After an increase in profit: Mercedes-Benz expects headwinds in 2022

Created: 02/11/2022 15:59

Mercedes-Benz made significantly more profit in 2021 than expected.

© Marijan Murat/dpa/archive image

Mercedes-Benz made significantly more profit in 2021 than expected.

However, rising raw material prices could now slow down the carmaker.

Munich – The Stuttgart car manufacturer Mercedes-Benz* is preparing for a headwind in the current year after a significant increase in profits.

Chief Financial Officer Harald Wilhelm named rising commodity prices as the main reason for analysts on Friday.

Mercedes-Benz with a big jump in profits

Without higher car sales, it will not be possible to compensate for this effect: "It's probably not just about higher prices." Last year, the Stuttgart-based company made more profit than originally assumed.

According to preliminary figures, adjusted operating profit at Mercedes-Benz Cars & Vans improved to 14 billion euros in 2021 - more than twice as much as a year ago.

At 12.7 percent, the return on sales is above the self-imposed range of ten to twelve percent.

Wilhelm said Mercedes-Benz benefited from a favorable product mix* and higher prices.

Due to the global shortage of chips, car manufacturers around the world cannot produce as many vehicles as planned, while demand for cars is strong.

This drives up prices because far fewer discounts have to be given on new cars.

Cars are also traded more expensively on the used car market.

In view of the chip shortage, many car manufacturers have restricted the construction of small cars in the past few months and concentrated on their profitable top models, including Mercedes-Benz.

For the Stuttgart team, this isn't just a reaction to the bottlenecks, it's a strategy: "We'll do our best to make further progress here," said Wilhelm. 

Mercedes-Benz boss promises returns of over ten percent

Mercedes-Benz boss Ola Källenius has withdrawn from the competition for the sales crown, which was a central goal of his predecessor Dieter Zetsche.

Because first place could only be won thanks to high sales figures of less profitable compact cars.

Källenius has promised investors returns of over ten percent and wants to focus more on the luxury segment.

Wilhelm said the 12.7 percent yield is a reference for the future.

At the same time, improvement in the chip crisis is in sight, said the chief financial officer.

A relaxation can be expected from the second half of the year.

Capacities are already increasing again, the shortage is increasingly limited to individual suppliers and is no longer an industry-wide problem.

The figures were positively received on the stock exchange.

The stock jumped up to eight percent, the biggest jump in price in a year.

Jefferies analysts said the strong 2021 numbers should raise expectations for 2022 as management primed the market for higher margins.

Mercedes-Benz: Strong cash flow

Daimler spun off its truck division last year;

it was only included up to December 9th.

Daimler Trucks has been listed in the MDax small-cap index since this Friday.

The cash inflow of the group, which included the car and truck business until the beginning of December, was around 8.5 billion euros in 2021, also slightly better than expected.

According to the information provided, the financial division Mercedes-Benz Mobility generated an adjusted operating profit of around 3.4 billion euros and a profit margin of 22 percent.

Group figures for profit and sales are not yet available, they are expected at the balance sheet press conference on February 24th.

However, the spin-off of the truck business* should have a positive impact on operating profit;

Mercedes-Benz put the effect at nine to ten billion euros.

*Merkur.de is an offer from IPPEN.MEDIA.