Mercedes 2024: Leaner, faster, more powerful – biggest product offensive | Harald Wilhelm speaks

Thank you, Markus. It's incredible, isn't it? You know what this means for the numbers: everything we've heard so far meets on the cost side. Before we discuss that, I want to show you this chart — it includes the assumptions we use for the future. You can see for yourselves, but overall we are very cautious on macro and market developments, which will be reflected in our outlook. Unit sales in Europe: we expect solid dynamics; the US: a more restrained outlook; China: great uncertainty due to tariffs. Now I want to go in medias res and talk about what this product fireworks portfolio means for our sales mix. In 2024 we had just under 2 million units. For 2025 we will forecast more cautiously based on what was said this morning, but by 2027 this incredible portfolio should generate a new dynamic. I firmly believe that. For the top-end, we're talking about shares in the range of 14–15%. The S-Class upgrade is a strong driver, as Ola said, and also AMG — you saw the beautiful vehicles yesterday. The share of xEVs should rise to 20% with the CLA and MMA, especially when the new electric GLC and C-Class roll out. We expect that share to exceed 30% by 2027, depending on market conditions, infrastructure, and customer needs. Looking at the top line, we saw a CAGR of over 2.5% between 2019 and 2024 despite challenges. Our ASP is driven by strong pricing, although the environment is very competitive. We remain disciplined on price. For 2025 and 2026, revenue cannot be separated from volume, but 2027 will be a big year. On margins: our top-end cult products have very high quality and margins — about 280,000 units in 2024 contributed over 40% to the vehicle contribution margin. With AMG EA, the S-Class, and others, we can exceed 300,000. The core business, with over a million units including the E-Class, contributes around 40% to total contribution. The entry-level segment (about 500,000 units with CLA/MMA) also has a healthy margin. On electrification: EVs must be as good as ICE vehicles — I am 200% convinced they will be, and you will experience them this afternoon. The margin gap cannot be closed on pricing; we need the right product and cost control. We are reducing EV costs by more than previous generations to close that gap. Meanwhile, ICE vehicles will be around longer, which is good for margin security. Investment focus: 70% goes to top-end and core, and that trend will intensify. For next-level performance (NLP), we are adjusting industrial capacity. From 2019 to 2024 we built up about 2.5 million units of capacity; in the future we will adapt to 2.0–2.5 million, including 100,000 fewer units in Germany, a shift to Kecskemét (200,000 units), ending GLB in Mexico by end-2026, options in China, and selling the plant in Argentina. No plant closures in Germany; we will cap capacity at 300,000 per plant using employee attrition and temporary workers. Production costs: we reduced them by 10% from 2022 to 2024, aim for another 10% by 2027, and want to double that by the end of the decade. Key levers include moving east (Kecskemét has 70% lower factor costs), reducing headcount, using shifts, AI, digital twins, logistics optimization, and renewable energy. For geopolitical risk, we pursue 'local for local' — increasing from 60% to 70% by 2027 via localization in China and the US. In the US, Tuscaloosa produces SUVs (250k–300k units); two-thirds are exported, so the trade balance is balanced. We will export top-end SUVs to China and core SUVs to Europe from the US. Europe is the home of top-end vehicles, 80% of market served locally. From China, BBAC serves 80% of the market locally, and we will localize the long-wheelbase GLC by mid-2026; no exports from China. Material costs: target 8% reduction by 2027 through the 'Beat' program with suppliers, a 30% battery cost reduction per kWh with MMA, flexible supplier contracts for one-time costs, and non-production material savings (€20 billion). On investments: we are very disciplined. From 2019 to 2024 we achieved a 10% reduction before inflation. In 2025 investment will rise by about €1 billion due to new product launches, peak in 2026, then drop to 10% below 2024 levels (20% below 2019) by 2027. Fixed costs: we targeted a 20% reduction 2019–2025 and achieved 19% by 2024 despite inflation of 20%+ in Europe and 30%+ globally. Next target: another 10% reduction via active headcount reduction, outsourcing, streamlining functions (mobility and car sales integration, selling dealer operations in Germany), reducing management layers, standardization, digitalization, and generative AI. In China, we have 50%+ market share in the top-end market (over €1.5 million RMB) and are number one in the market above 800,000 RMB, with AMG number one. The S-Class sells 2–3x more than competitors, and we have the highest average MSRP and lowest discounts among premium OEMs. We will defend our top-end position and protect profit pools through local production with BBAC, which still delivers 15% return on sales despite lower contributions in 2024. We will restructure BBAC to maintain double-digit margins with a comprehensive program: material cost >10% reduction, variable and fixed costs both down 20%, dealer network optimization, GLA localization, and expanded R&D for China-fit products. For the financial framework: we see a volatile environment, so no weather forecast — back to facts. We have a clear roadmap to double-digit margins, driven by the product firework in 2027. The strongest lever is NLP (cost and efficiency). Our guidance excludes incremental tariffs. On cash: we generated over €30 billion in industrial free cash flow from 2019 to 2024, returned about €30 billion in dividends and buybacks, and achieved total shareholder return of 100% — €100 invested in 2019 would be €200 today. Net industrial liquidity rose from €11 billion to €31 billion. For capital allocation: dividend payout is 41% of underlying, we will continue share buybacks with a new program of up to €5 billion over two years starting May 2025 (subject to AGM approval), supported by cash generation and monetization of our non-strategic Daimler Truck stake (up 30%+ since spin-off). Our equity story: Mercedes-Benz is the perfect mix of luxury and high-performance technology, the most valuable automotive brand with iconic products that appeal both cognitively and emotionally. Our Swabian approach to costs and investments underpins the roadmap to double-digit margins, a solid balance sheet with €30 billion in liquidity, and a benchmark capital allocation framework.