Mercedes-Benz lays out its roadmap for profitable growth

• Cash generation: Solid cash generation with a €9.2 billion free cash flow from the industrial business in 2024.
• Performance: Comprehensive performance enhancement plan (Next Level Performance) seeks to return Mercedes-Benz Cars to a double-digit adjusted Return on Sales (RoS) margin.
• Outlook 2025: Group revenue expected slightly below prior-year level, Group EBIT and free cash flow from the industrial business expected significantly below prior-year level.
• Shareholder returns: Capital allocation framework in place. Dividend of €4.30 per share proposed and new share buyback programme for a maximum of up to €5 billion in up to 24 months decided, subject to Annual General Meeting approval to buy back up to 10% of share capital.

Mercedes-Benz Group AG delivered solid financial results for 2024 and unveiled a multi-year product and performance enhancement plan to strengthen the company’s resilience.  

“Mercedes-Benz Group delivered solid results in a very challenging environment thanks to a range of outstanding products and strict cost discipline. To ensure the company’s future competitiveness in an increasingly uncertain world, we are taking steps to make the company leaner, faster and stronger, while readying an intense product launch campaign for multiple new vehicles starting with the all new CLA.”  
Ola Kaellenius, Chief Executive Officer of Mercedes-Benz Group AG 

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Mercedes-Benz’s product launch programme starts in 2025 with the CLA, followed by a major upgrade of the S-Class in 2026, an all-electric GLC and C-Class, as well as a string of BEV and electrified high-tech ICE launches at Mercedes-AMG. Overall, sales are expected to gain traction after dozens of new or refreshed models reach the markets until 2027.

To strengthen its competitiveness and resilience, Mercedes-Benz has launched a comprehensive performance enhancement programme – known as Next Level Performance. Through a set of initiatives, Mercedes-Benz Group aims to further leverage growth potential through its direct sales channel, elevate the customer service experience to a new level and to boost revenue quality. In addition, the company will take steps to make its global production footprint more efficient and more flexible. The company plans to cut production costs by 10% until 2027. Material costs will be tackled in close collaboration with suppliers and fixed-cost reductions will continue through to 2027, building on significant progress achieved over the past four years.   

Technology and design

Going forward a coherent design language will be used across the entire portfolio. BEV and electrified high-tech ICE models will exploit their respective strengths, without sacrificing space, elegance, convenience or efficiency. Thanks to intelligent modularisation, Mercedes-Benz will offer a unified tech stack in infotainment and Advanced Driver Assistance Systems (ADAS), a consistent customer experience as well as best-in-class roominess and perfect proportions while keeping a tight grip on costs and manufacturing flexibility, allowing Mercedes-Benz to tailor products to specific markets like China. 

2024 results

Group earnings before interest and taxes (EBIT) reached €13.6 billion (2023: €19.7 billion). Group revenues came in at €145.6 billion (2023: €152.4 billion). The free cash flow from the industrial business reached €9.2 billion (2023: €11.3 billion) mainly due to a very high cash conversion rate at Cars and Vans. The net liquidity of the industrial business reached €31.4 billion (end of 2023: €31.1 billion) remaining on a similar level as the prior year, demonstrating strong cash generation at work, despite more than €10 billion cashout for dividend payments and share buybacks in 2024.  

* in millions of € 

Divisional results 

The adjusted EBIT at Mercedes-Benz Cars fell to €8.7 billion (2023: €14.3 billion) on lower volumes, particularly in China, negative net pricing and an unfavourable model mix. The adjusted RoS in 2024 was 8.1% (2023: 12.6%). Research and Development costs remained on a high level due to investments for future platforms and technologies, particularly for MB.OS, while investments in PP&E remained at the previous year’s level.

* in millions of € 

Adjusted EBIT at Mercedes-Benz Vans reached €2.8 billion (2023: €3.1 billion) and the adjusted RoS remained almost at the previous year’s level, at 14.6% (2023: 15.1%). A healthy mix supported by improved product substance partially offset lower overall sales. Furthermore, in the challenging environment, the comprehensive cost initiative further supported profitability. Research and Development costs remained on a high level due to investments into the new, further flexibilised van architecture with two variants: Van Electric Architecture (VAN.EA) for BEV models and Van Combustion Architecture (VAN.CA) for ICE models.

* in millions of € 

Mercedes-Benz Mobility remains a strong partner for Mercedes-Benz Cars and Vans. In 2024, Mercedes-Benz Mobility´s total portfolio amounted to €138.1 billion (2023: €135.0 billion) while new business declined to €59.5 billion (2023: €62.0 billion). The adjusted EBIT came in at €1.1 billion (2023: €1.7 billion) and was impacted mainly due to a reduced interest margin resulting from interest rate developments and increased competition in the financial services sector, especially in China. As a result, the adjusted return on equity (RoE) declined to 8.7% (2023: 12.3%).

* in millions of €  

Dividend 

At the Annual General Meeting on May 7, 2025, the Board of Management and the Supervisory Board will propose a dividend of €4.30 per share (2023: €5.30).

Share buyback policy 

Mercedes-Benz has decided to buy back own shares worth up to a maximum €5 billion (not including incidental costs) on the stock exchange over a period of up to 24 months, subject to the renewal of the authorization by the Annual General Meeting in May 2025 to buy back own shares up to a maximum of 10% of the share capital. This buyback is based on and in line with the existing buyback policy, that any future free cash flow from the industrial business, (as available post potential small-scale M&A) generated beyond the approximately 40% dividend payout ratio of Group Net Income, shall be used to fund share buybacks with the purpose of redeeming shares.   

Outlook 

The Mercedes-Benz Group expects Group revenue in 2025 to be slightly below the prior-year level. In a market environment that remains challenging, Group EBIT is expected to be significantly below the previous year’s level resulting out of divisional guidances. Group free cash flow from the industrial business is seen significantly below the strong level of 2024, due to lower EBIT at Mercedes-Benz Cars and Mercedes-Benz Vans and lower CCR at Mercedes-Benz Vans. 

* The adjustments include material adjustments if they lead to significant effects in a reporting period. These material adjustments relate in particular to legal proceedings and related measures, restructuring measures and M&A transactions.