Mercedes Benz (ETR:MBGn) announced an update to their financial year guidance ahead of schedule last night. The impressive results this quarter are primarily due to the profit margins from Vans and the industrial banking free cash flow. This morning, further details were disclosed about pricing and unit sales. However, market attention is expected to center on the company's projections for the second half of the year.
Mercedes-Benz's industrial FCF is now forecasted to be 'slightly above' (+10% to +25%) last year's figure of €8.1 billion (€1 = $1.1129). The company has also revised its EBIT forecast for the Group, which is now projected to be roughly equal (-5% to +5%) to last year's €20.5B result. Likewise, the profit margin guidance for the vans division has been elevated from the prior 11% to 13% range to a new 13% to 15% range. This increase reflects the strong net price effects on the first half-year's margins.
Bernstein analysts wrote in a note, “The rate of sales for H2/23 is expected to remain at approximately the same level as H1.” Noting that full year volumes should come in largely in-line with last year's and land around the 2M unit mark.
“Crucially, Q2's sequential volume growth of 2.4% is nearly entirely driven by an acceleration in US sales,” they added.