Mercedes-Benz Group (MBG) Investor presentation summary

Q2 2022 performance

• Revenue €36.4bn, up 7% YoY; EBIT €4.6bn, up 6%; adjusted EBIT €4.9bn, up 8%.

• Industrial free cash flow €1.4bn, down 34% YoY; net industrial liquidity €19.1bn at June 30, 2022, versus €21.0bn at Dec. 31, 2021.

• Cars sales fell 7% to 487,100; revenue rose 8% to €27.0bn; adjusted EBIT increased 20% to €3.8bn and adjusted CFBIT rose 18% to €2.9bn.

• Vans sales increased 2% to 100,100 and revenue rose 12% to €4.1bn; adjusted EBIT was €414m, down 1%, while adjusted CFBIT rose 11% to €333m.

• Mobility new business fell 18% to €14.1bn; contract volume rose 1% to €135.0bn; adjusted EBIT declined 33% to €624m.

2022 outlook and operating conditions

• FY guidance: Cars and Vans unit sales slightly above prior year; adjusted Cars return on sales 12–14%, Vans 8–10%; Mobility ROE 16–18%.

• Adjusted cash conversion rate guidance: Cars 0.8–1.0 and Vans 0.6–0.8; Cars and Vans investment in property, plant and equipment and R&D expenditure guided significantly above prior year.

• Group revenue guided significantly above prior year, EBIT slightly above, and industrial free cash flow and European new-car-fleet CO2 emissions at prior-year levels.

• Outlook risks include the Ukraine war, energy and raw-material prices, inflation, higher interest rates, supply-chain bottlenecks and the pandemic’s course, particularly in China.

• Gas supply at European plants was stable; consumption-reduction measures were underway, with further reduction potential identified and a long-term shift toward electricity and renewable resources planned.

Cars strategy and profitability

• Strategy prioritizes pricing power, a more focused portfolio, top-end growth and exiting lower-margin products and channels to raise average selling prices and strengthen profitability.

• Portfolio plans refocus Entry Luxury from seven body styles to four; Core Luxury transitions to electric models; Top-End Luxury targets ~60% growth in segment share of sales by 2026 vs. 2019.

• 75% of capital allocation is directed to Top-End and Core segments; capacity utilization and investment in EV capabilities and supply chains are intended to improve returns on invested capital.

• 2025 Cars ambition includes adjusted return on sales of ~14% under a higher-mix, strong-pricing scenario; fixed costs, CAPEX and R&D are targeted more than 20% below 2019.

• Cash-flow initiatives target lower working capital and inventories, stronger cash-flow visibility and broader employee ownership of cash discipline.