German automaker Mercedes-Benz joined the ranks of EU-based automakers releasing their Q1 2024 financial reports, showcasing robust profits amid shifting market trends.
Remaining a stalwart in luxury vehicles, Mercedes-Benz has been steadily expanding its electric vehicle (EV) lineup, including the revamped EQS sedan for 2025 and the recent unveiling of the all-electric “G580 with EQ technology,” a nod to the iconic G Class.
While the Q1 2024 report revealed a slight drop in revenues, with earnings before interest and tax (EBIT) at €3.86 billion ($4.18 billion), down 30% from Q1 2023, Mercedes-Benz Cars’ EBIT reported €2.5 billion compared to €4.1 billion in Q1 2023. Adjusted Return on Sales also saw a decline, settling at 9.0% from 14.8% in Q1 2023.
Explaining the dip, Mercedes-Benz attributed it to a temporary decline in volumes and model transitions in its Top-End segment, along with increased lifecycle management costs to maintain product competitiveness.
Despite the earnings decrease, Mercedes-Benz remained buoyant, with strong free cash flow and net liquidity. The Free Cash Flow from the Industrial Business reached €2.23 billion, supported by an adjusted Cash Conversion rate of 1.0. Net Liquidity from the Industrial Business rose by 6% to €33.6 billion, including a share buyback of approximately €300 million in the first quarter.
Mercedes-Benz emphasized its commitment to maintaining pricing integrity, avoiding discount wars in the market. It anticipates its top-end models to drive sales and help achieve its financial targets for the year.
In terms of EV sales, both BEV and PHEV numbers were down year over year (-2% and -8%, respectively), but the overall share of EV sales in Mercedes’ portfolio increased to 19.5% from 18.2% a year ago. Notably, PHEV sales were the main contributors to this growth.
Harald Wilhelm, Member of the Board of Management of Mercedes-Benz Group AG, Finance & Controlling/Mercedes-Benz Mobility, expressed confidence in the company’s performance, stating, “Mercedes-Benz delivered a solid Free Cash Flow in the first quarter thanks to our disciplined go-to-market approach, our desirable products and despite the volatile economic environment and external challenges. While we remain vigilant about the global macroeconomic and geopolitical outlook, we confirm our full-year financial targets for 2024.”
