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Mercedes-Benz delivers full year results focusing on high-end passenger cars and premium vans

Autor: Financial Market
2 min

Mercedes-Benz Group AG’s sharpened focus on high-end passenger cars and premium vans, combined with tight cost control, helped to lift Earnings Before Interest and Taxes (EBIT) by 28% to €20.5 billion (2021: €16.0 billion) last year, outpacing a 12% rise in revenue to €150.0 billion (2021: €133.9 billion) during the same period.

In its first year after the Daimler Truck spin-off, Mercedes-Benz Group continued its transformation and delivered strong results and improved profitability, even as the semiconductor supply-chain bottlenecks continued to affect the business.

Mercedes-Benz expanded its offering of battery electric vehicles to 9 cars and 4 vans, including the new EQS SUV and EQE SUV and most recently unveiled a new eSprinter.

Investors reacted well to the publication of Q4 2022 results, Mercedes-Benz shares (+2.8%) are currently leading the gains among companies listed on German stock exchange.

The company’s full-year net profit was up 34% and sales revenue was up 12% in the face of strong demand for Mercedes’ most expensive models and electric cars.

The brand’s most expensive passenger cars and vans are characterized by generating the highest margins among the entire available Mercedes-Benz fleet, the company added.

To scale manufacturing of zero-emission vehicles, the Mercedes-Benz cars and vans production network was retooled, and new deals with suppliers were struck.

Mercedes-Benz will source battery cells from a new factory built by Contemporary Amperex Technology Co., Ltd (CATL) in Debrecen, Hungary. An annual supply agreement for an average 10,000 tonnes of lithium hydroxide from Canadian-German start-up Rock Tech Lithium Inc. was signed.

In addition, Mercedes-Benz announced plans to launch a global high-power charging network across North America, Europe, China and other key markets.

The free cash flow of the industrial business rose to €8.1 billion (2021: €7.9 billion) and net liquidity up to €26.6 billion (end of 2021: €21.0 billion).

The Group’s investments in property, plant and equipment in the full year totaled €3.5 billion (2021: €4.6 billion) and research & development expenditure amounted to €8.5 billion (2021: €9.1 billion).

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FY 2022 figures. Source Mercedes-Benz

At the Annual General Meeting on May 3, 2023, the Board of Management and the Supervisory Board will propose a dividend of €5.20 per share (2021: €5.00). For 2022 the total payout would amount to €5.6 billion (2021: €5.35 billion).

Also, Mercedes-Benz announced a share buyback to repurchase own shares worth up to € 4 billion on the stock exchange over a period of up to two years and be cancelled.

On the back of strong operating performance and continued strong cash generation, the programme is scheduled to start in March 2023. The buyback will be funded by Mercedes-Benz’s expected future excess free cash flow.

Outlook 2023

The group expects revenue in 2023 to remain at the prior-year level and EBIT to be slightly below the previous year’s level based on the development of the segments.

Free Cash Flow of the industrial business at the previous year’s level in 2023 on higher tax payments expected than in the previous year.

Overall demand: In Europe, incoming orders are more sluggish, however the order bank supports sales into the first half of the year. In the United States, demand is seen on a good level. In China, the fourth-quarter COVID-19 effect has led to a spill over impact on sentiment in the first quarter. Momentum is seen returning post Chinese New Year, preliminary indications show.