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Mercedes-Benz Q1 earnings plummet on model transitions, EV slump
(Sharecast News) - German automotive group Mercedes-Benz said on Tuesday that Q1 earnings had plummeted as it was weighed down by model changes and soft demand for electric vehicles. Mercedes-Benz stated adjusted underlying group earnings dropped to €3.86bn, down 30% year-on-year and short of consensus estimates of €3.87bn.
In its cars division, return on sales fell from 14.9% in Q123 to 9.6% in Q124, with vehicle sales down 8% at 462,978 as Mercedes-Benz pointed to model transitions in its top-end segment and supply chain-related costs.
Overall, Mercedes-Benz said pricing remained at "a high level" in Q1, with sales expected to increase in the coming quarters with its top-end vehicle mix expected to improve in the second half. Mercedes also noted that the EV adoption rate has slowed across the industry and pointed out that in the transition from ICE to BEV vehicles, Mercedes-Benz plug-in hybrids were expected to "play an important role".
"Sales levels in the first quarter are seen as the trough, with second-quarter volumes expected to be better," the company said.
On the other hand, Mercedes-Benz, which kept its outlook for the year unchanged, said free cash flow from its industrial business grew 3.2% to €2.23bn.
Finance chief Harald Wilhelm said: "While we remain vigilant about the global macroeconomic and geopolitical outlook, we confirm our full-year financial targets for 2024."
As of 1040 BST, Mercedes-Benz shares were down 3.72% at €72.01 each.
Reporting by Iain Gilbert at Sharecast.com
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