German Manager Magazin: Mercedes-Benz achieves a return of almost 15 percent002446

Reason for joy at Ola Källenius (53): The CEO of the car manufacturer Mercedes Benz can continue to benefit from high sales prices in view of the impending economic downturn. In the first quarter, the Stuttgart-based company exceeded the strong value from the same period last year with its earnings before interest and taxes, according to preliminary figures from Thursday evening.

The group earned 5.5 billion euros in the months of January to March, around 5 percent more. The cash inflow, which is important for investors – calculated without financial services – was also above the estimates of experts at 2.2 billion euros. The so-called free cash flow provides information about the current financial strength of a company and can be an indication of how much dividends it can pay out to investors.

Mercedes-Benz brings in a return of around 15 percent

In the most important division with car manufacturing, the group achieved a profit margin before interest and taxes of 14.8 percent, adjusted for special effects, the group further announced. Although that was less than in the exceptionally strong prior-year period of 16.4 percent, it was also more than in the previous quarter. According to the company, analysts on the stock market had only expected a 13.4 percent margin this time.

The Run at expensive luxury models brought the company further high profitability in its core car business. The delivery van business also provided a tailwind, with a return of 15.6 percent (consensus: 13.1 percent) the shops flushed an unexpected amount of money into the coffers of the Dax group.

In general, the key data for the Swabians turned out better than expected on the capital market. For a long time, the German car manufacturers had been able to charge high sales prices due to the scarce supply due to the lack of parts and thanks to strong demand – according to industry experts, however, the tide could turn this year because consumers and companies, in view of the economic downturn, are examining more closely whether expensive purchases are necessary.

Mercedes was able to largely allay the concerns of investors – at least in the first three months of the year. The shares of Mercedes-Benz were at the top of the Dax on Friday morning with a plus of 1.11 percent. Bank JPMorgan commented on the provisional quarterly figures published the previous evening that they illustrated the automaker’s great pricing power and, consequently, its profitability. The group intends to publish the full quarterly figures on April 28th.

In the announcement, Mercedes spoke of healthy net pricing in the car business, higher sales and a good product mix. However, material costs have also risen and higher research and development expenses have been incurred. The carmaker sold 503,500 cars in the first quarter, around 3 percent more cars, with the particularly high-yield and expensive models showing an above-average increase. The company continued to record high growth rates for electric cars.

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