Mercedes Benz : Interim Report Q1 2024

Interim Report Q1 2024

Interim Report Q1 2024 | Mercedes-Benz Group			2
Contents	Key Figures	Reporting Principles	Interim Group Management Report	Interim Consolidated Financial Statements	Further Information

Contents

3 KEY FIGURES

1. REPORTING PRINCIPLES
2. INTERIM GROUP MANAGEMENT REPORT

1. Important events
2. Business development

11	Profitability
16	Cash flows
22	Financial position
26	Outlook
28	Risk and Opportunity Report

1. CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
2. Consolidated Statement of Income/Loss
3. Consolidated Statement of

Comprehensive Income/Loss

32 Consolidated Statement of Financial Position

34	Consolidated Statement of Cash Flows

36 Consolidated Statement of Changes in Equity

38 Notes to the Interim Consolidated Financial Statements

58 FURTHER INFORMATION

1. Auditor's Review Report
2. Information on the Internet

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Contents	Key Figures	Reporting Principles	Interim Group Management Report	Interim Consolidated Financial Statements	Further Information

Key Figures

Financial key figures of the Mercedes-Benz Group in the first quarter

	Q1 2024	Q1 2023	Change
In millions of euros			in %
Revenue	35,873	37,516	-4
EBIT	3,863	5,504	-30
Adjusted EBIT	3,598	5,422	-34
Net profit	3,025	4,011	-25
Earnings per share (in euros)1	2.86	3.69	-22
Free cash flow of the industrial business	2,233	2,164	+3
Adjusted free cash flow of the industrial business	2,323	2,245	+3
Net liquidity of the industrial business (31 March)	33,635	28,889	+16
Investments in property, plant and equipment	659	789	-16
Research and development expenditure2	2,197	2,458	-11
thereof capitalized development costs	729	775	-6

1. Based on net profit attributable to shareholders of Mercedes-Benz Group AG.
2. Adjustment in first quarter 2023 carried out: reduction of € 12 million. Further information can be found in the table "Condensed Consolidated Statement of Income/Loss for the three-month period ended 31 March" in the chapter Profitability.

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Contents	Key Figures	Reporting Principles	Interim Group Management Report	Interim Consolidated Financial Statements	Further Information

Financial key figures of the segments in the first quarter

		Mercedes-Benz Cars		Mercedes-Benz Vans
	Q1 2024	Q1 2023	Change	Q1 2024	Q1 2023	Change
In millions of euros			in %			in %
Revenue	25,713	27,812	-8	4,893	4,615	+6
EBIT	2,456	4,148	-41	933	762	+22
Adjusted EBIT	2,323	4,113	-44	800	719	+11
Return on sales (in %)	9.6	14.9	.	19.1	16.5	.
Adjusted return on sales (in %)	9.0	14.8	.	16.3	15.6	.
CFBIT	2,297	2,981	-23	643	410	+57
Adjusted CFBIT	2,341	3,020	-22	688	450	+53
Adjusted cash conversion rate	1.0	0.7	.	0.9	0.6	.
Investments in property, plant and equipment	601	732	-18	46	51	-10
Research and development expenditure	1,933	2,254	-14	241	191	+26
thereof capitalized development costs	601	685	-12	127	90	+41
					Mercedes-Benz Mobility
				Q1 2024	Q1 2023	Change
In millions of euros						in %
Revenue				6,855	6,639	+3
EBIT				279	539	-48
Adjusted EBIT				279	539	-48
Return on equity (in %)				8.5	15.6	.
Adjusted return on equity (in %)				8.5	15.6	.
New business				14,750	14,701	+0

1 The adjusted cash conversion rate is the ratio of adjusted CFBIT to adjusted EBIT.

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Contents	Key Figures	Reporting Principles	Interim Group Management Report	Interim Consolidated Financial Statements	Further Information

Non-financial key figures in the first quarter

		Mercedes-Benz Cars		Mercedes-Benz Vans
	Q1 2024	Q1 2023	Change	Q1 2024	Q1 2023	Change
In units			in %			in %
Total unit sales	462,978	503,483	-8	105,425	98,885	+7
thereof
Electrified vehicles (xEVs)	90,177	91,698	-2	2,980	3,570	-17
All-electric vehicles (BEVs)	47,521	51,639	-8	2,980	3,570	-17
Plug-in hybrid vehicles (PHEVs)	42,656	40,059	+6	-	-	.
Share of electrified vehicles in % of unit sales	19.5	18.2	.	2.8	3.6	.
Share of all-electric vehicles (BEVs) in % of unit sales	10.3	10.3	.	2.8	3.6	.

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Contents	Key Figures	Reporting Principles	Interim Group Management Report	Interim Consolidated Financial Statements	Further Information

Reporting principles

The Interim Report of Mercedes-Benz Group AG as of 31 March 2024 comprises an Interim Group Management Report (Interim Management Report) and condensed Interim Consolidated Financial Statements (Interim Financial Statements). In keeping with IAS 34 (Interim Financial Reporting), the Interim Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) and their interpretations as endorsed by the European Union (EU) and effective at the reporting date. This Interim Group Management Report and the Interim Financial Statements also comply with the requirements of the German Securities Trading Act (WpHG).

This Interim Report should be read in conjunction with the Annual Report for financial year 2023 and the additional information contained therein.

The Group comprises the segments Mercedes-Benz Cars, Mercedes-Benz Vans and Mercedes-Benz Mobili- ty. The reconciliation of the segments to the Group (reconciliation) presents the functions and services provided by the Group's headquarters. In addition, it includes equity investments that are not allocated

to the segments, effects at the corporate level and the impact on earnings of eliminating intercompany transactions between the segments.

The Interim Report is presented in euros (€). Unless otherwise stated, all amounts are stated in millions of euros. All figures shown are commercially rounded.

The Board of Management authorized the Interim Report for publication on 29 April 2024. It is published in German and English. The German version is binding.

The Interim Management Report and the Interim Financial Statements have been reviewed by the Mercedes- Benz Group's auditors.

Forward-looking statements

This document contains forward-looking statements that reflect our current views about future events. The words "anticipate", "assume", "believe", "estimate", "expect", "intend", "may", "can", "could", "plan", "project", "should" and similar expressions are used to identify forward- looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a negative change in market conditions in our most important markets; a deterioration of our refinancing possibilities on the credit and financial markets; events of force majeure including natural disasters, pandemics, acts of terrorism, political unrest, armed conflicts, industrial accidents and their effects on our sales, purchasing, production or financial services activities; changes in currency exchange rates, customs and foreign trade provisions; changes in laws, regulations and government policies (or changes in their interpretation), particularly those relating to vehicle emissions, fuel economy and safety or to ESG reporting (environmental, social or governance topics); price increases for fuel, raw materials or energy; disruption of production due to shortages of materials or energy, labour strikes or supplier insolvencies; a shift in consumer preferences towards smaller, lower-margin vehicles; a limited demand for all-electric vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilize our production capacities; a decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization measures; the business outlook for companies in which we hold a significant equity interest; the successful implementation of strategic cooperations and joint ventures; the resolution of pending governmental investigations or of investigations requested by governments and the outcome of pending or threatened future legal proceedings; and other risks and uncertainties, some of which are described under the heading "Risk and Opportunity Report" in the current Annual Report or in this Interim Report. If any of these risks and uncertainties materializes or if the assumptions underlying any of our forward-looking statements prove to be incorrect, the actual results may be materially different from those we express or imply by such statements. We do not intend or assume any obligation to update these forward-looking statements since they are based solely on the circumstances at the date of publication.

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Contents	Key Figures	Reporting Principles	Interim Group Management Report	Interim Consolidated Financial Statements	Further Information
			Important events

Interim Group Management Report

Important events

Review of future structure of Own Retail in Germany On 19 January 2024, the Mercedes-BenzGroup announced a comprehensive review of the structures of the Group's Own Retail in Germany. The review is open- ended as regards its outcome and will be conducted individually and step-by-stepat each retail location. The Group expects the transformation process to take several years. Contract negotiations with potential buyers had not yet taken place as of the balance sheet date. At the present time, it is not possible to reliably estimate the effects on the profitability, cash flows and financial position.

Share buyback policy and further share buyback programme

On 21 February 2024, Mercedes-Benz Group AG resolved to implement a share buyback policy. Based on such policy, the future Free Cash Flow of the industrial business (as available post potential small-scale M&A transactions) generated beyond the approximately 40% dividend payout ratio of Mercedes-Benz Group net profit shall be used to fund share buybacks with the purpose of redeeming shares.

In this context, Mercedes-Benz Group AG has also resolved to conduct a further share buyback programme, through which it is intended to acquire treasury shares worth up to €3 billion (not including incidental costs) on the stock exchange and to then cancel them. The further share buyback programme will be based on the authorization by the Annual General Meeting of Mercedes-Benz Group AG on 8 July 2020, authorizing the Board of Management to acquire, with the approval of the Supervisory Board, treasury shares up to a maximum of 10% of the share capital until 7 July 2025.

The additional share buyback programme is now scheduled to commence in May 2024 in parallel with the share buyback programme in the volume of up to €4 billion (not including incidental costs) which was started in March 2023. Both share buyback programmes are expected to be completed in the first quarter of 2025.

Future share buyback programmes are subject to the necessary resolutions of the company's corporate bodies required in each individual case.

Mercedes-Benz Group ESG Conference 2024 At the ESG conference on 20 March 2024, the Mercedes-BenzGroup presented the progress it has made in achieving the sustainability targets. The Group continues to pursue the goal of making the entire new vehicle fleet net carbon-neutral1 across all stages of the value chain by 2039. As part of the global expansion of the electric vehicle portfolio, the goal is to achieve an electrified vehicle share of up to 50% of new vehicle car fleet sales in the second half of the decade. An 80% reduction in CO₂ emissions is planned in production by the end of the decade2. By 2039, 100% of the plants' energy requirements are to be covered by renewable sources of energy. In addition, social aspects and good corporate governance contribute to a holistic sustainability approach. Strategically focused and tactically flexible, the company remains environmentally and economically on the path towards a sustainable future.

1. Net carbon-neutral means that no CO2 emissions are caused or that any CO2 emissions arising are compensated for by certified offset projects.
2. Scope 1 (direct CO2 emissions from sources for which the company is directly responsi- ble or which it controls) and Scope 2 emissions (indirect CO2 emissions from purchased energy such as electricity and district heating that are generated externally but con- sumed by the company) in comparison to 2018.

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Contents	Key Figures	Reporting Principles	Interim Group Management Report	Interim Consolidated Financial Statements	Further Information
			Business development

Business development

Automotive markets

The development of the world economy continued to be rather subdued in the first quarter of 2024, even though a number of leading indicators improved somewhat near the end of the period. The European economy continued to stagnate, while the US economy remained robust and was stronger than expected. The Chinese economy continued to face considerable structural challenges, especially in the property sector; however, short-term economic development stabilized further in the first quarter. The decrease in inflation rates has slowed recently in many places. Accordingly, major central banks left their key interest rates at the previously high levels.

In the automotive markets, weaker demand from customers became increasingly noticeable after the high order backlogs caused by the pandemic had largely been eliminated. Nevertheless, the global car market saw a slight increase in the first quarter of the year thanks to strong growth in China. In Europe, the market volume was also slightly above the previous year's level. The US light vehicle market also recorded slight growth in the past quarter. The Chinese market, on the other hand, was up significantly; however, in the prior-year period, unit sales there were still impacted

purchases. Recently, the development of the premium and luxury segment of the market in China was weaker than that of the car market as a whole.

The results in key van markets were mixed in the past quarter. In the Europe region, the total market for mid- size and large vans was significantly above the previous year's level. The small van segment, on the other hand, was slightly down. The US market for large vans was significantly below the level of the previous year. The Chinese market for mid-size vans recorded a slight increase.

Unit sales

Mercedes-Benz Cars

Mercedes-Benz Cars sold 463,000 units in the first quarter of 2024 (Q1 2023: 503,500). The 8% decline in unit sales compared to the previous year's quarter was primarily attributable to the Chinese market. Developments in China were affected in particular by model changes and bottlenecks in the supply chain. Unit sales in Europe and the USA were recorded at previous year's level.

Unit sales in the Top-End1 category accounted for 14% of total unit sales in the first three months of 2024. The availability of Top-End products was mainly restricted by the model changeover of the G-Class and the Mercedes-AMG derivatives of the E-Class and GLC as well as bottlenecks in the supply chain. Mercedes-AMG sold 29,000 units (Q1 2023: 40,300). The S-Class2 maintained its market leadership in the major sales markets, at 16,900 (Q1 2023: 26,700) vehicles. Sales of the GLS2 amounted to 18,400 units (Q1 2023: 21,400) and of the G-Class2 to 9,200 units (Q1 2023: 10,200). Mercedes-Maybach sold 5,200 vehicles (Q1 2023: 6,700).

by the partial elimination of tax concessions on car

1. The Top-End category comprises all AMG models, including the AMG models of the various "Class" model ranges and their derivatives in the Core and Entry segments.
2. Including Mercedes-Maybach and Mercedes AMG derivatives.

Interim Report Q1 2024 | Mercedes-Benz Group

Contents

Key Figures

Reporting Principles

9

Interim Group Management Report	Interim Consolidated Financial Statements	Further Information
Business development

The Core category accounted for 58% of the overall portfolio's unit sales in the first quarter of 2024. The 8% increase in this category was mainly due to the improved availability of the GLC. Sales of the GLC1 increased to 87,100 units (Q1 2023: 54,200). Sales of the E-Class1 fell to 52,700 units (Q1 2023: 82,700) due

to the market launch in China and the associated temporarily limited availability. Unit sales of the C-Class1rose to 81,500 saloons, estates, coupés and cabriolets (Q1 2023: 80,800). Sales of the GLE1 reached 59,100 units (Q1 2023: 49,000).

The Entry category represented 28% of the entire portfolio in the first quarter of 2024. Sales of the A-Class1 totalled 53,200 units (Q1 2023: 68,600). Sales of the B-Class amounted to 4,300 vehicles (Q1 2023: 5,400). The GLA1 reached 39,100 units sold (Q1 2023: 45,300), and the GLB1 34,600 units (Q1 2023: 48,700). A total of 3,800 smart vehicles were sold in the European market (Q1 2023: 5,400).

Overall, the share of electrified vehicles in Mercedes- Benz Cars' total unit sales reached 19.5% in the first three months of 2024 (Q1 2023: 18.2%). This corresponds to 90,200 units (Q1 2023: 91,700). Unit sales of all-electric vehicles were down 8% on the same quarter of the previous year. The decline was mainly due to the end of the product life cycle of the smart EQ fortwo (previously produced in Europe) in the first quarter

of 2024. In addition, demand for all-electric vehicles slowed following the discontinuation of the environ-

mental bonus for electric vehicles in Germany in December 2023. Demand for plug-in hybrid vehicles led to a 6% increase in unit sales in the first quarter of 2024 compared to the same quarter of the previous year.

Mercedes-Benz Cars unit sales

	Q1 2024	Q1 2023	Change
In units			in %
Total unit sales	462,978	503,483	-8
Top-End	66,554	91,772	-27
% share of unit sales	14	18
Core	267,662	248,383	+8
% share of unit sales	58	49
Entry	128,762	163,328	-21
% share of unit sales	28	33
thereof
Electrified vehicles (xEVs)	90,177	91,698	-2
All-electric vehicles (BEVs)	47,521	51,639	-8
Plug-in hybrid vehicles
(PHEVs)	42,656	40,059	+6
Share of electrified vehicles
in % of unit sales	19.5	18.2

Mercedes-Benz Vans

Mercedes-Benz Vans increased unit sales in the first quarter of 2024 by 7% to 105,400 vehicles (Q1 2023: 98,900), thus setting a new record for a first quarter. The increase in unit sales is primarily attributable to the US market and the growth in sales in China.

The large vans (Sprinter/eSprinter) recorded a significant increase in sales to 56,700 units (Q1 2023: 51,300). Sales of mid-size vans (Vito/eVito, V-Class/EQV) totalled 42,500 units (Q1 2023: 39,400). Sales of small vans (Citan/eCitan, T-Class/EQT2) amounted to 6,300 units (Q1 2023: 8,200).

Sales of electrified vans amounted to 3,000 units in the first quarter of 2024 (Q1 2023: 3,600). These were exclusively all-electric models. The share of electrified vehicles reached 3% of total unit sales (Q1 2023: 4%). The decrease was partially due to the discontinuation of the environmental bonus for electric vehicles in Germany.

1 Including Mercedes AMG derivatives.

2 WLTP: combined energy consumption: 20.7-19.3 kWh/100 km; combined CO2 emis-

sions: 0 g/km; CO2 class: A.

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			Business development

Mercedes-Benz Mobility

In the period ended 31 March 2024, the Mercedes-Benz Mobility division recorded a contract volume of €134.7 billion, on a par with 31 December 2023 (€135.0 billion).

Influenced by developments in unit sales, the number of new financing and leasing contracts of 318,300 was 7% below the level of the same quarter of the previous year (Q1 2023: 341,300). At €14.8 billion (Q1 2023: €14.7 billion), new business remained at the same level as in the prior-year period due to a higher average financing and leasing volume per contract.

Investment and research activities

Investments in property, plant and equipment

The investments in property, plant and equipment of the Mercedes-Benz Group amounted to €0.7 billion in the first quarter of 2024 (Q1 2023: €0.8 billion). Key drivers were investments in new vehicle architectures, the electrification of the product portfolio and the expansion of digitalization.

Investments in property, plant and equipment1

	Q1 2024	Q1 2023	Change
In millions of euros			in %
Mercedes-Benz Group	659	789	-16
thereof Mercedes-Benz Cars	601	732	-18
thereof Mercedes-Benz Vans	46	51	-10

1 The investments in property, plant and equipment correspond to additions to property, plant and equipment in the Consolidated Statement of Cash Flows.

Research and development expenditure

The research and development expenditure of the Mercedes-Benz Group amounted to €2.2 billion in the first quarter of 2024 (Q1 2023: €2.5 billion), of which €0.7 billion (Q1 2023: €0.8 billion) was capital- ized. Research and development services focus

on the transformation towards a sustainable business strategy.

Research and development

	Q1 2024	Q1 2023	Change
In millions of euros			in %
Research and development
expenditure1	2,197	2,458	-11
thereof Mercedes-Benz Cars	1,933	2,254	-14
thereof Mercedes-Benz Vans	241	191	+26
Research and non-capitalized
development costs1	1,468	1,683	-13
Capitalized development costs	729	775	-6
Capitalization rate in %	33	32

1 Adjustment in first quarter 2023 carried out: reduction of €12 million. Further infor- mation can be found in the table Condensed Consolidated Statement of Income/Loss for the three-month period ended 31 March in the chapter Profitability.