Mercedes raises earnings outlook as supply issues ease

Europe

BERLIN — Mercedes-Benz forecasts a subdued world economy with monetary policy weighing on consumers but said supply-chain issues and energy-price pressures were easing, as it raised its group earnings outlook for the full year.

The automaker said in statements issued on Thursday that inventory was building up as a result of the roll-out of its direct-sales model and a ramp-up in production with new models coming onto the market.

The supply chain was “noticeably improved”, Mercedes said, in contrast to Porsche which said in results on Wednesday it was struggling weekly with supply-chain problems particularly on key components for EVs.

Still, the outlook for the Mercedes cars segment of 12 percent-14 percent returns on unit sales and revenue at prior level remained unchanged, but property, plant and equipment as well as research and development expenditures will rise, the company said.

Mercedes had set a cautious tone at the beginning of the year on warnings of a sluggish economy but was slightly more optimistic in April as the U.S. and China saw signs of recovery.

Full-year earnings before interest and tax (EBIT) are now expected to be on par with the 20.5 billion euros ($22.7 billion) made in 2022, it said on Thursday, having previously expected a slight decline.

Mercedes-Benz Vans’ outlook for adjusted return on sales was raised to 13 percent to 15 percent in 2023, up from 11 percent to 13 percent previously forecast, marking the second outlook upgrade in less than three months after a significant increase in sales in the second quarter.

This month, the company reported 6 percent growth in its second-quarter vehicle sales as a result of high demand for all-electric and top-end vehicles, posting growth in Europe, Asia and North America.

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