Mercedes-Benz Group Cuts Full-Year Outlook, Citing Macroeconomic Deterioration — Update
By Connor Hart
Mercedes-Benz Group lowered its full-year outlook, a move it said was triggered by the further deterioration of the macroeconomic environment, specifically in China.
The German luxury car brand on Thursday said its cars unit is now expected to post an adjusted return on sales between 7.5% and 8.5%, down from a prior outlook between 10% and 11%, for the year. This outlook implies an expected adjusted return on sales of around 6% for the second half of the year, it said.
Last month, Mercedes-Benz posted a 13% drop in new-car registrations in the European Union.
In China, sales have been hurt, as gross domestic product growth loses momentum amid weaker consumption, and the real-estate sector continues its downturn, the company said.
"Overall, the sales mix in the second half of 2024 is expected to remain unchanged versus the first half, and therefore weaker than originally expected," it said, adding it will continue its dynamic pricing in the back half of the year.
For the year, Mercedes-Benz guided for its earnings before interest and taxes to be significantly below the prior year's level, compared with a previous outlook that called for them to come in slightly below last year's levels.
Free cash flow from the company's industrial business is now expected to come in significantly below the prior-year level, compared with prior guidance that it would be slightly below last year's figures.
Mercedes-Benz backed its van unit's expected adjusted return on sales of between 14% and 15%, as well as its mobility unit's expected adjusted return on equity of 8.5% to 9.5%.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
September 19, 2024 16:04 ET (20:04 GMT)
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