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Mercedes-Benz beats profit forecast as EV sales surge

Randy Mancini 3 Feb 11
A logo of Mercedes-Benz is seen outside a Mercedes-Benz car dealer, amid the coronavirus disease (COVID-19) outbreak in Brussels
FILE PHOTO: A logo of Mercedes-Benz is seen outside a Mercedes-Benz car dealer, amid the coronavirus disease (COVID-19) outbreak in Brussels, Belgium May 28, 2020. REUTERS/Yves Herman

February 11, 2022

By Victoria Waldersee

BERLIN (Reuters) – Mercedes-Benz Cars & Vans expects an adjusted EBIT of 14 billion euros ($15.94 billion) in 2021, it said in preliminary results released on Friday, as it focuses on selling more higher value electric vehicles.

The luxury carmaker predicted an adjusted return on sales of 12.7% in the full year, beating its own guidance of 10-12% as the jump in EV sales made up for supply chain troubles.

Its share price rose to 71.12 euros by 0859 GMT, up from 69.01 euros when markets opened.

Data released by Mercedes-Benz last month showed sales of battery-electric vehicles grew over 90% in 2021 even as total sales fell 5%, as the carmaker prioritised higher-value cars in the face of semiconductor shortages.

Its CEO Ola Kaellenius has said on multiple occasions the carmaker’s aim was to boost profitability rather than focus exclusively on unit sales, as the company strives to raise its valuation on the stock market after splitting from Daimler Truck in December last year.

“Our good results are the outcome of highly sought-after products and the focus on profitable growth and cost discipline,” Kaellenius said in a statement.

The fourth quarter saw an adjusted return on sales of 15%, the company said on Friday, with profitability boosted by “solid net pricing, good product mix and favourable used car performance.”

Mercedes-Benz expects the deconsolidation from Daimler Truck to boost its EBIT by 9 to 10 billion euros.

Mercedes-Benz is due to report full-year results on Feb. 24.

($1 = 0.8783 euros)

(Reporting by Victoria Waldersee; Editing by Paul Carrel and Elaine Hardcastle)