Mercedes-Benz Group (MBG) Q4 2025 (Q&A) earnings summary

Executive summary

• Management reaffirmed a focus on profitable growth, balancing volume ambitions with margin discipline, as new electric and combustion models launch in key markets through 2026 and 2027.

• 2025 results were within expectations and guidance, with revenues of €132.2 billion and adjusted EBIT of €8.2 billion, despite global tariffs, FX headwinds, and competition in China, mitigated by over €3.5 billion in cost savings at Mercedes-Benz Cars.

• Free cash flow from the industrial business was €5.4 billion, and total shareholder return exceeded 20% for the year.

• Major product launches included the all-new CLA, GLB, and GLC, with strong market feedback and high demand, driving a sequential uplift in BEV volumes.

• Top-End vehicles reached 15% of overall Mercedes-Benz Cars sales, and the company accelerated its product and tech launch program.

Financial highlights

• Tariff impacts are significant, with a €1 billion hit in 2025 expected to increase in 2026 due to full-year effects.

• Group revenue declined 9.2% year-over-year to €132.2 billion; adjusted EBIT fell 39.9% to €8.2 billion.

• Net profit dropped 48.8% to €5.3 billion; free cash flow from industrial business decreased 40.8% to €5.4 billion.

• Underlying industrial cash flow is expected to exceed €4 billion, with additional M&A inflows potentially above €2 billion.

• Earnings per share fell 47.6% to €5.34.

Outlook and guidance

• 2026 margin guidance is 3-5%, with the lower end exposed to China market risks and the upper end dependent on commodity and FX tailwinds.

• 2026 revenue expected at prior-year level; Group EBIT seen significantly above 2025 due to prior-year restructuring charges.

• Free cash flow of the industrial business expected slightly below 2025; adjusted RoS guidance for Cars at 3-5%, Vans at 8-10%, and Financial Services ROE at 10-12%.

• Medium-term targets include ~2 million Cars sales, >15% increase in Top-End sales, and doubling xEV share.

• U.S. sales ambition is to reach 400,000 units midterm, supported by localization and new technology partnerships.