €5.20 per share (2021: €5.00) at the Annual General Meeting on May 3, 2023. The total payout for 2022 would be €5.6 billion ($5.35 billion in 2021).

 

Mercedes-Benz announced a share buyback to repurchase own shares for up to € 4 billion (not including incidental charges) on the stock exchange over a period of up to two years in order to optimise the company’s capital structure and to create value for shareholders. The shares that were bought back will thereafter be cancelled. The initiative is set to begin in March 2023 as a result of solid operating results and ongoing robust cash generation. The buyback is completely consistent with Mercedes-strategic Benz’s aims and dividend policy and will be financed by the company’s anticipated future excess free cash flow. Mercedes-Benz continues to be dedicated to maintaining a solid investment grade credit rating and strives for an A rating from the major agencies. Before the programme begins, more information on the share repurchase programme will be released separately.

Outlook

Regarding geopolitical and macroeconomic issues like the war in Ukraine, the growth of trade between China, the European Union, and the United States, as well as the path of the COVID-19 epidemic, the global economy faces an exceptionally high level of uncertainty. This could have an effect on supply chains and the rise of raw material and energy prices. The prognosis is further made more challenging by ongoing consumer and business inflationary pressure, accompanying central bank interest rate rises, and a more marked slowdown in economic development. While the global semiconductor deficit is improving, local problems continue to limit supply.

 

Demand overall: Although the order bank supports sales during the first part of the year, incoming orders are more slow in Europe. The demand situation is good in the United States. The COVID-19 effect from the fourth quarter in China had a knock-on effect on sentiment in the first quarter. Following the Chinese New Year, momentum is anticipated to pick up.

 

Sales forecast: The company is taking a cautious approach and anticipates Mercedes-Benz Vehicle unit sales to be at the same level as last year. Thanks to new additions to the portfolio, such as the new EQS SUV and eventually the Mercedes-Maybach EQS SUV, overall Top-End vehicle sales are anticipated to be somewhat higher than last year. It is anticipated that battery electric vehicle (BEV) sales will roughly double. The estimated range for the adjusted Return on Sales (RoS) is 12% to 14%. It is anticipated that net price will modestly increase. It is intended to cover inflation-related cost increases, supply-chain disruptions, and one-time commodity costs, according to current projections. The used car market is anticipated to be somewhat down from 2022. Spending on research and development is anticipated to increase somewhat from the previous year. The MMA platform is mostly to blame for the large increase in investments in property, plant, and equipment.

 

Sales of Mercedes-Benz Vans are expected to remain steady overall, and the adjusted RoS is expected to be between 9% and 11%. Net price is anticipated to stay constant. It is intended to cover inflation-related cost increases, supply-chain disruptions, and one-time commodity costs, according to current projections. Due to expenditures made in the VAN.EA electric platform, spending on real estate, facilities, and equipment as well as R&D is much more than it was the previous year.

 

Mercedes-Benz Mobility’s portfolio volume is observed to be a little lower. For 2023, it is predicted that the adjusted Return on Equity will be between 12% and 14%. The latest charging network’s operational expense (OpEx) increases are included in this.

 

The Mercedes-Benz Group anticipates that its revenue in 2023 will be unchanged from that of the previous year. Based on the progress of the segments, the Group anticipates EBIT to be somewhat below the level of the prior year in a market climate that is still difficult. The Mercedes-Benz Group anticipates that in 2023, the industrial business’ Free Cash Flow will remain flat compared to last year. Tax payments are anticipated to be higher than they were last year.

 

The Mercedes-Benz Group anticipates a large decrease in 2023 compared to 2022 in the average CO2 fleet of new passenger cars in Europe (European Union, Norway, and Iceland). The CO2 limits in Europe will likely be met in 2023 with the continued fleet expansion of electric vehicles.

 

Press release “Sales numbers 2022” hyperlink:

Group-Media.Mercedes-Benz.com/Annual Sales/Cars Mercedes-Benz

Group-Media.Mercedes-Benz.com/Annual Sales/Vans Mercedes-Benz Vans

group.mercedes-benz.com/results-2022 is the URL for the capital market presentation for the entire year 2022.

 

You may view photos from the Annual Results Conference 2022 at group-media.mercedes-benz.com.

 

GSN

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