Financial Data and Key Metrics Changes - The company reported stable revenues with group EBIT at 4.8% and solid cash flow at 2.3% [8][17] - Year-to-date revenues increased by 3%, while average selling price (ASP) remained almost flat year-over-year [17] - The net income level (NIL) reached 28.5, up from 26 at the beginning of the quarter [32] Business Line Data and Key Metrics Changes - Car sales totaled 511,000 units in Q3, a 2% increase year-to-date, but a 5% volume loss in the quarter due to supply constraints [11][12] - The Maybach sales increased by 26% and E-Class sales rose by 11% in the quarter [8] - The electric vehicle (EV) share reached 20% on the battery electric vehicle (BEV) side, with a 66% increase in EV sales [15] Market Data and Key Metrics Changes - Sales in China were lower year-on-year, but there was a positive quarter-over-quarter trend [12] - The S-Class maintained over 50% market share in China, with a 9% year-over-year increase [14] - The company ranked number one in customer experience satisfaction in China according to J.D. POWER [16] Company Strategy and Development Direction - The company is focusing on value over volume in a competitive market, particularly in the top-end segment [12] - The GLC and E-Class ramp-up is constrained by 48-volt supply issues, impacting overall sales [35] - The company aims to maintain its leadership position in the top-end segment while navigating supply chain challenges [39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a subdued market environment with intensified competition and high inflation [7] - The company expects to continue facing supply chain-related costs and inflationary pressures in the near term [45][58] - Despite challenges, management remains optimistic about sales recovery in 2024, particularly for the GLC and E-Class [44][51] Other Important Information - The company confirmed its full-year guidance for return on sales adjusted at 12% to 14%, now leaning towards the lower half of this range [36] - The company is progressing well with its share buyback program, having repurchased approximately €1.3 billion worth of shares [32] Q&A Session Summary Question: Will the 48-volt supply issues provide volume catch-up opportunities in 2024? - Management expects positive momentum from the ramp-up of GLC and E-Class in 2024, which should support sales and margin evolution [44] Question: What does the current environment mean for 2024 margins and cash allocation? - Management indicated that while the EV space is competitive, they are confident in maintaining margins and will continue to evaluate capital allocation strategies [49][52] Question: How much of the Q3 issues are short-term glitches versus ongoing challenges? - Management clarified that supply chain-related costs are the main reason for margin evolution in Q3, and they expect elevated costs to continue into Q4 [57] Question: What is the outlook for order intake and inventory levels? - Order intake is trending positively, particularly for GLC e-cars, and management expects to see momentum in order intake once supply constraints are resolved [74] Question: How is the agency model impacting pricing and dealer satisfaction? - Management reported favorable impacts from the agency model on pricing and net pricing, contributing positively to margin performance [78]
Mercedes-Benz(MBGYY) - 2023 Q3 - Earnings Call Transcript