Mercedes-Benz's car division reported EBIT of €49m in the quarter, and the division that lends money reported €492m
The release is titled full-year outlook confirmed. Two lines of the outlook moved.
Mercedes-Benz Cars unit sales and Group revenue are now anticipated slightly below prior-year levels, the company said on Tuesday, and the expected share of electrified vehicles at Cars is now 23 to 25 percent. The adjusted return on sales guidance for Cars, 3 to 5 percent, is confirmed. Guidance for adjusted return on equity at Financial Services goes up, to 12 to 14 percent. Free cash flow guidance for the industrial business is confirmed.
Underneath that, the quarter divides cleanly by division. Group revenue was €32.1bn against €33.2bn a year earlier. Group EBIT was €1.5bn against €1.3bn, helped by a positive effect of €131m connected to the planned sale of the Athlon leasing business. Adjusted Group EBIT was €2.3bn against €2.0bn.
Cars is the division under pressure. Adjusted EBIT there was €909m against €1,228m, an adjusted return on sales of 4.0 percent against 5.1 percent, which the company attributes to market pressure in China, a less favourable model mix, lifecycle measures and launch costs, partly offset by efficiency gains. Reported EBIT at Cars was €49m against €783m, and the difference is €704m of impairments on Chinese equity-method investments, excluded from the adjusted number and, the company says, involving no matching cash outflow in the quarter.
Financial Services earned more than the car business reported. Its adjusted EBIT rose 70 percent to €492m on higher portfolio margins and lower operating expenses, with adjusted return on equity of 15.3 percent. Vans held an adjusted return on sales of 10.2 percent and adjusted EBIT of €454m, up 3 percent, on second-quarter sales of 94,075 units.
The volume picture is regional. Cars sold 417,765 vehicles against 453,674 a year earlier. Sales rose 4 percent in Europe and 10 percent in the United States and fell 30 percent in China, where the company cites competition, subdued demand and a portfolio-wide model changeover. Excluding China, global car sales rose 2 percent. Battery-electric sales rose 51 percent to 52,852 units, with Europe up 87 percent, and the company says battery-electric order intake in Europe more than doubled in the quarter.
Cost is the other running story. General administrative expenses fell 14 percent at group level and research and development spending fell 12 percent after last year's peak, while cost of sales at Cars fell 7 percent. The company puts the reduction in fixed costs since 2019 at about 25 percent and says it began intensifying productivity measures again in June, with particular attention to its German sites. Free cash flow of the industrial business was €1.1bn in the quarter against €1.9bn, including €417m from the partial sale of the Daimler Truck holding, and €3.0bn across the half against €4.2bn, after roughly €1.1bn of severance payments. Net liquidity of the industrial business stood at €30.4bn after €5bn of dividends and buybacks in the half.
