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Mercedes; Results Above Expectations But Any Tightening Tempered By Buyback

CONSUMER CYCLICALS

Mercedes (MBG GY) reported 4Q23 results this morning which were ahead of consensus alongside solid guidance for FY24. FCF generation is good but there’s a EUR3bn equity buyback which likely means this is a spread neutral event, in our view.


  • Key credit metrics: FCF was strong in the period (+39% y/y) and highest quarter of the year. The industrial business (ex-financing) saw net cash rise 19% y/y and a EUR3bn buyback has been announced.
  • Revenues beat consensus by 4% (mostly in cars) but were 2% lower y/y (due to N America). Adjusted operating profit is 2-3% better than expected and net income over 10% better (but still 20% lower y/y).
  • Outlook: revenues in FY24 are seen as flat (in line with consensus) and EBIT set to be “slightly below” whereas consensus infers a drop as much as 10% so there’s an upgrade in here.

Conf call started at 0800 (London) at https://group.mercedes-benz.com/investors/reports-news/annual-reports/2023/

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