Mercedes-Benz Group (MBG) Q4 2023 (Q&A) earnings summary

Executive summary

• FY 2023 revenue rose 2% to €153.2B; EBIT was €19.7B vs. €20.5B in 2022 amid supply-chain costs and macroeconomic volatility.

• Industrial business free cash flow increased 39% to €11.3B; net industrial liquidity rose 19% to €31.7B.

• Cars, Vans and Mobility posted adjusted returns of 12.6% RoS, 15.1% RoS and 12.3% RoE, respectively.

Financial highlights

• Q4 2023 revenue was €40.3B, down 1.8% YoY; EBIT was €4.3B, down 20.1%, and adjusted EBIT was €4.5B, down 12.1%.

• Q4 net profit fell 21.5% to €3.2B; EPS declined 19.7% to €2.99. Industrial free cash flow rose 38.8% to €3.4B.

• FY net profit was €14.5B, down 1.9%; EPS was €13.46 vs. €13.55 in 2022.

• FY R&D expenditure increased to €10.0B from €8.5B; property, plant and equipment investment totaled €3.7B vs. €3.5B.

Outlook and guidance

• 2024 revenue is expected at the prior-year level; EBIT and industrial free cash flow are expected slightly below 2023.

• Cars unit sales are expected at the prior-year level; adjusted RoS guidance is 10%–12%, with xEV share at 19%–21%. Q1 sales are expected below prior year.

• Vans sales are expected slightly lower in 2024, with a strong Q1; adjusted RoS guidance is 12%–14% and xEV share 6%–8%.

• Mobility portfolio volume is expected at the 2023 level with slightly positive new business; adjusted RoE guidance is 10%–12%. Q1 margin is expected below the full-year corridor.

• Cars adjusted cash conversion rate guidance is 0.8–1.0; Vans guidance is 0.6–0.8. Vans R&D and capital spending are expected significantly above 2023, driven by VAN.EA.