Mercedes-Benz reports €145.6bn revenue in 2024 and EBIT falls 30.8%

Overview

Mercedes-Benz reported a challenging FY2024, with revenue declining to €145.6bn and EBIT dropping to €13.6bn, impacted by lower sales volumes, pricing pressure, and a slowdown in China. Net profit fell -28.4% YoY as demand for high-margin models softened, while free cash flow remained strong at €9.2bn, supported by cash conversion efforts. BEV sales declined 23.1% YoY, reflecting slower-than-expected demand and increased competition, while xEV sales reached 18.5% of total volume.

CEO Ola Kaellenius stated: “Mercedes-Benz Group delivered solid results in a very challenging environment thanks to a range of outstanding products and strict cost discipline. To ensure the company’s future competitiveness in an increasingly uncertain world, we are taking steps to make the company leaner, faster and stronger, while readying an intense product launch campaign for multiple new vehicles starting with the all new CLA.”

Full-Year 2024 highlights:

• Group revenue decreased to €145.6bn (-4.5% YoY), reflecting lower volumes and pricing pressure, particularly in China.
  • Mercedes-Benz Cars revenue recorded a value of €107.8bn (-4.4% YoY), impacted by lower sales volumes and a weaker model mix. Unit sales was 1.98m (-3% YoY), with xEV sales at 18.5% of total, while BEV sales was 185,059 units (-23.1% YoY), as demand lagged expectations due to competitive pressures.
  • Mercedes-Benz Vans revenue was €19.3bn (-4.8% YoY), reflecting lower overall sales. Unit sales declined also to 405,610 (-9.4% YoY), with BEV van sales declining by 13.9% YoY.
  • Mercedes-Benz Mobility revenue decreased to €25.1bn (-1.9% YoY), impacted by lower financing volumes and rising interest rates. However, contract volume was €138.1bn (+2.3% YoY), showing resilience despite headwinds.
• EBIT declined to a value of €13.6bn (-30.8% YoY), impacted by a challenging macroeconomic environment and higher costs.
  • Mercedes-Benz Cars EBIT was €8.46bn (-40.5% YoY), driven by negative pricing effects, higher input costs, and China’s slowdown.
  • Mercedes-Benz Vans EBIT was €2.93bn (-6.6% YoY), as cost savings offset some volume declines.
  • Mercedes-Benz Mobility was €1.1bn (-12.9% YoY), with profitability affected by a lower interest margin and increased competition.
• Net income was also on a downward trend, recording a value of €10.4bn (-28.4% YoY), as the company faced weaker sales of high-margin models.
• EPS recorded a value of €10.19 (-24.3% YoY), reflecting lower profitability and investment in future technologies.
• Free cash flow remained at a fairly high, but still declining, value of €9.2bn (-19.1% YoY), supported by strong cash conversion at Cars & Vans, despite lower earnings.
• Dividend proposal is €4.30 per share (down from €5.30 in 2023). The company announced a share buyback program of €5bn over the next 24 months.

Mercedes-Benz is preparing for a transformative 2025, balancing profitability with increased investment in electrification and innovation. Revenue is expected to be slightly below 2024 levels, reflecting macroeconomic uncertainty and pricing adjustments. EBIT and free cash flow are projected to decline, impacted by higher R&D spending (€8.7bn for Cars, €1.0bn for Vans), new product development, and CO₂ compliance costs. Unit sales may be slightly lower YoY, as the company prioritizes high-quality revenue over volume growth, while xEV share is set to rise to 20-22% for Cars and 8-10% for Vans, driven by expanded hybrid and BEV offerings.

The declining results also had repercussions on MBG’s share price, which fell by over -4% this week, although the company seems to be optimistic about the future, despite the uncertainties in the automotive sector.

Author: Ionuț-Adrian Lazar