Mercedes-Benz Group AG

Mercedes-Benz reported Q2 revenue of EUR 32 billion, slightly below last year, and reported EBIT of EUR 1.5 billion, which management said was 22% above last year. Group adjusted EBIT was EUR 2.3 billion. Cars delivered around EUR 900 million adjusted EBIT and a 4% adjusted return on sales; Vans delivered around EUR 450 million adjusted EBIT and a 10.2% adjusted return on sales; Financial Services adjusted EBIT rose 70% to close to EUR 500 million with a 15.3% adjusted return on sales. Free cash flow was EUR 1.1 billion, and net industrial liquidity ended at EUR 30 billion. For full-year guidance, Mercedes-Benz now expects Cars sales slightly below 2025 levels, raises xEV share guidance to 23% to 25%, keeps Cars adjusted return on sales at 3% to 5% but expects the lower half of the range, leaves Vans return on sales guidance at 8% to 10%, raises Financial Services return on equity guidance to 12% to 14%, and continues to see group EBIT significantly above the prior year with industrial free cash flow slightly below prior year.

Ola Kallenius said the quarter showed Mercedes-Benz can adapt and execute in a difficult environment, pointing to product launches, MB.OS progress, and new powertrain development as evidence the company is building for the next phase. He emphasized that China remains strategically important despite intense competition, and said the company will stay committed there through localization, partnerships, and a long-term view. His tone was confident but disciplined, repeatedly stressing strong products, productivity, and cost competitiveness rather than volume at any price.

Harald Wilhelm focused on the quarter’s financial resilience and the China-related pressure on results. He cited Cars adjusted EBIT of around EUR 900 million, Vans at around EUR 450 million, MBFS adjusted EBIT close to EUR 500 million, and group adjusted EBIT of EUR 2.3 billion before adjustments; he also explained that the China valuation charges were non-cash and reflected lower expected future profit contribution from the joint ventures. On cash, he highlighted EUR 1.1 billion of free cash flow in Q2, EUR 3 billion of H1 cash generation, EUR 3.3 billion of dividend paid, EUR 1.7 billion of share buybacks in H1, and EUR 30 billion of net industrial liquidity; he also confirmed up to EUR 1 billion of additional buybacks to be completed before AGM 2027.

Analysts focused heavily on China impairment charges, whether they signal a strategic reset, and whether they could become cash relevant; management said the charges are a non-cash accounting response to weaker market conditions, not a change in strategy, and that Mercedes remains committed to China for the long term. Questions also centered on U.S. localization, German cost competitiveness, and the split between organic cash generation and M&A-driven cash returns; management said engine localization in the U.S. is still undecided, Germany needs a productivity push, and the company sees EUR 6 billion of total cash generation as possible this year with a larger M&A contribution. On shareholder returns, Harald said the company will continue to use the “full tool set,” including market sales of Daimler Truck shares and potentially an ABB, while keeping options open on timing and format.