Listen to the audio version of the article
Mercedes-Benz closed 2023 with a net profit of 14.53 billion euros, down 1.9% compared to 2022. Revenues instead rose 2.1% to 153.318 billion euros. Ebit fell by 3.9% to 19.66 billion euros, with adjusted Ebit standing at 20.004 billion (-3.2%). The free cash flow of the industrial business reached 11.3 billion euros (+39.2% from 8.1 billion euros in 2022), mainly thanks to the still high profitability, the high liquidity conversion rate and the lower working capital. The net liquidity of the industrial sector rose to 31.7 billion euros (from 26.6 billion at the end of 2022). The EPS stood at 13.46 euros (-0.7%).
Dividend up and buybacks up to 3 billion
Regarding the fourth quarter of 2023, Mercedes-Benz Group recorded revenues decreasing by 1.8% to 40.261 billion euros, an Ebit of 4.326 billion (-20.1%) and a net profit of 3.16 billion (-21.5%), with EPS of 2.99 euros (-19.7%).
At the shareholders’ meeting on May 8th, the board of directors will propose the distribution of a dividend of 5.30 euros per share (up from 5.20 euros last year). Furthermore, the group announces a further share buyback program for a maximum value of 3 billion euros. For 2024, group revenues are expected to be at the 2023 level, group Ebit is expected to be slightly below the 2023 level and Industrial Sector Free Cash Flow is also expected to be slightly below the 2023 level.
Decreasing demand for cars on tap
At its annual conference in Stuttgart, Mercedes-Benz warned that electric vehicles will remain more expensive than their internal combustion engine cousins for a long time to come, as the luxury car maker prepares for a cooling demand for cars on tap, concentrated above all in the medium-small segments, where the three-pointed star is not so present.
The German premium carmaker actually forecast a reduction in profits this year, citing challenges posed by the slowing economy. This is an “exceptional” uncertainty caused by conflicts in the Middle East and Ukraine and by tensions between China and the United States. Supply chain bottlenecks for critical components remain “a significant risk factor”, while the potential for an “even more pronounced” slowdown in economic growth could impact automotive markets.