Mercedes-Benz lifts revenue forecast as luxurious vehicles increase

  • Mercedes-Benz Group Q3 earnings up 83% to five.2 bln euros
  • Carmaker raises forecast for vehicles and group full-year earnings
  • Provide chain points hampered top-end and BEV manufacturing
  • Withdrawing from Russian market – CFO

BERLIN, Oct 26 (Reuters) – Mercedes-Benz (MBGn.DE) raised its full-year revenue forecast on Wednesday as robust demand for luxurious vehicles and price financial savings offset the provision chain bottlenecks which have hampered trade output this yr.

The German automaker stated it now anticipated group earnings to rise not less than 15% this yr, in contrast with a earlier forecast of 5%-15% progress, after income at its vehicles division virtually tripled within the third quarter from pre-pandemic ranges.

Pent-up demand in Europe and a excessive order backlog would carry the corporate into subsequent yr, chief monetary officer Harald Wilhelm stated, including it could prioritise bringing down stock within the fourth quarter. The corporate forecast a slight improve in fourth-quarter gross sales from a yr earlier.

The marked improve in profitability comes after Mercedes-Benz pledged in 2020 – then a part of Daimler Group – to chop fastened prices, capital expenditure and analysis and growth spending by greater than 20% by 2025.

Inflation in its personal prices means it could must make extra cuts than deliberate to achieve that focus on, chief monetary officer Harald Wilhelm informed a media name.

The vehicles division earned 4.03 billion euros from 28.2 billion income within the third quarter, in contrast with 1.4 billion euros and 23.5 billion respectively in the identical quarter of 2019.

The corporate raised its full-year margin forecast for the vehicles division to 13-15% from 12-14%.

WITHDRAWAL FROM RUSSIA

Wilhelm additionally stated on an analysts’ name the group would withdraw from the Russian market and dump shares in its Russian subsidiaries – consisting of its trade and monetary providers companies – to native traders.

The corporate had suspended exports of passenger vehicles and vans to Russia in addition to native manufacturing in March following Russia’s invasion of Ukraine.

Mercedes-Benz has a automotive plant within the city of Esipovo, 40 kilometres (25 miles) northwest of Moscow, with over 1,000 workers that produces E-class sedans and SUVs.

“(The withdrawal) isn’t anticipated to provide rise to any additional vital results on the group’s profitability and monetary place past these reported in earlier quarters,” Wilhelm stated.

Group earnings reached 5.2 billion euros from July to September, up 83% from final yr, with income up by a fifth to 37.7 billion euros, adjusted returns of 14.5% for the vehicles division and 12.7% at Mercedes-Benz Vans.

Mercedes-Benz Vans noticed gross sales up by just below a fifth to 104,000 autos, with electrical van gross sales up by a 3rd this yr to this point.

High-end luxurious gross sales lifted revenues, making up 15% of general vehicles gross sales within the third quarter.

($1 = 1.0047 euros)

Reporting by Victoria Waldersee Enhancing by Shri Navaratnam and Mark Potter

Our Requirements: The Thomson Reuters Belief Ideas.

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