Q4 2025 Mercedes-Benz Group AG Earnings Call Presentation

February 12, 2026

Okay.

[music].

Christina Schenck: Good morning, ladies and gentlemen, and welcome to the Annual Results Conference 2025 of Mercedes-Benz. We welcome our guests here on site with us in Sindelfingen, and those of you joining us via the live stream. My name is Christina Schenk, and I'm responsible for investor relations, digital, and communications.

Good morning, ladies and gentlemen, and welcome to the annual results Conference 2025 off Mercedes Benz, We welcome our guests the onsite with our friends in their thinking and also have you joining us via the Lifestream. My name is Christina Cheng and I'm responsible for Investor Relations digital and communications.

Good morning, everybody also from my side My name is fit them stated and I'm heading corporate communications at Mercedes Benz. Thank you very much for joining us today for the events to reflect on the posture as well as to take an outlook on the yes to come here on site and if anything as well as on the lifestream.

Willem Spelten: Good morning, everybody, also from my side. My name is Wilhelm Spelten. I'm heading corporate communications at Mercedes-Benz. Thank you very much for joining us today for this event, to reflect on the past year, as well as to take an outlook on the years to come here on site in Sindelfingen, as well as on the live stream.

Christina Schenck: We have a four-hour program ahead of us, divided into three parts: the annual results conference, a capital market update, and of course, a Q&A. You can follow the stream with simultaneous translation into German and Chinese, and of course, for all of you on site, you can also access a German and Chinese translation on channel one and channel three.

We have a full hour program ahead of us are divided into three parts. The annual results conference a capital market update and of course, our Q&A you can follow the stream with simultaneous translation into German and Chinese and of course for all of you on site. You can also access a German and Chinese translation on channel one.

And channels right.

Willem Spelten: This session is broadcasted on our corporate website. It will end after the Q&A session, approximately at 11:45 Stuttgart time today. We will now start with the first part, the actual annual results conference, and our CEO, Ola Källenius.

And deficient as broadcasters in all corporate website. It will end after the Q&A session. Approximately at 11 45 start got time today.

And we will now start with the first part the extra Edwards with its contracts and our C O without colonial.

Okay.

Yes.

Good morning, everybody and welcome to this <unk> 'twenty 'twenty six annual results conference. We're looking forward to sharing with you today.

Ola Källenius: Good morning, everybody, and welcome to this 2026 Annual Results Conference. We're looking forward to sharing with you today our numbers and what happened at Mercedes-Benz in 2025. But right after this first presentation, more importantly, what's our game plan, what are we doing, and how do we see the next year for Mercedes-Benz develop? But if we start by reflecting a bit on 2025, yes, it is true that the auto industry and our company, we're in a once-in-a-100-year transformation, going towards zero emission, going towards fully digitalized intelligent products like this S-Class that is standing right next to me here. But it's happening in an environment that is dynamic, more dynamic than we have experienced in many, many years.

Our numbers and what happened at Mercedes Benz in 2025, but right. After this first presentation at more importantly.

What's our game plan what are we doing.

How do we see the next year for Mercedes Benz develop.

But if we start by reflecting a bit on 2025, yes. It is true that the auto industry and our company Marine a once in 100 years transformation going towards zero emission going towards fully digitalized intelligent products like this S class that is standing right next to me here, but it is happening.

In an environment that is dynamic more dynamic than we have experienced in many many years, maybe the main topic.

Ola Källenius: Maybe the main topic that the debate centered around in 2025 was tariffs and trade relationships, but it's not the only thing that is going on in the environment, which means flexibility and agility is key to master this transformation in the current circumstances. So what did we focus on in 2025? First and foremost, innovation, technology, and preparing the biggest product launch offensive in the history of the company, where we launched the first of 40 models that are coming in the space of 3 years. Why was this so important for Mercedes-Benz in 2025? We have been working for 4 or 5 years to build technology platforms, and we're going to dig deeper into this in the strategy update that follows right after this annual results conference.

The debate centered around in 2025 was tariffs and trade relationships, but it's not the only thing that is going on in the environment, which means.

Flexibility and agility is key to master this transformation in the current.

Circumstances.

So what did we focus on in 2025.

First and foremost innovation technology and preparing the biggest product launch offensive in the history of the company, where we launched the first of 40 models that are coming in the space.

Three years.

Why was this so important for Mercedes Benz in 2025, we have been working for four or five years to build ticking up technology platforms and.

And we're going to dig deeper into this in the strategy update that follows right. After this annual results conference and it is about a comprehensive next generation powertrain portfolio.

Ola Källenius: It is about a comprehensive next generation powertrain portfolio, needless to say, on the electrical side, but also on the electrified, high tech combustion side. But maybe the bigger revolution on technology is to replace the brain and the central nervous system of the vehicle with what we call the Mercedes-Benz Operating System. And within a very short period of time, we're going to proliferate this technology throughout our whole portfolio. And we started, and launching with the CLA, that won Car of the Year, was the safest car tested by Euro NCAP in 2025. Of the established manufacturers, either we were the first or at least one of the first to launch a software-defined vehicle.

Needless to say on the electrical side, but also on the electrified hi, Tec combustion side.

But maybe the bigger revolution on technology is to replace the brain in the central nervous system of the vehicle with what we call the Mercedes Benz operating system and.

And within a very short period of time, we're going to proliferate this technology throughout our whole portfolio.

And we started and launching with the CLA that one car of the year was safest car tested by Euro and cap in 2025.

Of the established manufacturers.

We were the first or at least one of the first to launch a software defined vehicle.

Ola Källenius: While all of that is going on, of course, in the market conditions that we're operating in, we're managing the go-to market thoughtfully and keep an eye on the ball when it comes to cost efficiencies and capital return to our shareholders. Harald will get into that in more detail. But if you look at the numbers, what is the effect? Within adjusted EBIT of EUR 8.2 billion for the group, as you can see, these market conditions are reflected in our results.

While all of that is going on of course in the market conditions that we're operating in.

We're managing the go to market thoughtfully.

And keep an eye on the ball when it comes to cost efficiencies and capital returned to our shareholders how L will get into that.

In more detail.

But if you look at the numbers what is the effect.

Within adjusted EBIT of 8.2 billion Euro for the group as you can see these market conditions are reflected in our results.

Ola Källenius: We also took the opportunity in 2025 to make the organization leaner and more streamlined, and also not just rejuvenate our management with next gen talent, but also make the management team smaller, leaner, flatter, and more impactful, which is what is mainly reflected in the difference between the adjusted number and the reported number. I want to highlight two numbers on this chart. On the one hand, the EUR 5.4 billion free cash flow. For many years in a row, we have been a very solid producer of free cash flow, and we have returned free cash flow to our shareholders in those years at an amount which is unprecedented in the history of this company.

We also took the opportunity in 2025 to make the organization leaner and more streamlined and also not just rejuvenate our management with Nextgen talent.

But also make the management team.

Smaller leaner flatter and more impactful, which is what is mainly reflected in the difference between the adjusted number in the reported number.

I want to highlight two numbers on this chart.

On the one hand, the 5.4 billion euro free cash flow.

For many years in a row, we have been a very solid producer of free cash flow.

And we have returned free cash flow to our shareholders in those years.

At an amount.

Which is unprecedented in the history of this company.

And even if you look around the industry.

Ola Källenius: Even if you look around the industry, in this eventful 2025, that EUR 5.4 billion stands out as one of the most solid numbers on cash flow production of any car company. In spite of handing the cash back to the shareholders, after we have done everything else, funded our incredible product launch, technology, and innovation plan, our net industrial liquidity remains above EUR 30 billion. So we have a rock solid balance sheet, a rock solid balance sheet to take on the next phase of transformation, which will be intense in the next few years, but we can do that from a position of strength. If you look on the sales side, the reduction in sales is mainly down to managing the fierce competition in China.

In this eventful 2025 that 5.4 billion stands out as one of the most solid numbers on cash flow production of any car company.

And in spite of handing the cash back to the shareholders. After we have done everything else funded our incredible product launch in technology and innovation plan.

Our net industrial liquidity remains above $30 billion.

So we have a rock solid balance sheet, the rock solid balance sheet to take on the next phase of transformation, which will be intense in the next few years, but we can do that from a position of strength.

If you look on the sales side the reduction in sales is mainly down to managing the fierce competition in China. So that is where you will find the major part of that reduction where we don't go for market share at all cost our head of China, all over China will talk more about.

Ola Källenius: So that is where you will find, the major part of that reduction, where we don't go for market share at all cost, and, our head of China, Oliver Thöne, will talk more about that in the, capital markets update after this presentation. And yes, because these are wholesale figures, we made some, I would call it, tactical management of our wholesale numbers in the United States in, 2025. I don't think it's surprising with a, a tariff, level that was, you know, at different, numbers throughout the year. If you would put on the retail numbers here, of course, it would be a little bit better picture, but I think we managed that in the smartest possible way. On the top-end vehicle side, a very solid 15% share of overall sales.

That in the.

Our capital markets update after this presentation.

And yes, because these are wholesale figures, we made some I would call it technical management of our wholesale numbers in the United States in 2025, I don't think it's surprising with.

Tariff level that was.

Different.

Numbers throughout the year.

If you would put on the retail numbers here of course, it would be a little bit better picture, but I think we managed that and the smartest possible way.

On the top end vehicle side, a very solid 15% share of overall sales.

Ola Källenius: Banner year for the G, record with a very solid sales across the world, and also the electric G. If you look at an electric vehicle in that price class, the most sold electric vehicle by a wide margin in that price class around the world. So for the fans that have taken the step into the next gen, they're blown away by what that vehicle can do. Solid Maybach year. AMG is readying an enormous production of a product offensive that is coming in the next years, mainly unfolding in 27 and forward. We'll get to that later. And yes, S-Class and GLS, they are now at the end of this stage of the life cycle. This car that we presented only a couple of years ago at our 104th year anniversary is like a whole new S-Class-...

Banner year for the G record with a very solid sales across the world and also the electric G. If you look at the in electric vehicle and that price class. The most told electric vehicle by a wide margin and that price class around the world. So.

So for the fans that have taken the step into the next gen.

They are blown away by what that vehicle can do solid my Buck ear AMG is readying.

An enormous production of product defensive that is coming in the next years, mainly unfolding in 27 and forward, we'll get to that later and yes S class Ngls.

They are now at the end of this stage of the lifecycle. These car that we presented only a couple of years ago at 100 of FERC fourth year anniversary.

Is like a whole new S class technically speaking it is a refresh during the lifecycle, but if you if you update more than half of the cars of the car 2007 hundred parts. It is a new car.

Ola Källenius: Technically speaking, it is a refresh during the life cycle, but if you, if you update more than half of the car's 2,700 parts, it is a new car. And the same happens to the GLS this year as well. So we have a run-out scenario and then a run-up scenario of those very important vehicle in the top-end portfolio. With regard to electrified vehicles, even though every single combustion vehicle in our portfolio is also electrified with a potent 48-volt system, mild hybrid, we stayed at roughly the 20% xEV. Not surprisingly, we have ambitious growth plans for this coming, with the main focus being on BEV.

And the same happens to the G. L S.

This year as well so we have a run off scenario and then a run up scenario of those very important vehicle in the top end portfolio.

With regard to <unk>.

Electrified vehicles.

Even though every single combustion vehicle and our portfolio is also electrified.

With a potent 48 volt system mild hybrid.

We stayed at roughly the 20% X C b.

Not surprisingly we have ambitious growth plans for this coming.

With the main focus being on BV.

Ola Källenius: More about that later, but now I would like to hand over to Harald to give us a deeper dive into the numbers. Harald, please.

More about that later, but now I would like to hand over to Harold to give us the deeper dive into the numbers Harold please.

Okay.

Yes, Thank you Laura and Hello, everybody very happy to take you. So yes quite a lot of numbers, but I think that are important to understand what's happening I mean behind that.

Harald Wilhelm: Yeah, thank you, Ola, and hello, everybody. Very happy to take you. So, yeah, quite a lot of numbers, but I think are very important to understand what's happening, I mean, behind that. Well, Ola talked already through the sales numbers for cars, so if we look on the revenue side of things, obviously, that follows the sales evolution. If you look a bit on the ASP evolution, you can see obviously that 2025 was a market environment, a very competitive market environment, but also an environment with outwards FX effects. That's what you can see reflected in the revenue evolution. If you look on the profit side, EUR 4.8 billion adjusted EBIT on cars and a EUR 5.5 billion on cash flow.

Well, all I talk already through the sales numbers for cars. So if we look on the revenue side of things obviously that follows the sales evolution. If you look a bit on the E. S. P. Evolution you can see obviously that 2025 was a.

Market environment, a very competitive market environment, but also an environment with Edwards FX effects. That's what you can see reflected in the revenue evolution. If you look on the profit side $4 8 billion adjusted EBIT on cars and a five and a half on cash flow, let's dig into that a bit more in depth what is behind.

Harald Wilhelm: Let's dig into that a bit more in depth, what is behind it. So looking on this chart, well, what can you see? In summary, I would say quite a lot of macro and market headwinds in 2025, but significantly mitigated by efficiency work. Let's go a bit more in detail into the bridge, but I try to simplify it a bit. If you look at what is behind that evolution of 8 from 2024 to 5 in 2025, 2.5% ROS dilution coming from tariffs and FX. Volume, structure, pricing, and product-related measures had an impact of a minus 4. Raw mats, favorable by 0.5.

Find it.

So looking on this chart well what can you see.

In summary, I would say.

Quite a lot of Mako and the market headwinds in 2025, but.

<unk> mitigated by efficiency work.

Let's go a bit more detail into the bridge, but I try to simplify it a bit.

If you look at what is behind that of reducing of eight from 'twenty to 'twenty four to five in 2025.

2.5% Ros dilution coming from tariffs and FX.

Volume structure pricing and product related measures had an impact of a minus four.

Raw mats favorable by <unk> <unk> five.

Efficiencies more than suite, 3.3% efficiencies in one year for material operations SG&A and all other cost elements.

Harald Wilhelm: Efficiencies, more than 3.3% efficiencies in one year for material operations, SG&A, and all other cost elements, and a BBAC headwind of 0.3. What does it mean altogether? If you look at the sum of cost measures and improvements, they fully compensate the market evolution, and it leaves us with the FX and the tariffs, basically with a 2.5 down. So that's what happened in 2025. A word maybe on the Q4, some of you already may reverse calculate and look at the fourth quarter and might wonder, I mean, whoops, what happened over there? Yes, you see a 2.6% return on sales adjusted for cars. The fourth quarter came in in line with the expectations, slightly higher deliveries, sales, cost phasing, ramping up towards the end of the year.

And the BVA see headwind of Oh point suite.

What does it mean altogether.

If you look at the sum of cost measures and improvements they fully compensate the market.

Evolution.

And it leaves us with the FX and the terrorist basically it was a two and a half down so that's what happened in 2025.

Yeah.

Where that maybe on the Q4 some of you already may reverse calculate and look at the fourth quarter and might wonder I mean looks what happened over there yes, you see a two 6% return on sales adjusted for cars.

The fourth quarter came in inline with the expectations slightly higher deliveries sales.

Cost phasing ramping up towards the end of the year a bit traditional but also some supply of one time.

Harald Wilhelm: A bit traditional, but also some supplier. One time included fixed cost capitalization as we reduced the stock level. But then on top, in Q4, we had to accrue for a warranty-related measure, which is a three-digit million EUR number sitting in that 2.6, which probably you cannot take as a run rate moving forward. So please, important to note in this respect. Now, let's have a look at the cash flow for cars in 2025. We had a favorable support from working capital in here, lower inventories, but also lower receivables due to a lower sales volume. But then let me emphasize the investment side of things, which we see here. Clearly, 2025 marks the peak of investments for cars.

Included.

Fixed cost capitalization as we've reduced the stock level.

Then on top of in the fourth quarter, we had to accrual for warranty related measure, which is a sweet digit million number sitting in that 2.6, which probably you cannot take as a run rate moving forward. So please the important to note in this respect.

Now, let's have a look at the cash flow for cars in 2025.

We had a favorable support from working capital in Maine here.

Lower inventories, but also lower receivables.

Due to our lower sales volume, but then let me emphasize the investment side of things <unk> see here clearly 2025 marks the peak of investments for cars.

Harald Wilhelm: That's why may not the net investments exceed the depreciation, as you can see here on the chart. All in all, the investments, if you take the PPE and the R&D, are at EUR 12.7 billion in 2025, compared to EUR 12.1 billion in 2024. So yes, we went up, but probably a bit less than what we said at the beginning of the year. But clearly, this is the peak, and from now on, that will decline. More on that a bit later. Then on the other line, I think you have the stuff you know, the BBAC and equity dividend reversal, and the non-cash effects related to the NLPs, the personnel cost reduction measures, dealer provision, and the like. So now, let's have a look at the van side of things.

And that's why it may not the net investments exceed the depreciation as you can see here on the chart oil and all the investments if you take the PPE and the R&D are at $12 7 billion Euro in 2025 compared to a $12. One in 2024. So yes, we went up.

<unk>, but probably a bit less than what we said at the beginning of the year, but clearly this is the peak and from now on that will decline more on that a bit later.

Then on the other line I think you have the stuff you know the BBA see at equity dividend reversal.

And the noncash effects related to the <unk> PS the personal cost reduction measures dealer provision and the like.

So now let's have a look at the van side of things.

Harald Wilhelm: Before I go into the numbers, maybe some of the business highlights. We started the year in vans, with the divestment of the vans operations in Argentina, adjusting the industrial footprint meant over there. Well, very happy. Some of you could see, very intense year to prepare for the van, the new van architecture coming up, the van VLE, and the van VLS. And I think, I was super excited to reveal that in a not too distant future. So this ushers into a new era, on the van side, and that was a very important year to progress in that direction.

Before I go into the numbers, maybe some of the business highlights. It started we started the year advance by the divestment of the vans operations in Argentina, adjusting the industrial footprint demand over there.

Well.

Very happy some of you could see.

A very intense year to prepare.

For the van the new van architecture coming up the van.

<unk> E and the van VNS and I think of a super excited to reveal that in a not too distant future. So this ashes into a new era.

On the van side and that was a very important year to progress in that direction.

Harald Wilhelm: Looking on the business evolution and on the van side, 359,000 units in a competitive market environment in Europe, especially, I mean, in the fleet business, and also in the US. The electric vans increased by 46% to an 8% xEV share, with improved availability of vehicles on the EV van side. Revenues are in line with the sales on the EBIT and the cash flow side. Let's have a look into that, I mean, as I think these are quite respectable numbers given these market circumstances.

Looking on the business evolution on the van side.

359000 units.

In a competitive market environment in Europe, especially in the fleet business.

And also in the U S. The electric vans increased by 46% to an 8% ex EV share.

With improved availability of vehicles on the <unk>.

EV than site revenues are in line with the sales on the EBIT and the cash flow side, let's have a look into that I mean as I think these are quite respectable numbers in given these market circumstances in other words 1.81 billion of EBIT adjusted.

Harald Wilhelm: In other words, EUR 1.8 billion of EBIT adjusted on the van side, which is a 10.2% return on sales, I mean, adjusted, which is, to my understanding and knowledge, a benchmark number, for that type of business in that type of market circumstances. How did we get there? Volume, structure, pricing. Net was -4% in 2025, with sales and pricing negative, but the mix being favorable. Then we had FX headwinds as well on the van side, but basically we compensated by industrial performance. Let's have a look at the cash flow side in the vans. Here, clearly, what I said before, the emphasis, the investment, into the new van platform, marks, I think, the highlight of that chart.

On the van side, which is a 10.2.

Thus and returned on salesmen, adjusted which to my understanding and knowledge is a benchmark number for.

For that type of business in that type of market circumstances, how did we get there volume structure pricing net was a five 4% minus in 2025 with sales and pricing negative that the mix of being favorable than we had FX headwinds as well on the van side.

But basically we compensated by industrial performance.

Let's have a look at the cash flow side and the Vance.

Here clearly what I said before the emphasis of the investment into the new.

And then.

Platform Mark So I think the highlight of that chart so significantly.

Harald Wilhelm: So, a significant level of investment into that platform on the EV side, but also on the combustion side. And it means nothing else, as we, at the same time, ready the industrial side of things, with ramp up in Vitoria, but then also in Eastern Europe, in our Jawor plant, that it's nothing else than preparing the van business for the next decade to come with that type of investment. So on the cash flow side, now back on the cash flow side here, a bit of working capital support, as well as in the other bucket, a bit similar, like the provisioning I mentioned on the car side. Then let's turn to financial services.

Significant level of invest into that platform on the EV side, but also on the combustion side and it means nothing else.

As we at the same time, we ready the industrial side of things with the ramp up and in Victoria, But then also in eastern Europe in our yard war plan that with nothing else than preparing the van.

The business for the next decade to come with that type of investments.

So on the cash flow side or back on the cash flow side here.

Bit of a broken capital support.

As well as in the other bucket a bit similar like the provisioning I mentioned on the cost side.

Then, let's turn to our financial services.

Harald Wilhelm: In 2025, we reshaped Mercedes-Benz Mobility, and basically, we took the customer front end of Mercedes-Benz Mobility and merged it and combined it with the cars sales organization into one customer unit. Matthias is going to talk about that a bit more in depth later, and that became effective 1 January 2026. With that, we create an even more seamless customer journey and, or at the same time, also create efficiencies and synergies. Important, I think, for the financial community, the capital structure and the segment reporting does not change as a function of that structural change. At the same time, in 2025, we focused on the core business in financial services.

In 2025, we reshaped.

I see there's been some mobility and basically we took the customer front end of a Mercedes Benz mobility and merged it and combined it with the cars sales organization into one customer unit T. S is going to talk about that a bit more in depth later and that became effective agenda.

First 2026.

That will create an even more seamless customer journey and all at the same time also create.

Ifs.

Patient sees and synergies important I think for the financial community the capital structure and the segment reporting does not change as a function of that structural change at the same time in 2025, we focus on the core business in financial services.

Harald Wilhelm: If you remember the divestment from our ride hailing Free Now at the beginning of the year, and at the end of the year, the announcement that we're going to divest from Athlon. Now, looking on the business evolution side, we had a higher penetration rate in mobility in 2025. However, in that when it comes to the business volume, the portfolio, that follows the evolution on the sales side, on cars and vans. Furthermore, the portfolio is impacted also by FX effects. With this, however, the EBIT is up by 12%. Let's have a look how we got to that one. So it means a EUR 1.3 billion EBIT adjusted on the mobility or the financial services side, with a return on equity of 9.7% adjusted.

If you remember the divestment from all right hailing free now at the beginning of the year and at the end of the year. The announcement that we're going to divest from Atlanta.

Now looking on the business evolution side, we had a higher penetration rate in mobility in 2025, however in that and it comes to the business volume the portfolio that follows the evolution on the sales side on cars and vans. Furthermore, the portfolio is <unk>.

Impacted also by FX effects.

With this the however, the EBIT is up by 12%, let's have a look how we got to let one so it means a 1.3 billion EBIT adjusted on the Moon mobility or the financial services side with a return on equity of nine 7%.

Just it how did we get there.

Harald Wilhelm: How did we get there? Well, in the portfolio, we now see the margin improvement, the interest margin improvement, coming through, which we did follow already since a while and successfully been locked in on the acquisition side, and that is now going, I mean, into the portfolio margin. That is point number one. But also on the efficiency side, mobility, our financial services delivered, I think, a pretty remarkable job with a 10% of OpEx saving in one year, to help the profitability recovery that has been slightly offset or reduced by a higher cost of credit risk. And with this, I think a pretty solid year in 2025, with a positive development trajectory throughout the year. Now let's turn to the group.

Well in the portfolio, we now see the margin improvement the interest margin improvement coming through which we did follow already since a while and successfully been locked in on the acquisition side and that is now going into the portfolio margin that is point number one but also on the efficiency side.

<unk> mobility mobility, our financial services delivered I think a pretty remarkable job with a 10% of opex saving in one year two.

To help the profitability recovery that has been slightly offset or reduced by a higher cost of credit risk and with this I think I'm pretty solid year in 2025.

A positive development trajectory through out the year.

Now, let's turn to the group I explained the division side of things. So what's left is loosely the recon here I mean, you can see the equity contribution from our Daimler truck stake oil and all that means that the EBIT adjusted at the group level.

Harald Wilhelm: I explained the division side of things, so what's left is obviously the recon. Here, I mean, you can see the at-equity contribution from our Daimler Truck stake. All in all, that means the EBIT adjusted at the group level is at EUR 8.2 billion. Then on the adjustments, the most important one refers to our NLP personal cost reduction program, where all in all, we accrued EUR 1.6 billion in 2025. Many of the colleagues, I mean, will come off the payroll end 2025, beginning 2026, and therefore you will see a rather faster payback of that EUR 1.6 billion charge moving forward.

Is at 8.2 billion euro than on the adjustments are the most important one refers to our L. P personal cost reduction program, where all in all we accrued $1 6 billion in 2025.

Many of the colleagues I mean will come off the payroll.

And 25, beginning 'twenty six and therefore, you will see a rather fast payback of that $1 6 billion charge moving forward and the other one re charge Andy in the adjustments refers to the legal proceedings in the U K related to discretionary.

Harald Wilhelm: The other one, the charge in the adjustments refers to the legal proceedings in the UK related to discretionary, I mean, commission models in the past, unchanged compared to Q3. The third element is on the van side, the adjustments in the context of the divestment in Argentina I mentioned before. With that, I mean, we are the EBIT at the group level on the booked side, EBIT booked at EUR 5.8 billion. Now, over to the cash flow.

Men Commission models in the past.

Unchanged.

Compared to the third quarter and the third element is on the van side the year adjustments in the context of the divestment in Argentina I mentioned before was that I mean, we are the a bid.

At the group level on the book side, David booked at five 8 billion euros.

Now over to the cash flow.

Harald Wilhelm: We talked already about cars and vans in terms of, I mean, their contribution at the group level, I mean, lower taxes, significantly lower taxes in 2025 compared to previous year, a favorable contribution from the interest result at EUR 500 million, the truck division is sitting inside here, and that means all in all, I think, a healthy EUR 5.4 billion cash generation. On the Q4, I mean, the cash flow was slightly negative. I'm sure you observed that, but that is a function of a bit of working capital volatility in the last quarter, which is, I think, not uncommon.

We talked already about cars and vans in terms of the men their contribution at the group level the main lower Texas.

Significantly lower taxes in 2025 compared to previous year.

<unk> contribution from the interest resolved at the 500 million the trucker TV sitting inside here and that means all in all I think a healthy five 4 billion cash generation.

On the fourth quarter I mean, the cash flow was slightly negative I am sure you observed that but that is a function of a bit of a working capital volatility.

In the last quarter, which is I think are not uncommon if you.

Harald Wilhelm: If you look on the adjustment side, on the cash flow, you'll find the cash outs, the first cash outs, but the minor one on the NLPP program I referred to before, legal proceedings, and a bit on the M&A side. This one is related to the divestment of our own retail in Germany. On the net cash side, well, I explained the cash flow evolution in 2025 already, so from the beginning of the year. What else? We paid the divi of EUR 4.1 in the course of 2025. We launched a new share buyback program in fall. Actually, we got started, I mean, with it on November 1, so EUR 2 billion program over 12 months.

Look on the adjustment side on the cash flow youll find the cash outs.

The first cash outs, but the minor one on the NL P. P program I referred to before legal proceedings and a bit on the M&A side. This one is related to the divestment of our own retail in Germany.

On the net cash site Wella I explained the cash the cash flow evolution in 2025 are already so from the beginning of the year. What else are we paid the D V O $4 one in the course of 2025.

We launched a new share buyback program and fall actually we got started I mean was it on Jen on November 1st So 2 billion program over 12 months in the remaining months of the year 2025, we already did around 300 million Euro, which leaves us with 1.7 to go.

Harald Wilhelm: In the remaining months of the year 2025, we already did around EUR 300 million, which leaves us with EUR 1.7 billion to go in 2026. And with that, I think you can observe a very, very comfortable and healthy net cash position at the end of 2025 of EUR 32 billion. Now, let's close the chapter on 2025, and let's look forward on 2026. So what is ahead, I mean, here? Whenever we talk about the forward-looking statements, for sure, it's important to look at the details, the footnotes, so please have a careful look at that, at the disclaimer section in the document here. One point I'd like to emphasize is obviously, all of that deck is based on today's assumptions, also referring to the regulatory framework.

In 2026, and with that I think you can observe.

Very very comfortable and healthy net cash position at the end of 2025, or so 2 billion euro.

Now.

Let's close the chapter on 2025 and that looks forward on our 2026. So what is ahead some in here.

Whenever we talk about the forward looking statements for sure.

It's important to look at the details of the footnotes. So please have a careful look at that.

At the disclaimer section.

And the document here one point I'd like to emphasize is obviously all of that deck is based on today's assumptions also referring to the regulatory framework. If you think about the terrorists, obviously and what we also assume in these numbers with regard to tariffs is that the U S.

Harald Wilhelm: If you think about the tariffs, obviously, and what we also assume in these numbers and with regard to, to tariffs, is that the US, EU tariff, agreement, will come into effect, i.e. it will be- it will come down to zero, effective April 2026. That is the assumption which is built into here. Now, let's have a look into the division guidances. So obviously, we'll start with cars. First on the sales side, overall, we have a constructive view for 2025 when it comes to, I mean, to sales, and clearly, we target growth, growth in all of the markets, ex-China, for 2026. So what does it mean in Europe?

You tariff.

Agreement.

Will come into effect.

E. It will be it will come down to zero effective April 2026. So that is the assumption of bushes are built into here now let's have a look into the division guidance is so obviously, we'll start with cars.

First on the sales side overall, we have a constructive view for 2025 when it comes to women to sales and clearly we target gross gross in all of the markets ex China for 2020 six so what does it mean in Europe I mean, we see on the back of oils.

Harald Wilhelm: I mean, we see on the back of the very strong product launches, I mean, to come, growth momentum, growth possibility, in Europe. Same in the US, with a product momentum, with a very strong position in the top-end segment, with a 30% share of top-end in the US. I think with the products to come, it's legitimate, I mean, to go for it, as well as in the overseas and in the other markets.

The very strong product launches I mean to come.

Gross momentum gross pulp possibility in Europe, the same in the U S with a product momentum with a very strong position in the top end.

Segment, there was a 30% share of a top end in the U S. I think with our products to come so legitimate to mean to go for it.

As well as in the overseas.

Indeed in the other markets with regard to China. We also believe that in the second half of the year the product coming will generate main favorable momentum, but overall I mean in that very dynamic environment and in China, we retain a more cautious view.

Harald Wilhelm: With regard to China, we also believe that in the second half of the year, the products coming will generate, I mean, favorable momentum, but overall, I mean, in that very dynamic environment, I mean, in China, we retain a more cautious view, and that means that for China, for 2026, we expect sales to be lower than 2025 in China. Globally, however, we believe that therefore, we can keep the sales level, I mean, at about the level of 2025. Important to note in that, as we have a year of product ramp-ups, that Q1 probably will be rather, I mean, the lower in terms of, or the lowest in terms of the sales numbers, and then building the momentum throughout the year in H2.

And that means that we have for China.

For 2026, we expect our sales to be lower than 2025.

In China globally. However, we believe that therefore, we can keep the sales level at about the level of 2025.

Important to note in that is we have a year of product ramp upset at the first quarter, probably will be rather I mean, the lower in terms of the lowest in terms of the sales numbers and then building the momentum throughout the year in H two.

With regard to the mix on the top end side.

Harald Wilhelm: With regard to the mix, on the top end side, we do expect a mix of 14 to 15%. You might wonder, after 15% in 2025, why should it come down if all of these products are coming in? There's a more technical reason for that, if you want to have a deeper look into it, and that refers to the AMG side in the entry positions, where the AMG entry models transition from the current ones into the new ones, and that has an impact in 2026 on the entire, on the total top end share. On the xEV side of things, we target 21 to 23%, in terms of the xEV share, clearly driven by higher BEV volumes in 2026, with the products to come into market.

We do expect a mix of 14% to 15% you might wonder after 15% in 2025 ratio to come down if all of these products minkow coming in there's a more technical reason for that this year.

When I have a deeper look into it and that refers to the AMG side and the entry positions, where the AMG entry models main transition from the current ones I mean into the new ones and that has an impact in 2026 on the entire under total pulp and ship.

On the <unk> side of things, we target 'twenty one to 'twenty three.

Ascent in terms of the EV share clearly driven by a higher birth volumes in 2026, there was a product to come into market.

Harald Wilhelm: Whereas, I mean, on the entry side, from the predecessor of the MMA, we migrate probably from the plug-ins into the BEV, so that has an impact on the plug-in. All in all, that means a 21 to 23% xEV share for 2026. Now, obviously, the stuff you're maybe most interested in this part of the section before we turn a bit to the longer-term perspective, meaning the section to come and thereafter, the profit guidance for cars for 2026. So, if we depart from the 5% in 2025, what are the key building blocks 2026? And I think that's important to understand.

Whereas I mean on the entry side.

On the predecessor of the MMA, we migrate probably from the plug ins into the Beth So that has an impact on the plug in oil and all that means that 21% to 23% ex EV share for 2026.

Now obviously are the stuffer youre.

To be most interested in this part of the section before return a bit to the longer term perspective man Indeed section to come in the after the.

The profit guidance for cars for 'twenty.

2026, so if we depart from the 5% in 2025, what are the key building blocks 20, and 26 and.

I think that's important to understand so in 2026 re phase many of headwind from the full year run rate I mean on the tariffs and the full year run rate on the adverse FX sides and that is a 1% down.

Harald Wilhelm: So in 2026, we face, I mean, a headwind from the full year run rate, I mean, on the tariffs, and the full year run rate on the adverse FX side, and that is a 1% down, compared to 2025. Then, with the structure and the competitive pricing environment, we see a slight headwind of 0.5% in 2026. Raw mats are probably reversing. If you look at current trends, also probably 0.5% of a headwind. But then efficiencies kicking in again, maybe not at the full force of the 3% in 2025, but call it, I mean, roughly, I mean, a 2% of efficiencies net in 2026 again.

Compared to 2025.

Then.

With the structure and the competitive pricing environment we.

We see a slight headwind of <unk>, 5%.

In 2026, raw mats, probably reversing if you will if I look at the current trends also probably a <unk> 5% of a headwind.

But then efficiencies kicking in again.

Maybe not at the full force of the sleeper centre in 2020, five but call it roughly.

Roughly I mean that 2% of efficiencies met in 'twenty 'twenty six again.

And then the depreciation associated men to all of the new products mean coming into the market with technically the depreciation of what has been capitalized starts at just at the start of production.

Harald Wilhelm: Then the depreciation associated to all of the new products coming into the market, where technically the depreciation of what has been capitalized starts at the start of production, has a headwind of -0.7. All in all, that leads to a 3% to 5% return on sales, adjusted, but a bit similar, if you allow me, I mean, to compare with the bridge between 2024, 2025, where I told you basically all the market elements had been mitigated by efficiency measures. If you look on the bridge now, 2025, 2026, it means that the market evolution is completely absorbed by further efficiency measures, and it actually leaves you, if you want to really make it simple, with a headwind from the tariffs and the FX, 2025 to 2026.

<unk> has a headwind of <unk> seven negative.

All in all that leads to a suite two 5% return on sales men adjusted but a bit similar if you allow me domain two to compare with the bridge between 'twenty four 'twenty five we're told you basically all of the market elements have been mitigated by efficiency measures. If you look on the bridge now 25.

26, it means that the market evolution is completely absorbed by further efficiency measures and it actually leaves you you were going to really make it simple with a headwind from the tariffs and the FX 20.

25 to 2026.

Yeah.

Then on the investment side I emphasized before that 2025.

Harald Wilhelm: Then on the investment side, I emphasized before that 2025, we did see the peak of the investments with a EUR 12.7 in terms of PPE and R&D. So clearly now for 2026, we therefore see the PPE to come slightly down, and the R&D to come significantly down compared to 2025. Well, obviously, I mean, if that investment, I mean, comes down, the depreciation then accelerates, that is favorable in terms of cash conversion. So hence you see a cash conversion rate at 1 to 1.2 on cars. Let's have a look on the van side of things. First, in terms of the sales side, we do expect some slight sales growth, despite headwinds expected, I mean, in China and the US, on the back of the product strengths.

We did see the peak of the investment with a 12.7 in terms of PPE and in R&D. So clearly now for 'twenty 'twenty six we therefore see.

The P P.

PPE to come slightly down.

And the R&D to come significantly down compared to 220 25.

And well, obviously I mean, if that investment I mean, it comes down to depreciation accelerates that is favorable in terms of cash conversion. So hence you will see a cash conversion rate at one to 1.2 on cars.

Let's have a look on the van side of things first in terms of the sales side, we do expect some slight sales growth despite headwinds expected demand in China and the U S. On the back of the product strengths, we see the HCV share between eight to 10 per.

Harald Wilhelm: We see the xEV share between 8 to 10%, so expanding even further with the full availability and also the products, and then in particular, with the VLE ramp up to come later in the course of the year. What does it mean in terms of the profit evolution on vans? Here we maintain the guidance of 8 to 10% as we had it in 2025. So coming from the 10% in 2025, what are the building blocks in the van bridge? The FX is also negative here, but a bit less so with -0.4. The volume and the mix should be positive, a bit less than 2. The pricing is expected to remain stable.

And so expanding.

Even further with a full availability and also the products and then in particular with the <unk> ramp up to come later in the course of the year.

What does it mean in terms of the profit evolution on vans.

Here, we maintain our guidance of 8% to 10% as we headed in 2025, so coming from the 10% in 2025, what are the building blocks in the van bridge. The FX is also negative here, but a bit less so with an old point for the volume in that.

<unk> should be positive.

Lesser than two the pricing is expected to remain stable and then obviously we have to prepare for the V. O E ramp up in the sites and the products that comes along with some cost the rich.

Harald Wilhelm: Then, obviously, we have to prepare for the VLE ramp up in the sites and the products that comes along with some cost, which is probably in the vicinity, also over 2%. That's how we're getting to, I think, a pretty clean 8 to 10 on the vans for 2026. Looking on the investment side and the cash flow for vans, I talked about cars, the investment peak being 2025. For the vans, the investment peak is 2026. Well, obviously, with the VLE, and then later on, the VLS coming to market, it means on the R&D side, we will be slightly above previous year level.

Richa is probably in the vicinity also over 2% that's how we're getting to I think a pretty clean eight to 10 earned events for 2026.

Looking on the investment side and the cash flow for four events.

I talked about cars the investment peak being 2025 for the vans. The investment peak is 2026, well, obviously with the BLA and then later on the via less coming to market. It means on the.

R&D side.

We will be.

B C.

Slightly above previous year level on the PPE side as the emphasis now goes on the industrial side of things.

Harald Wilhelm: On the PPE side, as the emphasis now goes on the industrial side of things, it's going to be significantly above, and that is pretty clear that this weighs on the cash conversion ratio. Therefore, that sits at a rather low number of 0.1 to 0.3 in 2026. But I would say that if 2025 was investment peak for cars, 2026 is the investment peak for vans, and then it starts to decline also on the van side. Looking on financial services for 2026, we do expect a pretty solid return on sales on equity adjusted of 10 to 12% for 2026. What are the building blocks here? Favorable effect from the portfolio margin expanding further.

It's going to be significantly above that.

It is pretty clear that this weight on the cash conversion ratio. Therefore that sits at a rather low number of all 0.12 <unk> suite in 2026, but I would say.

Say that.

If 2025 was investment peak for cars 2026 is the investment peak for vans and then it starts to decline.

Also on the van side.

Looking on our financial services for 'twenty 'twenty six we do expect a pretty solid.

Turn on say on equity adjusted of 10% to 12% for.

For 2026, what are the building blocks here favorable effect from the portfolio margin expanding further we continue on the cost savings and we do expect some flattish cost of credit risk.

Harald Wilhelm: We continue on the cost savings, and we do expect some flattish cost of credit risk. With that, I mean, I would suggest we have a look at the group guidance. Obviously, that follows the same assumptions as on the segment, on the division guidances. All of the comments, I mean, I made, I mean, before, obviously apply also here. It means first, on the revenue side, we expect that at prior year level, so roughly in the EUR 130 billion territory. On the EBIT side, we see that significantly above prior year level. That is a reported EBIT. Remember, we had in 2025 a restructuring charge for the NLPP, which we don't expect to repeat in 2026.

Is that I mean, I would suggest we have a look at Dia and the group guidance. Obviously that follows the same assumptions as on the segment on the division guidance is.

The.

All of the commenced I mean, I made I mean before oversee apply also here.

And it means first on the revenue side, we expect that edge prior year level. So roughly in the 130 billion territory on the avid side, we see that significantly above prior year level that is the reported EBIT remember, we head into 2025 the restructuring charge.

For the N a P P, which we don't expect to repeat in 2026, and then on the cash flow side, we do expect that the cash flow for 2026 or to be slightly below prior year.

Harald Wilhelm: And then on the cash flow side, we do expect the cash flow for 2026 to be slightly below prior year. Please remember that that will include significant cash out for the NLPP program. So the underlying cash flow, I think with that, I mean, looks to be rather, rather solid and, and strong. If you think about the bandwidth of that, the guidance range, slightly lower compared to 2025. You should rather think about the lower end side of that band. That's important maybe to note as well. As well, I think important to note that that cash flow guidance does not include any further cash ins from M&A or divestments.

Please remember that.

That will include.

Cause significant cash out for the N. P. P program. So the underlying cash flow I think it was that I mean, it looks to be rather rather solid and strong. If you think about the bandwidth of that guidance range slightly.

Slightly lower compared to 2025, you should rather think about the lower end side of that band.

That's important maybe to note as well as well I think important to note that that cash flow guidance does not include <unk>.

Any further cash ins from M&A or divestments.

Harald Wilhelm: And with this, I think, I mean, we covered, I mean, 2025 and the guidance for 2026, and now I'm handing over back to Wilhelm.

And with this I think I mean, we covered them in 2025 and the guidance for 2026, and now I'm handing over back to Wilson.

Harald Wilhelm: And with this, I think, I mean, we covered, I mean, 2025 and the guidance for 2026, and now I'm handing over back to Wilhelm.

Yeah. Thank you very much guys. Thank you very much all our four looking back at 2025 on our results and after a short break we will focus on the future of Mercedes Benz.

Willem Spelten: Yeah, thank you very much, Harald. Thank you very much, Ola, for looking back at 2025 on our results. After a short break, we will focus on the future of Mercedes-Benz. Little teaser, it's a bright future. We'll be back on stage in 15 minutes at 9:00 sharp. Until then, we will pause the live stream, but please make sure to redial in or to reactivate at 9:00. Thank you.

It is a it's a bright future.

We're back on stage in 15 minutes at nine o'clock sharp. So until then we will post a livestream.

But please make sure to redial in order to reactivate at nine o'clock. Thank you.

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Christina Schenck: Thank you, Ola. Thank you, Harald, for providing us with a review on 2025 results. We're now shifting from 2025 to the future of our company. Ola Källenius, Matthias Geisen, Oliver Thöne, and Harald Wilhelm will provide us with an update on where we stand in terms of implementing our strategy, the progress achieved, the momentum behind the initiative, and the next steps on our path forward. Please welcome back on stage, Ola.

Okay.

Yes.

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Thank you Willa, Thank you for providing us with a review on 2025 results. We're now shifting from 2025 to the future of our company.

Luckily Aeneas Mathias Geyser, Oliver Tuna, and Todd will him will provide us with an update on where we stand in terms of implementing our strategy. The progress achieved the momentum behind the initiatives and the next steps on our path forward. Please come back on <unk>.

<unk>.

Sure.

Okay.

Thank you Christina and well come back to this strategy update for Mercedes Benz and we will focus on this strategy date strategy update on the Mercedes.

Ola Källenius: Thank you, Christina, and welcome back to this strategy update for Mercedes-Benz. We will focus in this strategy update on Mercedes-Benz cars. For those of you who are Formula One fans, you know that the 2026 season is the start of a new regulation. Actually, a fundamental rule change, both on the powertrain side, more electrification to negotiate the lap, but also a reworked car, a little bit smaller, a little bit lighter. I would consider it one of the biggest rule changes in the history of Formula One. We're now testing in Bahrain as we speak with George Russell and Kimi Antonelli. Why do I say this? Because this feels a little bit like what's going on in the auto industry as well.

Mercedes Benz cars.

For those of you who are formula one fans.

You know that the 2026 season.

It's the start of a new regulation actually a fundamental rule change both on the powertrain side more electrification to negotiate the lap.

But also a reworked car a little bit smaller a little bit lighter.

I would consider it one of the biggest rule changes in.

In the history of Formula one.

And we're now testing in Bahrain, as we speak with George Russell and Kimi Antonelli.

Why do I say this.

This feels a little bit like what's going on in the auto industry as well.

The rules are changing.

Ola Källenius: The rules are changing, and as the rules are changing, market environments are changing, even the macro environment is changing. The technology is a transformation once in a 100 years. You have to also, as a company, be able to be agile and flexible and make the adjustments that are necessary, to take on these new rules. And that is what we want to show you in this presentation today. What is Mercedes' game plan going forward here in the next years? I'm just going to start with some headline numbers to give you a feeling for the destination. We want to grow. Absolutely clear priority in the midterm is to grow and come back to at least roughly a 2 million number for the car side. Matthias Geisen will talk more about that in his go-to-market presentation right after me.

And as the rules are changing market environments are changing even the macro environment is changing.

The technology is a transformational once in 100 years.

Have to all sorts of company and be able to be agile and flexible.

And make the adjustments that are necessary.

To take on these new rules.

And that is what we want to show you in this presentation today, what is Mercedes game plan going forward here in the next years.

I'm just going to start with some headline numbers to give you a feeling for the destination.

We want to grow.

Absolutely clear priority in the midterm is to grow and come back to at least roughly a $2 million number for the car side.

<unk> guys and we'll talk more about that in his go to market presentation right. After me.

Of the.

Ola Källenius: Of the historic product launch offensive at Mercedes-Benz, we're putting a lot of emphasis on models in what we call the top-end vehicle segment. So in this same time frame, we want to grow our top-end vehicle sales quite significantly. And as we're in transformation on a journey towards zero emission, we want to double our xEVs in the same period with a very strong emphasis on BEVs. In some cases, Harald mentioned it in the results conference just a few minutes ago, that, for instance, on MMA, the new entry architecture for Mercedes-Benz, we have gracefully retired the plug-in hybrid and are focusing on BEV and the regular mild hybrid powertrains. But if that is the destination, and that destination should also lead to solid profitability and return to our shareholders, Harald will talk about that mainly in his section.

Historic product launch offensive Mercedes Benz.

We're putting a lot of emphasis.

On models and what we call the top end vehicle segment.

So in this same time frame, we want to grow our top end vehicle sales quite significantly.

And as we are in transformation on a journey towards zero emission.

We want a double our X series in the same period.

With a very strong emphasis on b ev's in some cases Harold mentioned it in the results conference just a few minutes ago that for instance on MMA, the new entry architecture for Mercedes Benz.

We have.

Gracefully retire the plug in hybrid and are focusing on <unk> and the regular mild hybrid powertrains.

But if that is the destination and that destination should also lead to.

Solid profitability and return to our shareholders Hal will talk about that mainly in his section.

What is more important is what is the journey.

Ola Källenius: What is more important is: What is the journey? How are we going to get there? What have we done in the last years to prepare ourselves for this, and what are the strengths that we can play to? That can be summarized with these five chapters, and it starts with technology and product. Of course, the go-to-market strategy that Matthias will cover. China is on everybody's mind, the most competitively intense, but also the largest car market in the world. Oliver Thöne is joining us, joining us here this morning, our head of China, to give you a drill down on what our game plan specifically for China looks like.

How are we going to get there what have we done in the last years to prepare ourselves for this and what are the strengths that we can play too.

And that can be summarized.

With these five chapters and it starts with technology and product.

Of course, the go to market strategy that Matthias will cover.

China is on everybody's mind, the most competitively intense but also the largest car market in the world.

All of attorneys joining joining us here this morning, our head of China to.

To give you a drill down on what our game plan, specifically for China looks like.

But next this whole revolution that is going on technologically and on the market side.

Ola Källenius: But next to this whole revolution that is going on technologically and on the market side, we are fundamentally reinventing the company, the people, the organization, the tools, leveraging artificial intelligence, but also introducing robotics into our manufacturing environment. And last but not least, for all of you, who are investors in this company, large or small, we always have you on our mind, and we want to continue our very solid track record of returns to our shareholders. Now I'll go a little bit deeper and see what this means. Over the last four years, we have, starting with the electrical side, changed everything. Changed everything.

We are fundamentally reinventing the company the people the organization the tools leveraging artificial intelligence, but also introducing robotics into our manufacturing environment.

And last but not least for all of you.

Who are investors in this company large or small.

We always have you on our mind and we want to continue our very solid track record of returns to our shareholders.

Now go little bit deeper and see what this means.

Over the last four years.

We have starting with the electrical side.

Changed everything.

Ola Källenius: The new generation of electric vehicles that are entering into the market from Mercedes-Benz, starting with the CLA that we launched last year and CLA Shooting Brake, GLB, GLC electric, and all those vehicles that are now in the pipeline, they come with a fundamentally, from the ground up, newly developed electric powertrain platform that we can scale in every single segment of Mercedes, completely flexibly in production, from range toppers using the most sophisticated NMC technology, to also models, more in the entry offering per model with LFP, inside the same energy box, fully flexibly across plants and across models.

The new generation of electric vehicles that are entering into the market for Mercedes Benz starting with the CLA that we launched last year in CLA shooting break G. L. B.

At G O C electric and all those vehicles that are now in the pipeline.

They come with a fundamentally from the ground up newly developed.

Electric powertrain platform that we can scale in every single segment of Mercedes.

Completely flexibly and production from range toppers, using the most sophisticated MMC NMC technology to also models.

More in the entry offering per model with LSP inside the same energy box fully flexibly across plants and across models.

If you look carefully.

Ola Källenius: If you look carefully at the details of the numbers of, for instance, the CLA or the GLC electric, and you look at the size of those vehicles, what they contain and what they actually consume in terms of kWh per 100km, it's almost like you get to an impossible equation. They are fully loaded, fully Mercedes technology, all bells and whistles that you can dream of, but at the same time, class-leading in efficiency. Class-leading in efficiency. That wasn't possible in the old paradigm on combustion cars. It's like bigger cars, more fuel consumption. Here, we beat even entry offerings of some of the volume competitors in terms of efficiency. How is that even possible? Technology. Technology and innovation, scalable across the whole portfolio.

At the.

Details of the numbers of for instance, the CLA or the GLC electric and you look at the size of those vehicles what they contain.

And what they actually consume in terms of kilowatt hours per 100 kilometers.

It's almost like you get to an impossible equation there.

They are fully loaded fully Mercedes.

Technology, all bells, and whistles that you can dream of.

But at the same time class leading inefficiency.

<unk>, leading inefficiency that that didn't that wasn't possible in the old paradigm on on combustion cars, it's like bigger cars more.

Fuel consumption here, we beat even entry offerings of some of the volume competitors in terms of efficiency, how is that even possible technology.

Technology and innovation scalable across the whole portfolio.

And to make a splash and also make a statement that is why we built this AMG G. T X X concept car and drove quote unquote around the world in less than eight days smashed 25 records for any electric vehicle in the world.

Ola Källenius: And to make a splash and also make a statement, that is why we built this Concept AMG GT XX and drove, quote unquote, "Around the World in Less Than Eight Days," smashed 25 records for any electric vehicle in the world, with this orange beauty down here. Was that a PR exercise? No, it was not. Technically speaking, it was a test drive. And in only a few months' time, we will have the world premiere of the production car of this, and it will go into the market in the second half of this year. So here we also demonstrate the absolute frontier of what electric drivetrain can do. And maybe on powertrain, I could end my presentation right there and said, "Yeah, let's go." But as I mentioned, we live in a heterogeneous world.

With this orange beauty down here.

Was that a PR exercise no it was not.

Technically speaking it was a test drive.

And in only a few months' time, we will have the world premiere of the <unk>.

Production car of this and it will go into the market in the second half of this year.

So here, we also demonstrate the absolute frontier, but what electric drivetrain can do.

And maybe on powertrain I could end my presentation right, there and said yeah, let's go.

But.

As I mentioned, we live in a heterogeneous world.

Adoption towards electrification in the 150 plus markets that we serve around the world. It's.

Ola Källenius: Adoption towards electrification in the 150-plus markets that we serve around the world is not the same everywhere. And it is clear to us that for the foreseeable future, minimum, the next 10 years, probably a little bit longer, it will be an all-of-the-above scenario. It will be an all-of-the-above scenario. So a little more than 2 years ago, that is how we have adapted to the new rules, coming back to the Formula One car analogy. And we have in this calendar year, 2026, ready to go, four-cylinder petrol and diesel, six-cylinder petrol and diesel, brand-new V8, and the high-performance AMG versions of these powertrains. EU7 ready.

It's not the same everywhere.

It is clear to us.

That for the foreseeable future minimum the next 10 years, probably a little bit longer it will be in all of the above scenario.

It will be in all of the above scenario, so a little more than two years ago that is how we have adapted to the route rules coming back to the Formula One car analogy.

And we have in this calendar year 2026 ready to go.

Four cylinder petrol and diesel six cylinder petrol and diesel brand New V. Eight.

And the high performance AMG versions of these powertrains.

EU seven ready.

Ola Källenius: For those of you who are hobby combustion engineers, if you study the EU7 rules closely, you have to run Lambda One, and you cannot run rich at the top end of your revving curve, which you need for peak performance. Maybe you don't use it every day in traffic, I understand that. Maybe on the autobahn. To solve that equation without sacrificing performance is very difficult. But just to demonstrate how comprehensive the update of the electrified high-tech powertrain portfolio is, for this S-Class, and here is where it starts. I think it's the first car in the world with that generation powertrain, with that level of technology, ready to go, more performance, most stringent emissions rules.

For those of you who are a combustion hobby.

Hobby combustion engineers.

If you study your seven rules closely you have to run Lambda, one and you cannot Brian rich at the top end of your revenue curve, which you need for peak performance, maybe you don't use it every day in traffic out of standup maybe on the Autobahn.

To solve that equation without sacrificing performance is very difficult.

But just to demonstrate how comprehensive the update of the electrified high Tech powertrain portfolio is.

For the SaaS class inherits, where it starts I think it's the first car in the world with that generation powertrain would that level of technology ready to go more performance most stringent.

Emissions rules.

So for every meaningful product portfolio position and certainly also in the performance segment for AMG.

Ola Källenius: So for every meaningful product portfolio position, and certainly also in the performance segment for AMG, we're ready to go, and we will roll out this across the portfolio in the next couple of years. That in itself, as a technology platform, is a big deal, and it sets us up to go for it. An even bigger deal is the work that we have done on the Mercedes-Benz Operating System in the last 4 to 5 years. When we launched the CLA in the summer of last year, I believe we were the first, shall I call it, established manufacturer, not new entrant, established manufacturer that launched a fully software-defined vehicle with top-of-the-line compute, top-of-the-line sensing, and a fully comprehensive holistic software stack based upon both the traditional AI and end-to-end Gen AI.

We're ready to go and we will rollout this across the portfolio in the next couple of years.

That in itself as a technology platform is a big deal and it sets us up.

Go for it.

And even bigger deal is the work that we have done on the Mercedes Benz operating system in the last four to five years when.

When we launched the CLA in the summer of last year.

I believe we were the first.

Shall I call. It established manufacture not new entrant established manufacturer that launched a fully software defined vehicle.

With top of the line compute top of the line sensing.

And a fully comprehensive.

Holistic software stack based upon.

Both the traditional AI.

And end to end journey II.

Others are working on that too.

Ola Källenius: Others are working on that, too, some of which work on it for their electric cars and do something else on the combustion car. In the case of Mercedes-Benz, MB.OS is now coming to the complete lineup. All-electric cars, all combustion cars. Here is the S-Class. I mentioned it in the presentation before. We have changed more than half the car, 2,700 parts. The most significant change is actually what's beneath the sheet metal. It is a complete replacement of the brain and the central nervous system of the car. So every single Mercedes will be on this platform. It is also a flexible platform.

Some of which work on it for their electric cars and do something else on the combustion car in the case of Mercedes Benz <unk> Pos is now coming to the complete lineup.

Electric cars.

All combustion cars, here's the S class I mentioned it in the presentation before we have changed more than half the car 2007 hundred parts. The most significant change is actually what's beneath the sheet metal is a completely replacement of the brain in the central nervous system of the car. So every single Mercedes will be on this platform.

It is also a flexible platform, we can launch a top notch feature with a tech partner in the west.

Ola Källenius: We can launch a top-notch feature with a tech partner in the West, and at the same time, on the same foundation, do the exact same thing in China with a completely different tech partner, and add whatever we like, whenever we like. The car digitally doesn't grow old. It stays fresh and will stay at the forefront of what's technologically possible from now on, and forever. It's like a river that flows, and it never stops. Because this also fundamentally changes how you produce cars. You fill up the software now in the final assembly, as opposed to get it from a supplier inside some kind of an ECU, the old paradigm.

But at the same time on the same foundation do the exact same thing in China with.

With a completely different tech partner.

And add whatever we like whenever we like the car digitally doesn't grow old.

It stays fresh and will stay at the forefront of whats technologically possible.

From now on.

Forever.

It's like a river that flows.

And it never stops.

This also fundamentally changed how you produce cars you fill up the software now in the final assembly as opposed to get it from a supplier inside some kind of an easier with the old paradigm.

Ola Källenius: In your after-sales organization, any analysis that you want to do on consumer behavior, mind you, with anonymized data, of course, data protection, or any other issue that the customer has, you can now go in with full OTA capability in 100% of the car. We have had OTA capability for years, but now it's the whole vehicle that is reachable. It is incredibly powerful, and I think the biggest technological change that we have experienced in this company in decades, and we are one of the leading, if not the leading, established OEM that have made this happen. What's the feature that we talk a lot about? Assisted driving, automated driving. Every single Mercedes now comes with an NVIDIA supercomputer in it. 27 sensors around the car in this vehicle here. I'm thinking to myself, where are they?

In your after sales organization any anything any analysis that you want to do on consumer behavior mind, you with Anonymised data of course data protection.

Or any other issue that the customer house you cannot go in with full OTA capability in 100% of the car, we about OTA capability for years, but now it's the whole vehicle that is reachable it is incredibly powerful.

The biggest technological change that we have experienced in this company.

Decades.

And we are one of the leading if not the leading established OEM that have made this happen.

What's the feature that we talk a lot about assisted driving automated driving.

Every single Mercedes now it comes with an Nvidia supercomputer in it.

27 sensors around the car and this vehicle here.

Thinking to myself.

Or are they.

Ola Källenius: Yeah, kudos to the design colleagues that they can mask that quite beautifully. A combination between a rule-based AI stack and a Gen end-to-end AI stack that we launched together with NVIDIA at the CES at the beginning of the year. So Level 2++ literally is built into every car everywhere. Yes, we have launched it first in China because it's allowed. We're launching it now in the United States because it's also allowed. In Europe, you can have a debate, but we're going to have a positive discussion with regulators in Europe to demonstrate how sophisticated this technology is and hope that we can also bring it to our customers in Europe soon. Next, Level 3, much higher speeds, much less restrictions, based upon, of course, that foundation. In development, it's coming.

Kudos to the design colleagues that they can mask that quite.

Beautiful Lee.

And.

The combination between a rule based AI stuck and adjourn.

And AI stack that we launched together with Nvidia at to see us at the beginning of the year.

So level two plus plus literally is built into every car everywhere, yes, we have launched it first in China, because it's allowed.

We're launching it now in the United States because it's also allowed in Europe, you can have a debate, but we're going to have a positive discussion with regulators in the in Europe to demonstrate how sophisticated this technology is and hope that we can also bring it to our customers in Europe soon.

Next Gen L. Three much higher speeds much less restrictions based upon of course that foundation in development that's coming.

Ola Källenius: We have made the S-Class, and here we deliberately chose our flagship L4-ready, with all the redundancies that you need for L4, redundant steering, redundant braking, redundant power supply, redundant compute, et cetera. We are launching this year the first pilots together with our partners Uber, NVIDIA, and Momenta. It will not just stay at one location. It will go to several locations here over the next couple of years. So the new S-Class is L4-ready as well. We have talked about this product offensive. Yes, it's very large. I looked at this chart, and I was thinking to myself, I actually have a pretty good memory, Christine, and I asked this. I feel that it looked different than the slide that I showed last year.

And we have made the S class and here, we deliberately chose our flagship L. Four ready with all of the redundant says redundancies that you need for al for redundant steering redundant breaking readout and power supply redundant compute et cetera, and we are launching this year. The first pilots together with our partners.

<unk>.

Nvidia and momentum.

And it will not just stay at one location. It will go to several locations here over the next couple of years.

So the new ask classes El for radio as well.

We have talked about this product offensive, yes, its very large I looked at this chart and I was thinking to myself actually have a pretty good memory Christina on us.

I feel that look different than the slide that I showed last year.

Ola Källenius: Sometimes, Mercedes is more sophisticated than it should be, and I'm sure we have a Ph.D.-level department that does nothing about count nomenclature and models. So I can say this, if you pull out the chart from last year, it's actually the same chart, but they didn't show all the AMG models here, and then they added the long wheelbase. Whatever. It is the same product offensive that we talked about last year. Some have now been uncovered. The biggest launch here is the one that we have now, and it's going to be really, really big. And it happens both on the electrical side, and on the high-tech, combustion side. So stay tuned for a very busy 2026.

Sometimes a mercedes is more sophisticated than it should be and I'm sure. We have a ph D level department that does nothing about count nomenclature and models.

So I can say this if you pull out the chart from last year, it's actually the same chart.

But they didn't show all the AMG models here and then they add to the long wheelbase.

Whatever it is the same product offensive that we talked about last year. Some have now been uncovered the biggest launch there is the one that we have now and it's going to be really really big.

And it happens both on the electrical side and all the high Tech combustion side, so stay tuned for a very busy 2026.

In these next three months alone.

Ola Källenius: In these next three months alone, the new VLE, which is the successor of what we call the V-Class today, the Maybach S-Class, the new GLE, the new GLE Coupé, the new GLS, the new electric C-Class... the new AMG GT. Inside three months, seven world premieres. I've never experienced anything like that. So for those of you who are in product media, and I see a few here in the room today, just stay with us for the next three months; we will keep you busy. Yes, I mentioned, and I think Matthias will talk more about it. There's a lot of emphasis on the top end to make sure that in our traditional stronghold, where we are the largest manufacturer in the world, that we build upon that position. Defend where necessary, and increase where there are opportunities.

The new really which is the.

Successor, or what we called the V class today.

The Maybach S class.

The new <unk>, the new <unk> Coupe.

The new <unk>.

The new electric C class.

The new AMG G T inside three months seven world premieres I've never experienced anything like that so for those of you who are in product media and I see a few here in the room today.

Just stay with us for the next three months, we will keep you busy.

Yeah.

Yes, I mentioned and I think Mathias will talk more about it there's a lot of emphasis on the.

On the top of them to make sure that in our traditional strong hold where we are the largest manufacturer in the world.

Yeah that we build upon that position.

Defend where necessary and increase where there are opportunities and.

Ola Källenius: We will do that both for Maybach, particularly for AMG, and also in the G. The G is one of those things, it's a scarce product. Everybody wants to have it. Many people dream about it. When we announced last year that we were going to do a G convertible that we will launch in the second half of next year, I didn't know that I had that many friends. Suddenly I got WhatsApp messages from people I haven't spoken to in a long, long time. So we will, of course, make sure that it stays precious, but we have growth potential here, as I mentioned in the beginning. In terms of the markets, Matthias, I don't want to steal your thunder.

And we will do that both from my Buck.

Particularly for AMG and also in the GE.

He is one of those things, it's a scarce product everybody wants to have it many people dream about it.

When we announced last year that we were going to do a G convertible debt. We will launch in the second half of next year I didn't know that I have that many friends.

Suddenly I got Whatsapp.

The messages from people I haven't spoken to in a long long time.

So we will of course make sure that it stays precious but we have growth potential here as I mentioned in the beginning.

In terms of the markets.

Yes, I don't want to steal your Thunder.

Ola Källenius: And we are looking at growth already in this year in the United States, in Europe, and overseas. Some people with a specific focus on Europe and a specific focus on Germany, they come to me and say, "Ola, what is it now? What is your portfolio strategy, and what is your go-to-market strategy?" Build, protect our home turf of top-end vehicles. It's where we have the origins of the Mercedes-Benz brand, and it's also the main part of our profitability. Grow with core, and especially now that we're entering the electric vehicles on core, we have a chance to really make a dent there, and we will do that. But also stay in entry and manage the entry volume.

And we are looking at growth already in this year in the United States in Europe and in overseas.

Some people with specific focus on Europe, and a specific focus on Jeremy They come to me and say well what is it now what is your portfolio strategy and what is your go to market strategy.

Build protect our home turf top end vehicles, it's where we have.

The origins of the Mercedes Benz brand and its also the main part of our profitability grow with core and especially now that we're entering the electric vehicles on core we have a chance to really make a dent there and we will do that.

But also stay in and treat and manage the entry volume that is the position where I don't know the 28 year old version of yourself, where you get to know the Mercedes brand first and when you step in.

Ola Källenius: That is the position where, I don't know, the 28-year-old version of yourself, where you get to know the Mercedes brand first and when you step in. For those of you who were particularly nervous about the entry offering in Europe, yes, we did make a decision last year that we will have a very exciting, hot as hell, successor to what is currently the A-Class. No, we're not gonna show it to you today because the current generation A-Class is running for this year until the end of next year. But rest assured, for the European market, we will have an adequate, very attractive entry point into the Mercedes-Benz brand. Stay tuned. You can spend 2 hours talking about China.

For those of you who were particularly nervous about the entry offering in Europe, Yes, we did make a decision last year that we will have a very exciting.

US Hell.

Successor to what is currently a class.

And no we're not going to show it to you today because the current generation a class is.

<unk> running for this year until the end of next year, but rest assured for the European market, we will have an adequate <unk>.

Very attractive entry point in to the Mercedes Benz Brian stay tuned.

You can spend two hours talking about China, I am going to spend two seconds, because I'm going to hand that whole chapter over to Oliver Turner, who will explain in all dimensions. What is our plan to tackle this most fiercely competitive environment in the automotive industry today.

Ola Källenius: I'm gonna spend 2 seconds because I'm gonna hand that whole chapter over to Oliver Thöne, who will explain in all dimensions what our plan is to tackle this most fiercely competitive environment in the automotive industry today. That leads me to the transformation of the company. We're a product company, we're a technology company. The orientation of this company is all about innovation and so on, and I admit it, we talk from morning till evening about cars and technology. That is what we do. But you should not waste this opportunity of a once-in-a-100-years transformation to not, at the same time, look at your enterprise. Kind of a quiet revolution in the background that is going on at Mercedes-Benz in many dimensions, as I'm only looking at 4 here, is that we are reinventing the enterprise as well at the same time.

And that leads me to the transformation of the company.

Yeah.

We're a product company, we're a technology company the Orient instead of this company is all about innovation and so on and I admit it we talk from morning till evening about cars and technology that is what we do.

But you should not.

Waste this opportunity of a once in 100 years transformation to not at the same time look at your enterprise.

So kind of a quiet revolution in the background that is going on at Mercedes Benz in many dimension us I'm only looking at for here is that we are reinventing the enterprise as well at the same time.

Ola Källenius: It starts with people, and the people that carry the most responsibility in the company is, of course, the management. We have significantly changed the management structure. We have significantly elevated next-generation talent into prominent positions in the company, not only on the board. If you look at the level one below the board, it's almost like half of the team is new. And the people that carried the torch for a long, long time, that are now going into retirement, and that deserve maybe a little bit time for themselves as well. There is a hungry, young generation of management on the top level, but on all levels, ready to take over, and also in a much slimmer, flatter, optimized structure.

It starts with people.

And the people that carry the most responsibility in the company so of course the management.

We have significantly changed the management structure, we have significantly.

Elevated next generation talent into.

Prominent positions in the company not only on the board. If you look at the level one below the board, it's almost like half of the team is new.

And the people that carried a torch for a long long time that are now going into retirement.

That's a disservice, maybe a little bit time for themselves as well there is a hungry young generation of management on the top level, but on all levels ready to takeover.

And also in a much slimmer flatter optimized structure and this winning attitude we want to carry into the whole team at Mercedes Benz and we're working on that across the whole company across all levels kind of that Formula One spirit you go for it it's all about.

Ola Källenius: This winning attitude, we wanna carry into the whole team at Mercedes-Benz, and we're working on that across the whole company, across all levels. Kind of that Formula One spirit. You go for it. It's all about shaving some lap time off of the sectors and ultimately win the race. This is also powered by technology. The revolution is not only happening on the product side. We have dozens, if not hundreds, of AI-driven projects going on in the company that is going to change how we work. It's gonna fundamentally change how we work. It's happening in every industry. And what's going on in advanced pilots with robotics, it feels a little bit like, I don't know, the Hollywood movie, I, Robot, many years ago. That felt like science fiction. It's not science fiction anymore. We are close. We're doing pilots now.

Shaving some laptop them off of the sectors and ultimately win the race.

This is also powered by technology. The Revolution is not only happening on the product side.

We have dozens if not hundreds of AI driven.

Projects going on in the company that is going to change how we work.

It's going to fundamentally change how we work is happening every industry.

And what's going on in advanced pilots with robotics.

It feels a little bit like I don't know the Hollywood movie Irobot, many years ago that felt like science fiction.

It's not science fiction anymore, we are close we're doing pilots now.

Ola Källenius: We are invested in one of the leading companies in the United States that is in the process of creating a next-generation,

We are invested in one of the leading companies in the United States that is.

Ola Källenius: We are invested in one of the leading companies in the United States that is in the process of creating a next-generation,

In the process of creating a next generation.

Human lifestyle robots and also other applications of it.

Mathias Geisen: ... humanoid style robots and also other applications of it, called Apptronik. I saw another car company, the market cap went up a lot. Maybe, Harald, we undersold that bit. But nevertheless, we're gonna use robotics to also, in the next years, not decades, years, also revolutionize productivity and how we make things. Last but not least, but I'll leave it to you, Harald. For every shareholder that is listening, we know who we're working for. We're working for you, and we are very, very, very focused that everything that I just mentioned also leads to a healthy return to you. And with that, the first 140 years, they were exciting. We're looking forward to the next 140 years. Thank you very much.

Old up Tronic I saw another car company the market cap went up a lot maybe Harold we under sold that bit but nevertheless.

We're going to use robotics.

Two also in the next years.

Not decades years also revolutionized productivity and how we make things.

Last but not least but I'll leave it to you Harold.

For every shareholder that is listening we know who we're working for working for you.

And we are very very very focused that everything that I. Just mentioned also leads to a healthy return to you.

And we adapt.

The first 140 years they were exciting we're looking forward to the next 140 years. Thank you very much.

There is a place we all know.

Christina Schenck: There's a place we all know, a place we love to go. And that's home. It's where we feel at ease, and only do as we please. So have breakfast in bed, sing in the shower, and eat like no one's watching. Here's where every journey starts. Seriously, Dad? Or ends. Where we spend time with family. You missed your nanny! Or all by ourselves. It's getting dark, so tell a good night story. Contain roughly 10 sextillion stars. And then... Turn the lights off in the house. Meet little baby. Home is not a zip code. I want a Sunday- It's a feeling. Kind of love. We've been sparking it for 140 years. Sunday. Welcome home. Sunday.

[Video Narrator]: There's a place we all know, a place we love to go. And that's home. It's where we feel at ease, and only do as we please. So have breakfast in bed, sing in the shower, and eat like no one's watching. Here's where every journey starts. Seriously, Dad? Or ends. Where we spend time with family. You missed your nanny! Or all by ourselves. It's getting dark, so tell a good night story. Contain roughly 10 sextillion stars. And then... Turn the lights off in the house. Meet little baby. Home is not a zip code. I want a Sunday- It's a feeling. Kind of love. We've been sparking it for 140 years. Sunday. Welcome home. Sunday.

Please go ahead.

And that.

It's where we feel it.

And only <unk>.

So.

Breakfast in bed.

Thank you Sally.

And he's like no one's watching.

Peter every Chinese sites.

One moment.

[music].

Alright.

Hi.

While we spend time with family.

Are all by ourselves.

It's getting tight so.

So kind of a good night.

Thank you.

Uh huh.

I don't maybe Sunday home isn't that a Zip code.

Okay.

Leaf and spine.

Hi, James.

Okay.

Perfect.

[music].

Yeah.

Good morning, ladies and gentlemen.

Mathias Geisen: Good morning, ladies and gentlemen. What you've seen in this film is our recipe for success. It's about engineering, excellence, and superior customer experience. So that's what we call welcome home, and also to you, welcome home to Mercedes-Benz. Ladies and gentlemen, the last time I was in front of this audience was roughly three years ago, when I was still responsible for our van unit. Times have changed meanwhile, and today I'm happy to share with you our go-to-market strategy and how we want to reach the 2 million Ola mentioned earlier on. We want to reach those 2 million in a profitable and sustainable way. This is why we will further grow our top-end vehicle share, and we will massively grow the share of our XEVs in addition to that as well, because we have to strategically focus on electric mobility as well.

What you've seen in this film is our recipe for success, it's about engineering excellence and superior customer experience.

So that's what we call welcome home and also to you while it come home to Mercedes Benz.

Ladies and gentlemen, the last time I was in front of this audience last roughly three years ago. When I was still responsible for our van unit.

<unk> changed Meanwhile, and today I'm happy to share with you our go to market strategy and how we want to reach the $2 million, while I mentioned earlier on.

We want to reach those $2 million.

In a profitable and sustainable way. This is why we will further grow our top end vehicle share and we will massively grow the share of our ex <unk>. In addition to that as well because we have to strategically focus on electric mobility as well.

How do we want to achieve it.

Mathias Geisen: How do we want to achieve it? With a great brand, great products, and great customer experience. Is it easy to achieve? Definitely not easy, but we are well positioned to get it done. So let me tell you how. But first things first. 140 years and two weeks, Karl Benz invented the automobile, and we had a big celebration. And still today, we are a highly respected and leading automotive brand. That's the reason why we didn't only celebrate with partners. If you look at this slide, we received congratulations from lots of our competitors around the world, and that shows what strong brand Mercedes-Benz still is. But what's the reason for it? Well, we are still number one, the most valuable luxury automotive brand in the world.

With a great brand, great products and great customer experience.

If it's easy to achieve.

It is not easy, but we are well positioned to get it done. So let me tell you how but first things first.

140 years, and two weeks <unk> invented the automobile.

And we had a big celebration.

And still today, we are a highly respected and leading automotive brands. That's the reason why we didn't only celebrate with partners. If you look at this slide we received congratulations from lots of our competitors around the world and that shows what strong brand.

Mercedes Benz status.

But what's the reason for it.

Well, we are still number one the most valuable luxury automotive brands in the world.

Mathias Geisen: But what I believe is even more impressive, if you look at all the brands in the world across industry, and I would say there are plenty, we are amongst the top ten. So that shows the strength of our brand. We perform with three very important sub-brands like T-Class, Maybach, and AMG, and we have highest customer satisfaction. So we are in good shape with a very strong brand, which is definitely a competitive advantage in disruptive times, with a technological transformation going on, as well as major geopolitical challenges around the world. But if you have such a strong brand, it's not good enough only to invest in your products; you also have to invest in your brand. When we talk to our customers around the globe, they all like being in contact with us digitally, but what they want is more physical touch points to our brand.

But what I believe is even more impressive.

If you look at all of the brands in the world across industry.

And I would say there are plenty we are amongst the top 10, so that shows the strength of our brand.

We perform with three very important sub brands like G class My boss and A&P.

And we have highest customer satisfaction.

So we are in good shape with a very strong brand, which is definitely and competitive advantage in disruptive times. So the technological transformation going on as well as major geopolitical challenges around the world but.

But if you have such a strong brand it's not good enough only to invest in your product you also have to invest in your brands.

When we talk to our customers around the globe.

They all likes being in contact with us digitally, but what they want is more physical touch points to our brands.

Mathias Geisen: This is why we decided, end of last year, to increase our sponsoring activities. We are the new premium sponsor of the WTA female tennis tour, to get close contact to our customers on site, to fans, and to potential customers. Second topic, we don't want to wait for the customers to come to our showrooms, because if you do that, you normally already intend to buy a vehicle. We want to get closer to where the customers are. So we build brand studios around the world, launching 10 of them this year in metropolitan areas. And we even go beyond automotive with branded real estate. That's a license system here, and we work with luxury real estate developers, and we'll build 14,000 apartments around the globe, where customers get direct access to the Mercedes-Benz design and our overall market setup.

This is why we decided to end of last year to increase our sponsoring activities. We are then you have premium sponsor of the <unk> to a PMA tennis tour to get close contact to our customers on site to fans and to potential customers.

Second topic, we don't want to wait for the customers to come to our showrooms because if you do that you would normally already intends to buy a vehicle we want to get closer to where the customers are so we build brand studios around the world launching cannot them this year in metropolitan areas.

And we even go beyond automotive with branded real estate.

That's a license.

With them here and we work with luxury real estate developers.

And we'll build 14000 apartment around the globe.

Customers get direct access to the Mercedes Benz design and our overall market market setup. So that's why we believe from a brand perspective, we are well set up for another 140 years, but now let's look at the products and let me say one thing upfront.

Mathias Geisen: So that's why we believe from a brand perspective, we are well set up for another 140 years. But now let's look at the products, and let me say one thing upfront. Before I did run the van unit, I was head of corporate strategy, and five years ago, we definitely totally overestimated the speed with which customers would be willing to switch over to electric mobility. And we also overestimated their desire for having a completely differentiated design for their electric vehicle. So what were the guiding principles for our new launch campaign of the more than 40 models Ola mentioned?

Uh huh.

Before I did drop the van dominated I was head of corporate strategy and five years ago, we definitely.

Totally overestimated, the speed with which customers would be willing to switch over to electric mobility.

And we also overestimated their desire for having a completely differentiated design for their electric vehicles.

So what were the guiding principles for our new launch campaign after more than 40 models all I mentioned.

I'll do I'll, let you off the drivetrains available as combustion and as electric.

Mathias Geisen: A duality of the drivetrains available as combustion and as electric. All share the same iconic design, independent from the drivetrain we apply, and partnering up with companies, technological players in parts of the world to make sure we can cater the needs and especially the regional needs of customers better. The front-runners you see here, CLA, GLC, GLB. The CLA was the first one, and it shows the potential of our launch campaign. Having been awarded Car of the Year, 2026, having been awarded across segments, the safest tested vehicle by Euro NCAP last year, that really shows the DNA we have for our new products to come. Order intake is extremely strong, be it for the CLA or for the CLA, GLC, which has not even seen the showrooms yet. So we are in very good shape, but there is much more to come.

<unk> shall the same iconic design independent from the drive trend, we apply and partnering up with companies technological players in parts of the world to make sure we can cater the needs and especially the reach not only needs of customers better.

The front of almost go see him CLA GLC G L b.

The CLA, what's the first one and it shows the potential of our launch campaign, having been awarded cargo forget 2026, having been awarded across segments. The safest tested vehicle by your end cap last year that really shows the DNA, we have for our new.

Product to come order intake is extremely strong beat for the CLA offer the GLC, which have not even seen the showrooms yet. So we are in very good shape, but there is much more to come.

Mathias Geisen: When Ola talked about the 40 or more than 40 vehicles, it is important to mention, it's not about the sheer amount of products, it's about their strategic relevance. I said that we want to profitably grow to 2 million. 15% of our sales today are top-end, but 30% of the products we will be launching take place in the top-end segment. That shows that strategically, this is a vital business for us. But it's also true to say in markets like Europe, where entry and core are predominantly important, we also have to make sure that we address those customers, and that's what we'll do with the model we will launch below the CLA as an entry model into our brand, to make sure we cover both bookends of the overall rollout.

And when all I talked about the 40 or more than 40 V. Because it is important to Madison.

It's not about the sheer amount of products, it's about that strategic relevance.

Sent that we want to profitably grow to $2 million.

15% of our sales today are top end, but 30% of the product we will be launching take place in the top end segment that shows that strategically this is a vital business for us.

But it's also true to say in markets like Europe, where entry and call a predominantly important we also have to make sure that we address those customers and that's what we'll do with the model we will launch below the C. L. A as an entry model into our brands to make sure we.

Cover both book ends of the overall rollout.

Mathias Geisen: So now I've talked about the brand, I've talked about the products, but I said earlier on, it's about customer experience, because this combination is what really drives loyalty. So let's start with the retail network. We have a new retail concept offering modern in-store experience. We have rolled it out already to more than 50 dealers, 50% of the dealerships around the world, and we will grow this number in the next three years to roughly 85%. Second topic, customer service. The numbers still look great. We have a car park of 28 million. We have a service retention of 90% for the younger products, but that's no reason to lean back. So we still have to invest in innovative service concepts.

So now I've talked about the brand I've talked about the product.

But I said earlier on it's about customer experience because this combination is what really drive loyalty.

So let's start with the retail network we have.

A new retail concept offering modern install experience we have rolled it out already to more than 50 day, let's say, 50% of the dealerships around the world and we will grow this number in the next three years to roughly 85%.

Second topic customer service.

The numbers still look great. We have a car park of $28 million, we have a service retention of 90% for the younger product.

That's the reason to lean back so we still have to invest in innovative service concept. That's why we're in the middle of Rolling out mobile service to make sure that we come to the customer if he wants his vehicle to be serviced at all.

Mathias Geisen: That's why we are in the middle of rolling out mobile service to make sure that we come to the customer if he wants his vehicle to be serviced at home. And we also increase our activities when it comes to customer events. We launched last year our so-called Silver Arrows program for top-end customers, where we really offer money-can't-buy experiences to get closer, contact and more fascination for the brand as well. So having talked about the brand, having talked about the product and customer experience, the question is now: how do we orchestrate all of it? One year ago, we decided to merge all activities in marketing, sales, and financial services into one area of responsibility to make sure that all the customer-facing offers, offers are managed out of one hand. So we can manage the complete life cycle as one integrated profit pool.

And we also increased our activities when it comes to customer events, we launched last year, our so called silver arrows program for top end customers, while we really offer money can't buy experiences to get closer contact and more fascination for the brand as well.

So having talked about the brand having talked about the product and customer experience. The question is now how do we orchestrate all of it.

One year ago.

We decided to merge all activities in marketing sales and financial services into one area of responsibility to make sure that all the customer facing offers offers.

Minutes out of one hand, so we can manage the complete life cycle as one integrated profit pool, that's pretty unique to the industry. That's also pretty new trough. We saw the first of January with this concept that we believe that we can increase retention, even further, especially given that we already have.

Mathias Geisen: That's pretty unique to the industry. That's also pretty new to us. We've started 1 January with this concept, but we believe that we can increase retention even further, especially given that we already have 70% of our customers having a service, a finance, or a leasing contract. We believe we can increase this number even further and drive retention to make it overall a profitable overall result. So that's new. Now, I talked a lot about the global approach. Now let's look into the regions. Let's start with Europe. Europe has a slightly above average, top-end share, 50% entry, and behind China, with 40%, the biggest region when it comes to battery electric and plug-in hybrid vehicles. For us, it is the biggest sales was the biggest sales region last year. So what do we want to do?

70% of our customers, having a service.

Finance or a leasing contract and we believe we can increase this number even further and drive retention to make it overall a profitable.

Our result, so that's new not talked a lot about the global approach now, let's look into the regions, let's start with Europe.

Europe has a slightly above average top end fell 50% entry and behind China with 40% the biggest region. When it comes to battery electric and plug in hybrid because for US. It is the biggest say, what's the biggest phase III.

Last year, so what do we want to do first we will close the white spots right. Now there is no electric C class there is no electric TLC.

Mathias Geisen: First, we will close the white spots. Right now, there is no electric C-Class; there is no electric GLC. Second, we will continue offering EU-specific products like the CLA Shooting Brake, or as I just mentioned, the entry model below the CLA. We will also apply an optimized channel mix to make sure that we best balance volume and profitability, and we will further roll out the agency model, already covering 50% of our European sales. This number will go up for the years to come because we are in the midst of rolling it out to other markets as well. If we look into the US market, that's a different market. Extremely high top-end share, 30%. 75% of the customers decide to go for an SUV or an SUC, and they have a combustion engine share of 85%. So what do we do here?

Second we will continue offering EU specific products like the CLA.

Suiting break all as I just mentioned the entry model.

Below the CLA.

We will also apply and optimize channel mix to make sure that we best balance volume and profitability and we will further rollout the agency model already covering 50% of our European sales. This number will go up for the years to come because we are in the midst of rolling it out to other markets.

Well.

If we look into the U S market, that's a different market extremely high top entry off 30%, 75% of the customer decides to go for an SUV or on efficacy.

And they haven't come.

Combustion engine share of 85%. So what do we do here of course, we fully leverage the U S tailored Suvs, we already built in the United States.

Mathias Geisen: Of course, we fully leverage the US-tailored SUVs we already build in the United States. We will offer high performance and highly efficient combustion engines, including a brand-new V8. But we will also work on the other end, and not only launch our battery electric vehicles, but especially also focusing on the introduction of high-performance battery electric vehicles, like AMG.EA, Ola referred to it earlier on. We will also benefit from our cooperations we have on site with Microsoft, Google, NVIDIA, and of course, we clearly intend to increase our localization activities. As you know, right now, in the United States, we build the EQ SUVs, but as well, and with the majority, the GLE and the GLS. In addition to that, we intend to also produce the GLC in the United States in the next years.

We will offer high performance and highly efficient combustion engines, including a brand new V. Eight.

But we will also work on the other end and not only launched our battery electric vehicles, but especially also focusing on the introduction of high performance battery electric vehicles like A&P a at all a rift.

You referred to it earlier on.

We will also benefit from our corporations, we have outside with Microsoft Google Nvidia.

And of course, we clearly intend to increase our localization activities as you know right now in the United States, we built the EQ Suvs, but S well and with the majority of the Chilean Vitriol F. In a different silhouette, we intend to also produce that you'll see in the United States in the next.

Yes, so that's our approach for the United States, but.

Mathias Geisen: So that's our approach for the United States, but if you want to increase the resilience of the business system, only looking at the United States and at Europe is not good enough. You also have to look at all the other regions, and they are very heterogeneous. We've grown nicely last year in those regions, and they are very heterogeneous, and there is not the one-size-fits-all approach for all of them. So we apply flexible strategies tailored for each market. If I say they are so heterogeneous, what, what do I mean? Let me give you an example when it comes to the products. There are markets in Asia, where customers formerly having driven luxurious sedans, now tend towards grand limousines, MPVs, et cetera. That's a segment we can definitely attack with our VLE and VLS.

If you want to increase the resilience of the business system only looking at the United States and at Europe is not good enough. You also have to look at all the other regions.

And they.

They are very heterogeneous with grow nicely last year in those regions and they are very heterogeneous and there is not the one size fits all approach for all of them. So we apply flexible strategies tailored for each market.

If I say there so heterogeneous what do I mean, let me give you. An example, when it comes to the product there.

There are markets in Asia.

The customers, formerly have having driven luxuries Vedanta now turn towards Grand Limousines, Mpv's et cetera. That's a segment, we can definitely attack with our via E. N V. L. S. He can also perfectly leverage our production network with CK D. S. K D NCB Hugh but.

Mathias Geisen: We can also perfectly leverage our production network with CKD, SKD, and CBU, but also for the countries where we have free trade agreements with export from China. We will fully utilize the free trade agreements now in place, for example, for India. In India, we are already the number one player of the premium brands, and we'll definitely build on that and increase our activities here going forward. So let me sum it up. We have a great brand backed by measurable customer satisfaction. We're ahead of the biggest launch and technology campaign we ever had, and we have regionally specific strategies to tackle profitable growth around the globe. Will it be easy to reach 2 million? Definitely not, but we are, we have the right ingredients to get that done.

Also for the countries, where we have free trade agreements with export from China.

And we will fully utilize the free trade agreements now in place for example for India and India. We are already the number one player of the premium brands and will definitely build on that and increase our activities here going forward.

So let me sum it up.

We have a great brand backed by measurable customer satisfaction. We're ahead of the biggest launch in technology campaign, we ever had.

And we have regionally specific strategies to take the profitable growth around the globe.

Will it be easy to reach 2 million definitely not but we are who have the right ingredients to get that done.

Okay.

Mathias Geisen: Before I head over to Oliver Thöne to give you insights on how that looks in China, I would like to finish with a kind of sneak preview. It's our new commercial for the GLC, and from our perspective, it perfectly embodies what the future holds. It's about performance, emotion, and customer excitement. Ladies and gentlemen, thanks for your attention.

Before I hand over to Oliver tuna to give you insights on how that looks in China I would like to finish with a kind of sneak preview, it's our new commercial for the TLC and from our perspective, it perfectly and bodies what the future holds it's about performance.

Emotion and customer excitement, ladies and gentlemen, thanks for your attention.

Good morning, Kevin.

Christina Schenck: Good race, Kimi. There's nothing there, sir. Ciao. Do you know where Kimi is? He's having a massage.

[Video Narrator]: Good race, Kimi. There's nothing there, sir. Ciao. Do you know where Kimi is? He's having a massage.

They're not convinced.

Yes.

Oh.

Right.

Yes.

Okay.

[music], John one of the fast growth there.

Okay.

Yes.

Okay.

Having these massage.

Okay.

Yes.

Yeah.

Sure.

[music].

Mathias Geisen: China, you have heard it probably 50 times, and it's on the top of all automotive thoughts right now. My name is Oliver Thöne. I'm living in China since 1 year. I'm leading the China business of Mercedes-Benz since 1 year, and it's my privilege to give you an update of what is the situation, and most importantly, what is the outlook. When we talk about the market in China, it's unmistakably the most dynamic market in the world. We see pricing pressure, we see new competitors and entrants in nearly every segment, and thus, heavy shifts in what used to be the structure of the market. Yes, Mercedes-Benz sales in China were down, but I invite you to look behind the figures. The overall segment for premium vehicles was down 15% if you make a cut above CNY 400,000.

Yeah.

Okay.

China U.

You've heard it probably 50 times.

On the top of all automotive thoughts right now my name is Oliver tuna I'm living in China since one year I'm, leading the China business of Mercy dispense since one year and it's my privilege to give you an update of what is the situation and.

And most importantly, what is the outlook.

When we talk about the market in China, It's unmistakably the most dynamic market in the world.

We see pricing pressure.

We see new competitors and entrance in nearly every segment.

And thus heavy shifts and what used to be the structure of the market.

Yes, Marci to spend sales in China were down.

But I invite you to look behind the figures.

The overall segment for premium vehicles was down 15%, if you make a cut above 400000 RMB.

And that segment Mercy dispense retained and some one position.

Mathias Geisen: In that segment, Mercedes-Benz retained its number one position.

We are also leading in luxury sedans.

Oliver Thöne: ...We are also leading in luxury sedans, and our customers enjoy among the highest residual values. And compared to our peers, we realize the highest transaction prices. How is that possible? We have a still growing customer base in China, more than 7 million, and they are as digital savvy as you hear it. It's a very specific way of living, and our customers, everybody, spends up to 6 hours per day on their devices. The device has a special role. You can do anything online. Obviously, food and buying clothes is no surprise. But in China, you buy everything online, including cars. To cater for that demand, Mercedes-Benz has created a very specific app with a local flavor. We have 2.4 million active users every month and interact in a direct-to-customer channel. Again, we also achieved customer satisfaction number one for a second consecutive year.

And our customers enjoy.

Enjoy among the highest residual values and compare to our peers, we really realize the highest transaction prices.

How is that possible.

We have a still growing customer base in China.

More than $7 million.

And they are as digital savvy as you hear it.

It's a very specific way of living and our customers everybody spends up to six hours per day on their devices.

The device has a special role you can do anything online, obviously food and buying clothes, it's no surprise, but in China, you buy everything online including cars.

To cater for that demand Mercedes Benz has created a very specific app with a local flavor. We have 2.4 million active users every month and interact in a direct to customer channel.

Again, we also achieved customer satisfaction number one for a second consecutive year.

Looking at 25.

Oliver Thöne: Looking at 2025. 2025 was no year of growth, but it was a year where we calibrated our operations, we invested into the future, and we shaped the company for future success. 575,000 units were the result of deliberate sales steering to assure the highest possible net revenue quality. We do that by upgrading vast parts of our portfolio, and thus providing good reasons for customers in investing in a Mercedes-Benz. Also, intelligence is updated with the update functionality Ola described, and I'll dig deeper into it in a moment. Our customers in China are among the youngest in the world. In fact, 37 is the average age, and when acquiring an S-Class, it's 39.

25 was no year of growth.

But it was a year, where we calibrated our operations.

We invested into the future and.

And we shape the company for future success.

575000 units were the result of deliberate sales steering to assure the highest possible net revenue quality.

We do that by upgrading vast parts of our portfolio and thus providing good reasons for customers are in investing in MRC dispense.

Also intelligence is updated with the update functionality all of described and I dig deeper into it in a moment.

Okay.

Our customers in China are among the youngest in the World. In fact 37 is the average age and when acquiring an S class it's 39.

That customer base is self huge importance.

Oliver Thöne: That customer base is of huge importance, and to grow and access the younger customer base, we signed the world's best table tennis player, Wang Chuqin, last year, to become brand ambassador. But behind the scenes, we have always been investing into the future because we believe in the future of China. Now, we were amongst the first to invest into Momenta. That Momenta, which has partnered now with many OEMs, we were the first in 2017 to invest into it. We have deepened our partnership with ByteDance. You will see results in a moment. But we also ventured out to invest into a new company, Afari. Afari is an AI startup, which is heading out to change AI in the cabin. Now, in such a year, it's utmost important to work on cost.

And to grow and access the younger customer base, we signed the world's best table tennis player one suite sing last year to become brand ambassador.

But behind the scenes, we have always been investing into the future because we belief in the future of China.

Now we were amongst the first to invest into momentum.

That momentum, which just partner now with many Oems.

We were the first in 2017 to invest into it.

We have deepened our partnership with <unk>, you would see results in a moment.

But we also.

Ventured out to invest into a new company a foray.

Our fiery is an AI startup, which is heading out to change AI in the cabin.

Now in such a year.

The utmost important to work on cost.

Oliver Thöne: One year ago, you have been promised cost targets, and the team is working day and night to deliver on these, and we are well on track. Now, you're most interested in what is the future looking like? Now, China will remain the single most important market for Mercedes-Benz. It is also fair to say, competition won't go away. Pricing pressure in the foreseeable future won't go away. That is why we defined a clear strategy around technology and products, a deeper localization, customer centricity, and everything underpinned by operational excellence, and we follow through with a focused implementation. We talked about the values which make a Mercedes a Mercedes-Benz, and you know them. It is safety, design, comfort, quality, and intelligence. But this intelligence in China, it requires to have a local flavor.

One year ago, you asked been promised cost targets.

And the team is working day and night to deliver on this and we are well on track.

Now.

You are most interested in what is the future looking like now.

Now.

China will remain the single most important market pharmacy dispense.

It is also fair to say.

Competition won't go away.

Pricing pressure in the foreseeable future won't go away.

That is why we defined a clear strategy around technology and products.

A deeper localization.

Customer centricity and everything underpinned by operational excellence.

And we follow through with a focused implementation.

We talked about the values, which may come receipt of some receipt expense and you know them. It is safety design.

<unk> quality and intelligence.

But this intelligence in China. It requires to have local flavor like the user interface I spoke on the App you have to cater for the specifics of that market.

Oliver Thöne: Like the user interface I spoke on the app, you have to cater for the specifics of that market. Ola described how Level 2++, point-to-point navigation is actually something which is becoming ever more standard in China, and the rest of the world is now catching up. This journey, you have to be part of this industry, and to do that, we teamed up with the best. That is the advantage of MB.OS. It is partnership-agnostic. We are able to deliver a tailor-made UI, a deep integration with local software and other technology players. This might sound a bit abstract. Let me dissect it into two elements: one, intelligent cabin, second, advanced driving. To not just talk about it, let's have a look what is possible. We do this; we integrate the doorbell intelligence and speech recognition systems with local software partners to have the best performance....

All I described how level two plus plus point to point navigation is actually something which is becoming ever more standard in China and the rest of the world is now catching up.

This journey you have to be part of this industry.

And to do that we teamed up with the best.

That is the advantage of M. U S. It is partnership agnostic we.

We are able to deliver a tailor made <unk> a deep integration with local software and other technology players.

This might.

It sounds a bit abstract.

Let me dissect it into two elements, one intelligent cabin second advanced driving.

And.

So not just talk about it.

Let's have a look what is possible.

We do this we integrate the dual power intelligence and speech recognition systems with low cost software partners to have the best performance.

Oliver Thöne: Why is that complex? The system, and you know, has, there's not one Chinese spoken. There's Mandarin, there's Cantonese, and there are very many specific local variants, and my Western tongue is adding another addition to Mandarin. But the system needs to understand that, and that is possible with the power of AI. So we took the CLA together with an engineer on a ride from Beijing to Shanghai, and let's take you on that ride.

Why is that complex the.

The system and you know theres not one Chinese spoken Theres Mandarin Cantonese and there are very many specific local variants.

And my Western tongue is adding another addition to Mandarin.

But the system needs to understand that and that is possible with the power of AI.

So we took the CLA together within engineer on the ride from Beijing to Shanghai, and let's take you on that right.

Yes.

Venture.

Christina Schenck: Hello, Mercedes. ...

What's young Beijing.

Thank you.

Great.

Yeah.

So that's that has lovaza for their holiday.

Oliver Thöne: Oh, my God!

She said Oh my God.

Thank you.

Yeah, you don't hold meal.

Neil venture.

Well in la.

Christina Schenck: ...

Right.

Yeah.

Okay.

Shanghai, the kincade semi out.

Okay.

Thank you.

Oliver Thöne: What you have seen, the system understands my weak Chinese. It understands his, the local dialect. You can throw in a second command, while I have just thrown in my command to have a massage. That is possible with the compute and the power of AI. Now, it is cool to show it here, but what is more important to us, 97% of our customers activate this feature just this January. They love it, they post about it, and that is the first part. Now, let's look at the second part, ADAS. For ADAS, it is a very specific situation in each and every city in Shanghai in China. We teamed, therefore, up with Momenta to bring Mercedes-Benz safety-proven intelligence in developing these systems, but team it up with an expert on the specifics for the market. Now, allow me to ra...

Sure.

Thank you Danielle.

Yes.

What you have seen the system understands my weak Chinese it understands his the local dialect you can throw in a second command while I have to just thrown in my comment to have a massage that is possible with the compute and the power of AI.

Now it is cool to show it here.

But what is more important to us 97% of our customers activate this feature just this January.

Love It they posted about it and that is the first part.

Now, let's look at the second part.

Thus for.

Four eight us it is a very specific situation in each and every city and Shang in China.

And we team up with momentum to bring Mercedes Benz safety proven intelligence in developing these systems, but teaming up with an expert on the specifics for the market.

Now allow me to rate and the rate of video.

Oliver Thöne: Narrate a video, which we have filmed. It is our chief software engineer in China, Wang Xing, and the CEO of Momenta, Cao Xudong, who sit in this car. Let's have another look. You see here, they drive through the city. You have the hands-off, and just the possibility of this car to identify complex traffic situations. You have this smooth, human-like roll-in to the car in front of you. You kind of do not interrupt the driving attractivity by harshness, and you can manage these systems and situations by the car automatically. You identify traffic lights, and the car comes to a standstill, and it will accelerate. You see the cut-in of a vehicle and passenger crossing. This is automotive safety level D, implemented by us together with Momenta. And what is unique about it, we call it cooperative steering.

Which we affirmed it as our chief software engineer in China.

One thing and the CEO of momentum she dong, who sit in this car let's have another look.

You see here the drive through the city you have the hands off.

And just.

The possibility of this car to identify complex traffic situations.

You have to smooth human like rolling to the car in front of you you kind of.

Do not interrupt the driving attractive at T by Harshness and you can manage these systems and situations by the car automatically.

You identify traffic lights, and the car comes to a standstill and it will accelerate you'll see the cutting of the vehicle and passenger crossing this is auto med to safety level D implemented by us together with momentum.

And what is unique about it.

We call it cooperates of steering.

Oliver Thöne: The machine and the driver interact. They don't fight each other. No one else in the industry can offer that level. Why is that crucial? Today, to have that level of intelligence, you were forced to buy a new energy vehicle. That is why Mercedes-Benz is going to launch a lot of new energy vehicle. But this unconditional intelligence, we will bring into the whole combustion lineup. We will be the first one to offer uncompromised intelligence and no question of drivetrain choice. How will this journey start? We will launch the electric GLC, extended wheelbase, locally adapted vehicle with a lot of local supply chain ingredients. It will extend today's imported GLE, will be by the mid of the year, a fully localized, extended GLE, including all the intelligence I've described. And of course, in the fourth quarter of this year, we will also have the S-Class.

The machine and the driver interact they don't fight each other no one else in the industry can offer that level.

Why is that crucial.

Yeah.

To date to have that level of intelligence.

You were forced to buy a new energy vehicles.

That is why mercy dispense is going to launch a lot of new energy vehicle, but this unconditional intelligence, we will bring into the whole combustion lineup, we will be the first one to offer Uncompromised intelligence and no question of drivetrain choice.

Will this journey start we will launch the electric GLC extended wheelbase locally adapted vehicle with a lot of local supply chain ingredients. It will extend todays imported GLA will be by the mid of the year fully localized extended shield.

E, including all the intelligence I've described and of course in the.

Fourth quarter of this year, we will also have the S class.

Oliver Thöne: Now, you saw the software stack in the CLA in action. This software stack is constantly evolving, so the GLC and the S-Class will have even updated iterations in the market. By that, and by seven China-exclusive models, we are setting and laying the foundation for growth in China. All of our cars will offer more space, more comfort, and more intelligence. How is that possible? We have the so-called dual engine. We have 2,000 engineers working, one part in Beijing, directly at the TCC, next to our BBAC manufacturing, and in Shanghai. That is absolutely crucial to live and breathe the pace of the Chinese automotive industry. We deeply integrate with the local supply chain, and we can iterate, plus leverage the cost base, which is advantageous....

Now you saw the software stack and the CLA in action.

This software stack is constantly evolving solve the GLC and the S class will have even updated iterations in the market.

By that.

And by seven China exclusive models, we are setting and laying the foundation for growth in China.

All of our cars will offer more space.

More comfort.

More intelligence.

How is that possible.

We have the so called dual engine.

We have 2000 engineers working one park in Beijing directly at the TCT next to our <unk> manufacturing.

And in Shanghai.

That is absolutely crucial to live and breathe the pace of the Chinese automotive industry.

We deeply integrate with the local supply chain and we can iterate plus.

Plus leverage the cost base, which is adventurous.

At the same time, the Shanghai engine will continue to deliver software and still this month.

Oliver Thöne: At the same time, the Shanghai engine will continue to deliver software, and still this month, our customers will get the first OTA, even for the MB.OS in the market, just launched late last year. Sometimes these results transfer to the world, and the rear seat entertainment in the S-Class was, in fact, done in China for the world. The second part is production. I know right now there's no factory picture without a robot, but you're well invited to visit our factory in China. You will actually see a robot, including a humanoid, if you wait until March. More than 6 million vehicles have been produced and 20 localized models. We are constantly improving material cost position, and at the same time, the BBAC is the first zero-carbon plant certified in China. That is a testament to our green manufacturing promise.

Our customers will get the first Oh ta even for the MBS and the market just launched late last year.

Sometimes these results transfer to the world and the rear seat entertainment and the S class was in fact done in China for the World.

The second part is production.

And I know right now there's no factory picture without a robot.

But you're well invited to visit our factory in China, you will actually see a robert including a humanoid if you wait until March.

More than 6 million vehicles have been produced and 'twenty localized models, we are constantly improving material cost position.

And at the same time the BBA seat is the first zero carbon plant certified in China that is a testament to our green manufacturing promise.

This market requires absolute resilience in all parts of the operation.

Oliver Thöne: This market requires absolute resilience in all parts of the operation. Therefore, we have strategic pricing, competitive, but not utterly aggressive. We work with our dealer partners, which are of strategic importance. They are the direct interface to our end customers, and we enhance that by building up the aforementioned digital channels. So we have a seamless digital and physical interface to our customers. New retail formats, which were announced by Matthias, we will also have those rolling out in the second half of 2026 to more than three cities. As said before, delivering on cost targets is more than just a promise. We are well on track to not only achieve, but to exceed the targets defined here one year ago, and we will continue to do so, including adjustments wherever necessary in our operations. Now, the big question is: When will this growth kick in?

Therefore, we have strategic pricing competitive, but not utterly aggressive.

We work with our dealer partners, which are of strategic importance. They are the direct interface to our end customers and we enhance that by building up the aforementioned digital channels. So we have a seamless digital and physical interface to our customers.

New retail formats, which were announced by Mathias. We will also have dose rolling out in the second half of 2026 to more than three cities.

As said before delivering on cost targets is more than just a promise.

We are well on track to not only achieve but to exceed the targets defined here one year ago, and we will continue to do though including adjustments wherever necessary in our operations.

Now the Big question is when will this growth kick in.

2026 is going to be a year of ramp ups.

Oliver Thöne: 2026 is going to be a year of ramp-ups. We will have, in the first half, a lot of changeover in the factory, and later on, we will have, in the second half, ever more launches kicking in. The environment we foresee to remain competitive, but we are absolutely committed to turn every opportunity into growth. 7 dedicated models for the Chinese market, and each of them, 100% China fit. This will ensure the highest net revenue quality and at the same time capitalize on local cost. Now, talking about net revenue quality, talking about cost, I think, Harald, that is a good bridge to our CFO. Thank you very much.

We will have in the first half a lot of change over in the factory and later on we will have in.

In the second half ever more launches kicking in.

The environment, we foresee to remain competitive, but we are absolutely committed to turn every opportunity into growth.

Seven dedicated models for the Chinese market.

And each of them, 100% China fit.

This will ensure the highest net revenue quality and at the same time capitalize on local cost.

Now talking about net revenue quality talking about cost I think highlighted that as a good bridge to our CFO. Thank you very much.

Yeah, Thanks Ali no pressure on vendor.

Harald Wilhelm: Yeah, thanks, Ollie. No pressure on. Yeah, wonderful. Well, in that section, obviously, I mean, we're going to wrap up what you heard before. I want to give you an update on our cost efficiency measures, where we are compared to what we said a year ago here, and then, maybe have a glimpse on, what it means in terms of margin, cash generation moving forward, and, return for our investors. So before doing that, just a minute, one slide, I mean, to outline what are the assumptions on which we make these forward-looking statements. I will not, try to entertain you or educate you on, the macro and the market assumptions, and in detail, you know them much better than I do.

Wonderful well.

And that section, obviously, mainly we're going to wrap up what you've heard before I want to give you an update on our cost efficiency measures, where we are compared to what we said a year ago here and then yeah. Maybe you have a glimpse of what it means in terms of our margin cash generation moving forward and return for our investor.

Yes.

So before doing that adjustment.

One slide to outline what are the assumptions on which we make these forward looking statements I will not try to entertain you educate you on the Mako and the market assumptions when in detailed in general that much better than I do.

Harald Wilhelm: But all in all, I mean, you see what is the assumptions we take on the macro side of the things, and then what we derive from there is our market expectations. This is not sales expectations; this is market expectations. So in essence, what you see, we see constructive, good momentum for the US. We see, in terms of macro and hence also in terms of market evolution, may know more moderate or stable development in Europe. I think, we are realistic about the dynamic, very competitive market environment in China. Hence, we take a cautious view on China in terms of the market, and we see good grounds for the overseas to build momentum. On top of that, we all know lots of volatilities, lots of challenges, and risks.

But all in all I mean, you see what is the assumption that we take on the macro side of things and then what we derived from there is our market expectations. This is not sales expectations as market expectations. So in essence, what you see we see constructive good momentum for the for the U S. We see and touch.

Of Mako and hence also in terms of market evolution made a more moderate or stable development in Europe, I think EMEA are realistic about the dynamic a very competitive market environment in China, Hence, we take a cautious view on China in terms of the market and do we see good grounds for the overseas to build more.

Mental on top of that we all know lots of volatility is lots of challenges and risks you see some on the on the slide but maybe also one way or the other of the opportunities, which you also see on the slide but let's not dig deeper I would say on this one that is now really go to the real stuff. So real stuff I mean, you heard it loud and clear.

Harald Wilhelm: You see some on the slide, but maybe also one or the other of the opportunities which you also see on the slide. But let's not dig deeper, I would say, on this one. Let's now really go to the real stuff. So real stuff, I mean, you heard it loud and clear, in terms of the plan of attack. So, in 2025, starting from the 1.8, we explained, I mean, why 2026 is a ramp-up year, more, I mean, with a low start, I mean, in the Q1, than building momentum in the H2.

Terms of the plan of attack so.

In 2020.

By starting from the 1.8, we explained the main why 2026 is a ramp up year.

More I mean was the lower star Dominion into Q1 that building momentum in India in the H, two but clearly with that unprecedented product firework kicking in we will build momentum post 2026 into 2027 and very very clearly we have that to a target of <unk>.

Harald Wilhelm: But clearly, with that unprecedented product firework, I mean, kicking in, we will build momentum post-2026 into 2027, and very, very clearly, we have that to a target of back to 2 million units in mind. Where does it mean we want to do it? Definitely in the US, in Europe, also in the overseas on the back of the products, with a very strong position in the top end, in the core. And clearly, I think there's a message, Matthias, we want to attack and gain back market share. What does it mean for China?

Two 2 million units in mind.

Where does it mean, we wanted to do it definitely in the U S. A.

India in Europe also in the indie overseas on the back of the products with a very strong position in the top end and the core and clearly I think there are some message Mathias we want to attack and gain back market share.

What does it mean for China, well, you've heard before that for 2026, so we take them in a bit of a cautious view, which draws are in the guidance section, whereas said I mean, it's slightly down compared to 2025, but clearly here again with the products coming we want to hold the line in China.

Harald Wilhelm: Well, you heard before that for 2026, we take, I mean, a bit of a cautious view, which was in the guidance section, where I said, I mean, it's slightly down compared to 2025. But clearly here again, with the products coming, we want to hold the line in China and call that a 500,000 to 600,000 units in China. Is that realistic? Is it unrealistic? We think this is realistic. Why so? We have many products coming to the market. If you think about the GLC electric, if you think about the electric C-Class, if you think about, I mean, the C-Class, I said, electric E-Class, obviously, to come. These are products covering our EV white spot, I mean, we're having today. So I think it's perfectly legitimate to go for that level of ambition in China.

And called it a five to 600000 units in China is that realistic is it unrealistic. We think this is realistic why so we have many products coming to the market that if you think about the GLC electric if you think about the electric go see costs. If you think about I mean, the CCAR as I said.

Electric E cars, obviously to come these are products covering R. E V white spot I mean, we're having to date. So I think it's perfectly legitimate to go for that level of ambition in China.

Harald Wilhelm: So that's, I mean, how we want to come up with the 2 million units on a worldwide basis. Looking at the mix, well, on the top end, we clearly have a target of more than 15% top-end share in the mid-term. You might say 2025, you had, I mean, 15% already, and now you're telling me something about 2026 is 14 to 15. That doesn't sound to mean super ambitious. Well, I would suggest you keep in mind that at the same time, we grow the core pretty substantially. So if you look in absolute numbers, I mean, that more than a 15% in the mid-term, means nothing less than more than 300,000 units in the top end.

So that's how we when I come up.

With the 2 million units on a worldwide basis.

Looking at the mix well on the top and we clearly have a target of more than 15% top and share in the midterm you might say 2025, you had to mean, 15% already and now you're telling me something about 'twenty 'twenty six is 14 to 15 that doesn't.

Sounds super ambitious well I would suggest you keep in mind that at the same time, we grow the core pretty substantially.

So if you look in absolute numbers, I mean that more than a 15% in the midterm means nothing less than more than 300000 units in the top end, which I think is in terms of ambition, but also in terms of absolute size clearly a leading position today.

Harald Wilhelm: Which I think is, in terms of ambition, but also in terms of absolute size, clearly a leading position, today, but also in the future, and that is a growth of around 15% of unit sales in the top-end segment. Obviously, supported by beautiful products, I mean, like the S-Class, the GLS, I mean, to come, a super strong AMG product lineup, in ICE, in EVs, in particular in the mid-size segment, and obviously on the top of the crown with the AMG EA to come. On the xEV side, 26, 21 to 23%. I think I explained it before in terms of the BEV share, I mean, growing, maybe the plug-in, in the entry segment, migrating into the EV segment.

Today, but also in the future and that is a growth of around 15% of unit sales in the top end segment, obviously supported by beautiful products I mean like the S class. The G. L. S min to come a super strong AMG product lineup.

In ice in E visa in particular in the midsize segment and obviously on the top of the crown with the AMG EEA to come.

On the <unk> side.

26, 21% to 23% I think I explained it before in terms of the Bev Shea main growing maybe the plug in.

In the entry segment migrating into the EV segment is way in 2026, you don't see that step up in the absolute number in terms of HCV sure yet, but clearly moving forward we.

Harald Wilhelm: That's why in 2026, you don't see that step up in the absolute number in terms of xEV share yet, but clearly moving forward, we have a 40% xEV share in mind. And again, here, what does that mean? That means around 800,000 units in terms of xEV vehicles, and that means nothing else than doubling it compared to today. If we talk about pricing environment, let me say very clearly, we command the price premium, thanks to the very strong brand and the products today, and we will continue to do so also in the future. However, as part of our tech and as part of our game plan, we clearly defined that we want to step up, and we did already, so the competitiveness in terms of the pricing.

We have a 40% ex EV share in mind and again here what does that mean that means around 800000 units in terms of.

Ex EV vehicles, and that means nothing else than doubling it too compared to today.

If we talk about <unk>.

Pricing environment, let me say very clearly.

We command the price premium thanks to the very strong brand and the products of today and we will continue to do so also in the future.

However, as part of our tech and that is part of our game plan. We clearly defined that we want to step up and we did already so the competitiveness in terms of the pricing. So we adjust to market realities, we're ready to do so wherever needed and with the efficiency.

Harald Wilhelm: So we adjusted to market realities. We're ready to do so wherever needed, and with the efficiency work we concluded and we continue to do, we create the flexibility, the headroom, to do so. But again, we're protecting and we are optimizing value, but we are opening opportunities, I mean, for volume, and that is, mean, the key recipe, why we also, next to the products, believe we can come back to the 2 million units in the midterm. Over the midterm, that should then also stabilize pricing, and it should also enable ASP to grow over the midterm. If then you think about the revenue side of things, so 2026, I commented before, I mean, should be probably rather flattish. If you look, I mean, beyond that, clearly, the product fireworks, the sales will generate also revenue momentum.

Work, we concluded and we continue to do.

We create the flexibility the headroom to do so, but again, we're protecting and optimizing value, but we are opening opportunities are meaningful volume and that is the key recipe. While we also next to the products. We believe we can come back to the 2 million units in there.

The mid term.

Over the midterm that should then also stabilized pricing and it should also enable a S P to grow over the midterm.

If.

Do you think about the revenue side of things. So 2026, I commented before men should be probably rather flattish. If you look I mean beyond that clearly the product fireworks to sales will generate also revenue momentum. If you then think about.

Harald Wilhelm: If you then think about the top-end evolution I mentioned just before, the mix evolution, but also the very strong growth potential, I mean, in the core segment, you can expect in the revenue side, on top of the, the sales volume effect, also a favorable mix effect. I mean, with this, we target a CAGR starting from 2026 of approximately 7% on revenues. Now, let's switch gears a bit in terms of from the market. What does it mean in terms of the industrial base, and how do we adjust the industrial base? First, last year, we mentioned already, we're coming from a 2.8 million units some time ago. In 2024, we brought it down to 2.5 million units max production capacity. So what is the target?

The top end evolution I mentioned, just before the mix evolution, but also has a very strong.

<unk> potential in the core segment you can expect in the revenue side on top of the sales volume effect also a favorable mix of men with this we target a CAGR.

Starting from 'twenty to 'twenty, six overbook smitley, 7% on revenues.

Now, let's switch gears a bit in terms of from the market what does it mean in terms of the industrial base and how do we adjust the industrial base.

First.

Last year, we mentioned already we're coming.

From a $2 8 million units are some time ago in 'twenty, 'twenty, four which brought it down.

Two two and a half a million units Max production capacity.

So what is the target domain in conjunction.

Harald Wilhelm: I mean, in conjunction, I mean, with the sales target, I mean, just talking about before, obviously, you keep some flexibility. That's why we said to basically target for 2.2 million by 2028. What did we accomplish in 2025? Well, we did adjust capacity in Europe and Germany by roughly, I mean, 100,000 units. We did adjust the capacity in China by around 120 units. What are additional activities we're doing moving forward in 2026, 2027? The GLB will end production in Mexico, and then we'll move them to Kecskemét, so that is approximately 100,000 units. We'll shift and gear up the Kecskemét facility, and it will become the largest production site in Europe after the full ramp up.

Conjunction I mean with the sales socket meant just talking about before obviously you keep some flexibility. That's why we said that basically target for 2.2 million by 2028 what.

What did we accomplish in 2025, well, we did adjust capacity in Europe in Germany by roughly 100000 units, we did address the capacity T and in China by around 120 units what are additional activities that we're doing moving forward in 2026 2027.

The G L. B will end production in Mexico, and then we'll move from into AR to cash commercial so that is approximately a 100000 units.

We will shift and gear up the cash commit facility.

And thereby it will become the largest production site in Europe after the full ramp up.

Harald Wilhelm: On top, we still have optionality in remote location, and we also have flexibility, depending on market evolution, I mean, to adjust further in China in case need be. At the same time, that is a very flexible production network, which can accommodate the entire product portfolio and changes on the demand side. And as you know, we also can run the EVs and the ICEs from the same production lines, and that's a fundamental principle we're having today, which we retain also in the future. Well, overall, let's have a look on the localization, where we are and where we're heading to. Globally, we target to ramp it up further from 60 to 70%. As Ola pointed out, it's always a good principle, I mean, to serve the markets from local.

On top we still have the optionality and remote location and we also have flexibility depending on market evolution to adjust further in China in case need be at the same time that is a very flexible production network, which can adult accommodate the entire product portfolio.

Palio and changes on the demand side and as you know we also can run the evs and the ice from the same production lines and that's the fundamental principle that we're having today, which we maintain also in the future.

Well overall, let's have a look on the localization, where we are and where we're heading to a globally, we target to ramp it up further from a 60% to 70% as all appointed out.

It's always a good principal meant to serve the markets from local.

Harald Wilhelm: Even more so, however, I mean, under the geopolitical framework we're facing in these days. What does it mean by the key regions? If you see the US on the left-hand side of the chart here, clearly, we have a target to serve, I mean, more than 50% of the demand in the US by local production. And yes, clearly, I mean, there is the potential to extend the production capacity further. And what other product could be better suited to do so than next generation GLC to do so? Which means, US is and will be the home of mid and large-sized SUVs serving the local markets, but then also serving Europe and the overseas markets in terms of the SUVs.

Even more so however, I mean under the geopolitical Frey.

Framework, we're facing and in these days.

What does it mean by the key regions.

If you see the U S. So on the left hand side of the chart here clearly we have a target to serve them in more than 50% of the demand in the U S by local production and yes, clearly mean, there is the potential to extend the production capacity mean further and what.

Other product, meaning it could be better suited to do so then next generation GLC to do so which means the U S is and will be the home of our mid and large size Suvs are serving the local markets. But then also serving are Europe and the overseas markets in two.

Of the Suvs.

Harald Wilhelm: If you think about, I mean, Europe, I mean, majority of the European demand is being served already today, I mean, from local production. So Europe, I would say, I mean, remains, I mean, the home of the top end and the sedans. This is where, I mean, the craftsmanship is at home. This serves, I mean, the demand in Europe. The GLB shift I mentioned already, which is coming from Mexico to Europe, but clearly, I mean, it is the home of the top ends and the sedans, which get exported from Europe on a global scale. And then looking at China, so clearly more than 80% in terms of local supply from the local production. This year, by the middle of 2026, we will localize the GLE long wheelbase in China.

If you think about domain Europe I mean, the majority of the European demand is being served already today when from a local production. So Europe mode say, mainly remains the main the the home of the top end and to sedans. This is where I mean, the craftsmanship is at home.

This serves some indeed the demand in Europe, the <unk> shift I mentioned already which is coming up from Mexico to Europe, but clearly mean it is the home of the top ends and the sedans, which get exported from Europe on a global scale and then looking at the China, So clearly more than 80 per.

Ascent in terms of the local supply from the local production.

This year by the Middle of 2026, we will localize the G. L E long wheel base in China next to the market presence. It offers so strong cost advantages.

Harald Wilhelm: Next, to the market presence, it offers a strong cost advantages. It means that the imports are basically limited to the top-end products coming to China, and at this stage, we do not foresee to export from China to Europe or the US. Switching gears, more to the cost side. Production costs being first chapter in here. So, what did we accomplish? Well, in the last years, between 2022, 2024, we did achieve already, I mean, 10% production cost down, and we didn't stop there. Last year, we said we want to go for another 10% between 2024 and 2027 in terms of production cost, measured as cost per unit.

And it means that the imports are basically <unk>.

<unk> do the top end products are coming to China and at this stage, we do not foresee to export from China to Europe or the U S.

Switching gears more to the cost side.

Production costs are being first chapter in here, So what did we accomplish a well.

In the last years between 2022 'twenty 'twenty four we did achieve already mid 10% production cost are down.

But we didn't stop there last year. We said we are we want to go for another 10% between 'twenty 'twenty four and 2027 in terms of our production cost measured as cost per unit.

Harald Wilhelm: I'm happy to report here that in 2025, 4% out of this 10 have been accomplished already. Obviously, sitting in the numbers we were looking at, I mean, before in the first section. So what are remaining levers for 2026 and beyond to get to these 10%? It is the adjustment of capacities, is to work on the efficiencies on the HPVs in the factories, but also in the logistics, just to work on the labor cost. So all levers are being pulled across the entire production network to step up the efficiency level. The other key one, obviously, is the switching gears, the moving east, and the Kecskemét facility offers significant factor cost advantages in the vicinity of 70%.

And I'm happy to report here that in 2025, 4% out of these 10 have been accomplished already.

Obviously sitting in the numbers, we were looking at I mean before in the first section so what our remaining levers for 26 and beyond to get to these 10%.

Well it is the adjustment of capacities is to work on the efficiencies on the HBV is into factories, but also the logistics just to work on the labor cost.

So all levers are being pulled a across the entire production network.

To step up the efficiency level. The other key one obviously is.

The the switching gears to the moving east.

And the cash commit facility offers significant factor cost advantages in the vicinity of 70%. So we are leveraging these and bye.

Harald Wilhelm: So we are leveraging these, and by stepping up the production capacity over there, it means the low-cost share in Europe will double from 15% to 30% by 2027. Very, very important chapter, obviously, given the size of the bill of material, is the material cost and the material cost reduction. What did we say last year? We want to reduce the material cost by 8% between 2024 and 2027. Well, I think good news, in 2025, we did already 2%. And we all know that supply chain is in a tough situation, obviously, as well. So being able to pull off, I mean, 2% here, I think was a very good achievement.

Stepping up the production capacity over there it means the low cost share in Europe will double from 15% to 30%.

By 2027.

Very very important Chad, but obviously given the size of the bill of material is a material cost and the material cost reduction.

What did we say last year, we want to reduce the material cost by 8% between 24 and 2027.

Well I think a good news.

In 2025, we did already 2%.

And we all know that supply chain is in a in a tough situation, obviously as well so being able to pull off mid 2% here I think was a very good achievement. So we clearly have these 8% domain in mind for 2027, but we know what we edit given the competitive environment and also too.

Harald Wilhelm: So we clearly have this 8%, I mean, in mind for 2027, but what we added, given the competitive environment, and also to create ourselves an even more headroom in this competitive market environment, is to step up that effort beyond 2027, and to go from the 8 to an even higher number, i.e., 10, post 2027. So this is, I mean, what we embedded now into our plans. How do we attack that? Well, leverage even more the global footprint, extend the best cost country sourcing. Clearly, China opens up sourcing opportunities for China, but also for the rest of the world. And now we have a clear game plan, I mean, how to pull off these potentials.

To create ourselves from an even more headroom in this competitive market environment is to step up that effort beyond 2027 and to go from the eighth to even higher number at 10.

Post 2027. So this is a man what we embedded now into our plants, how do we attack that well leverage even more the the global footprint extend the best cost country sourcing.

Clearly, China opens up sourcing opportunities for China, but also for the rest of the world and now we have a clear game plan.

Now to.

Paul offer diesel potentials, we add a new participants vein into the supply base, adding new partners with fresh ideas and fresh mindset.

Harald Wilhelm: We add new participants when into the supply base, adding new partners with fresh ideas and fresh mindsets. But not only mean, obviously, working on the supply chain side, also, I mean, we're working internally, and that means also to challenge the design and the specification we are doing, pull forward, mean, more standardization and design to cost initiatives internally, but also jointly with the suppliers. The other chapter I think you're very interested is: how about this famous BEV margin and this question of BEV and ICE margin parity? Maybe I think some update in this respect and news to share here. We now look into the products, I mean, entering into the market, such as the CLA, but now, I mean, let me pick the GLC as an example.

But not only main obviously working on the supply chain side also in brain and we're working internally and that means also to challenge.

The design and the specification we are doing pull forward more standardization.

And our design to cost initiatives internally, but also jointly with the suppliers.

The other chapter I think carryover interested this how about this famous our best margin and this question of a best friend is margin parity.

Maybe I think some update in this respect and news to share here, we now look into the product some in entering into the market such as the CLA, but now let me pick the GLC as an example.

Harald Wilhelm: So we now know the bill of material of that vehicle coming to market. We made substantial progress, I mean, on the battery cost, on the drivetrain cost. We know what it is at the start of the production. I think, I mean, good news to report that on the battery side, we are 30% down compared to predecessor products, with a lot of efficiencies, economies of scale, LFP at work, so the entire tool set. But also the entire vehicle, as such, comes with a lower variable cost bill of material compared to predecessor products.

So we now know that the bill of material of that vehicle coming to market.

We made substantial progress I mean on the battery costs on the drivetrain cost.

We know what it is at the at the start of the production and I think I mean, good news to report to that.

On the on the battery side.

We're 30% down compared to the predecessor products with a lot of efficiencies economies of scale L. S. P. At work so the entire tool set but also the entire vehicle as such it comes with a lower variable cost bill of material compared to predecessor products, but we don't stop.

Harald Wilhelm: But we don't stop there at start of production, and I think that is, I mean, the new element, if you, I mean, bear in mind what I just said before on the material cost. So we'll continue the journey in terms of fundamental cost saving as we go through the life cycle of the product. And if I factor that into account, and I factor also, I mean, all costs, including the CO2 benefit created by the EV vehicles, which I think is a legitimate thing to do, by the way, others are doing it as well, I would say. Clearly, we do see a path now to get to margin parity.

There I had stopped sort of protection and I think that is many of the new element.

I mean bear in mind, what I, just said before in the material cost. So it will continue the journey in terms of fundamental cost saving as we go through the lifecycle of the product.

And if I factor that into account an effect also in all cost, including this Youtube benefit.

Created by the E V vehicles, which I think is illegitimate to think to do by the way others are doing it as well I would say.

Clearly, we do see a pass now to get to margin parity.

Harald Wilhelm: If I take a GLC electric and compare it with a GLC combustion, if I take a C-Class electric and I compare it with the C-Class combustion. If I take the electric E-Class coming with a current E-Class combustion, we see a path to margin parity towards the end of the decade between BEV and ICE. Investments. Well, I think I talked already, I mean, earlier, I mean, today, about cars achieving investment peak in 2025. You see it here on the chart, 12.7. I think with a very disciplined, I mean, investment approach, I mean, in particular on the PPE side, really enabling this tech stack on the R&D side. So 12.7, I mean, is clearly the peak. You see the profiling down 2026 and 2027.

If I take our GLC electric and compare it with juicy combustion if a take a C class electric and then compare it.

With the C class combustion if I take the electric E class coming with the current <unk>.

<unk> combustion, we see a path to margin parity towards the end of the decade between Beth and ice.

Investments.

Well I think I talked already made earlier today about the cars achieving investment peak in 2025, you see it here on the chart 12 point to seven I think of is a very disciplined investment approach I mean in particular on the PPE side.

Really enabling this.

This tech stack on the R&D side, so a $12 7 million is clearly the peak you see the profiling down 26 and 27.

Harald Wilhelm: And what I think is, I mean, there's a very important message here. We readied that tech stack, and we now can bring it; we can now proliferate it into the entire product portfolio. It's not only about the CLA, or it is not only about the GLA. No, it also goes, I mean, into the S-Class, I mean, into the GLE, into the GLS, to come. So entire product portfolio will benefit, I mean, from that leading tech stack moving forward. So that's message number one. Message number two, you can also see here on the chart that looking at the vehicle architectures, the peak also on the architecture side in terms of ICE and EVs is behind us in terms of the investment peak.

And why do you think she is among the very important message here, we readied that's tech stack.

And.

We now can bring it to we can now proliferated into the entire product portfolio is not only about the CLA or it is not only about the G&A no. It also goes into the S class I mean into.

The <unk> into the <unk> less to come so entire product portfolio will benefit from that.

Leading tech stack.

Moving forward. So that's the message number one message number two you can also see here on the chart that.

Looking at the vehicle architectures.

The peak also on the architectural side in terms of.

The ice and.

And and and Evs.

Is behind us in terms of the investment peak.

Harald Wilhelm: So that gives us a lot of comfort, I mean, that we can command that investment coming down. At the same time, retaining a focus and the top-end emphasis in terms of investment and the core, which you see on the bottom of the chart here, clearly, which illustrates, I mean, where we're investing in top end and core, obviously, where the higher level margin sits. And then fixed cost. Well, 2019 to 2024, you know, 19% accomplished already. We didn't rest there. We set ourselves, I mean, another 10% between 2024 and 2027. Good news, I would say. 2025, we achieved already 7%. Well, we could say, well, that's not that much to go anymore.

So that gives us a lot of comfort that we can command that investment coming coming down at the same time, retaining a focus and a D. A.

At the top end.

Emphasis in terms of investment and the core which you see on the button of the chart, you clearly, which illustrates I mean, what are we investing in top end and core obviously, where the higher level margin sits.

And then fixed costs well 20.

2019 to 2024, you know 19% accomplished already.

We didn't dress there, we set ourselves and another 10% between 2024 and 2027.

Good news I would say 2025, we achieved already 7%.

Well, you could say well that's not that that's not that much to go anymore, but obviously are the last mile is always getting men the more difficult, but we have a clear plan I mean, how to do that very very strict use of attrition, so not replacing people, leaving as a function of attrition than the <unk>.

Harald Wilhelm: But obviously, the last mile is always getting, I mean, the more difficult. But we have a clear plan, I mean, how to do that. A very, very strict use of attrition. So not replacing people, I mean, leaving as a function of, attrition. Then the, NLPP, personnel cost reduction program, we talked earlier, I mean, today, will kick in, I mean, with the benefits, I mean, in 2026 and then, 2027. We address also structural issues, when you think about the management, positions in terms of spend and layers and dual roles. We have a pretty massive, I mean, outsourcing, ongoing to best cost countries or even hand over the activities to external service providers. Another example is a divestment of the own retail, I mean, in, in Germany.

L. P P personal cost reduction program that we talked earlier today.

Will kick in that men, who is the benefits mainly in 'twenty six and then 2027, we address also structural issues. When you think about the management positions in terms of span and layers and dual roads.

We have a pretty massive outsourcing are ongoing to best cost countries or even hand over the activities to add external service providers. Another example is the divestment of the own retail in Germany, We've talked about the integration and also the financial services customer front and with the let's say it's in customer.

Harald Wilhelm: We talked about the integration of the financial services customer front end with the sales and customer organization unit. Obviously, each and every area is working hard on standardization, digitalization, and extensive use of AI across the entire business. What does it mean in terms of margin perspective and trajectory? Clearly, a year ago, I think when we're standing here, we said we target in 2027 following a double-digit margin. Did that ambition change? No. Why? It's when we said that last year, we were pretty explicit that this is pre-tariffs, and we all know, I mean, where we ended up, I mean, on the tariff side of things. Since then, I think a significant evolution in terms of the furthering of the competitive nature, I mean, in the market.

Organization.

Unit and obviously each and every area is working hard on standardization digitalization and extensive use of AI across the entire business.

Okay.

So what does it mean.

In terms of a margin perspective and trajectory.

Clearly a year ago I think when we're standing here, we said we target in 2027, following a double digit margin.

Did that ambition change.

No.

Why.

When we said that last year, we were pretty explicit that this is pre tariffs and we all know main where we ended up on the tariff side of things.

Since then I think a significant evolution in terms of the the further the furthering of the competitive nature of men in the market and so we are here.

Harald Wilhelm: So we are here confirming an 8 to 10% margin target in the midterm, including 150 to 200 basis points dilution from tariffs and the adverse FX effects we were talking about, I mean, earlier, I mean, today. So how can we come from a 3 to 5 in 2026, where I think in the, in the break, I already got quite a lot of questions, what it means and the like. So let me take you, as I took you from the 2024 to the 2025, from the 2025 to the 2026. Let me take you from that 2026 guidance, 3 to 5, to how is it possible, do you mean, to get to 8 to 10 in the midterm? Well, let's start first, I mean, with some headwinds again.

Confirming an 8% to 10% margin target in the midterm, including a 150 to 200 basis points.

Dilution from tariffs and the Edwards FX effects, we were talking about earlier today.

So how how can we come from.

Our suite, two five and 2026, well I think in the break already got quite a lot of questions. What it means and the like so let me take you as I took you from the 24 to the 20 525 to the 26, let me take you from that 26 guidance suite to five two how is it.

Do you mean to get to two or eight to 10 and in the midterm.

Let's start force first man was some some headwinds again, yeah. The more we grow we also grow the ambition and the U S. It means the tariff impact will go up a bit further under 50 basis points 26 are going more towards the 200 over all the time the effects from the assumption.

Harald Wilhelm: Yeah, the more, I mean, we grow, we also grow the ambition in the US. It means, the tariff impact will go up a bit further, under 50 basis points, 26, so going more towards the 200 over, over time. The FX, from the assumptions that I shared with you a bit earlier, we don't see it going away. So all in all, FX and tariffs basically constitute another headwind of around 1%. The entire volume, structure, pricing, EV ramp up is a super important lever, obviously. So the going back to the 2 million, units. But you might be surprised that maybe in this entire increase, it is probably something around 1.5%. So where is the rest coming from? It is the efficiencies at work.

<unk> said I shared with you a bit earlier.

We don't see it going away so all in all FX and tariffs basically constitute another headwind of around 1%.

The entire volume structure pricing EV ramp up is a super important lever obviously.

So the going back to the 2 million units.

But you might be surprised that may be in this entire equation. It is probably at something around 1.5%.

So, whereas the rest coming from.

It is the efficiencies at work.

Harald Wilhelm: This is the efficiencies of roughly 4%, which will not only bring us up, I mean, to that level, but also will make the company even more resilient and waterproof. So what does it mean? Clearly, we believe in the products and the plan to attack the markets, I mean, to go to the 2 million units. But in terms of, I mean, what's underpinning that, that margin expansion, it is clearly the efficiencies at work, proven so far. And I think on the back of that, we’re confident we can deliver on that moving forward. If you look on the margin side in terms of this profile, clearly ramping up, what does it mean on the cash generation? Well, you could see the chart on the investment side. The investment, I mean, coming down, depreciation going up.

The efficiencies of roughly 4%.

Rich will not only bring us up to that level.

But also we will make the company, even more resilient and waterproof.

So what does it mean clearly we believe in the products and the plan to attack the markets I mean to go to the 2 million units.

Yeah.

But in terms of what's underpinning that that margin expansion. It is clearly the efficiencies at work proven so far.

And I think on the back of that.

We were confident we can deliver on that moving forward.

If you look on the margin side in terms of this profile.

Clearly ramping up what does it mean on the cash generation well you could see the chart on the investment side, the investment domain coming down depreciation going going up it means cash conversion turns favorable moving forward and not only at cars, but over time also.

Harald Wilhelm: It means cash conversion turns favorable moving forward, and not only at cars, but over time, also at, on the vans side. So let's have a look, what that means. Well, maybe another short recap before doing so. In terms of cash generation track record, if you go back, to 2019 till 2025, that's more than EUR 50 billion of cash generated, free cash flow generated. We returned more than EUR 30 billion to you, via divvy and share buyback. On top, you got the Daimler Truck shares from the spin-off. That basically yields a total shareholder return of more than 130%. And if you look at 2025, I mean, that is a TSR of around, I mean, 20%.

On the van side, so let's have a look what that means.

Well, maybe another short recap before doing so.

In terms of cash generation track record. If you will go back to 2019 until 2025, that's more than $50 billion of cash generated free cash flow generated we returned more than $30 billion.

Two you wire Debbie and share buyback on top you got the Daimler truck shares from the from the spin off.

That basically yields.

Our total shareholder return of more than 130.

Percent and if you look at 2020 five main that is a T. A saar of around 20%.

Harald Wilhelm: I use this example. I stressed last year, so if you invested in 2019 EUR 100 in 2 Daimler shares at the point in time, and if you count everything, the dividend, the share buyback, the Daimler Truck shares, and when all of the cash streams coming to you, that is the equivalent of EUR 230 today. So, I think it's a reasonable IR. And if you think at the same time, that the net industrial liquidity stepped up from EUR 11 billion to more than EUR 30 billion, EUR 32 billion, I think you might read from the chart that cash generation matters to us. Now, what to do, I mean, with cash generation and cash returns? Clearly, we have the capital allocation framework in place.

I use. This example.

I stressed last year. So if you invested in 2019.

100 euro into Daimler shares at the point in time, and if you count everything the D V. The share buyback the Daimler truck shares and when all of the cash streams coming to you that is the equivalent of a 230 euro today.

So I think it's a reasonable I R.

And if you think at the same time.

That the net industrial liquidity stepped up from 11 to more than $30 billion 32 billion.

Think you might reach from the chart that cash generation matters to us.

Now what to do.

With our cash generation and cash returns.

Clearly, we have the capital allocation framework in place.

Harald Wilhelm: We are committed to that framework. We are committed to the shareholder returns. But this capital allocation framework and the application of it, I'm going to take you through that in a minute, is not the demonstration of the commitment to that framework only. It is also, I mean, a signal in terms of our confidence into the business, into the operational, into the financial profile we're talking about in this chapter, before. So very clearly, the cash generated mean, the free cash flow generated and the cash proceeds generated, mean, will serve the divvy, will serve, I mean, the share buybacks and, in the cash generation, obviously, also M&A starts to matter. Before I talk about that, I mean, let me share a word on the divvy, as we didn't do that, I mean, before.

We are committed to that framework, we're committed to the shareholder returns.

Ah, but this capital allocation framework and the application of it are going to take us through that in a minute.

It's not the demonstration of our commitment to that framework only it has also remained a signal in terms of our confidence into the business into the operational into the financial profile. We're talking about in this chapter of before.

So very clearly the cash generated min the free cash flow generated and the cash proceeds generated midnight with surf the Debbie will serve I mean, the share buybacks and in the cash generation. Obviously also M&A starts to matter.

Before I talk about that man, let me share a word on the DB is we didn't do that before you could see I think from the press release that we propose to the AGM a dividend of three euro 50.

Harald Wilhelm: You could see, I think, from the press release, that we propose to the AGM a dividend of EUR 3.50 for 2025. How do we think about that? How do we come up, I mean, with this proposal? Clearly, on the one side, the divvy should express the business profile and the business evolution, which we analyzed in the section earlier today. That's why the divvy for 2025 needs to sit below the one of 2024, which was EUR 4.30. But at the same time, we do understand, and we do know that sustainability of dividend also matters to you as a shareholder, a lot.

For 'twenty or 'twenty five.

How do we think about that how do we come up I mean was it a disproportional clearly on the one side the division should expresses the business profile and the business evolution, which we analyzed in section earlier today, that's why the DB for 2025 needs to sit below the one offered 2024, which was for euro.

30 <unk>.

But at the same time.

We do understand and we do know that the sustainability of dividend also matters to you as a shareholder a lot.

Harald Wilhelm: There is a third dimension, as we talk about 2026 as a ramp-up year, as we lay out a very clear plan, how we move forward in terms of top line expansion, come back to 2 million units, come back to margin expansion, come back to higher cash flow generation moving forward. That is also, I mean, a message in terms of the dividend of EUR 3.50. Please read this footnote in conjunction with the dividend proposal of EUR 3.50. Now, a bit more in detail for 2026 in terms of cash generation and cash return. What can you expect? Well, if you read my lips a bit careful from the guidance section, you can see an industrial free cash flow for 2026 in excess of EUR 4 billion.

And there was a third dimension as we're talk about 26 as a ramp up year as we lay out a very clear plan, how we move forward in terms of top line expansion.

Come back two 2 million units come back to margin expansion come back to a higher cash flow generation moving forward that is also a message in terms of the Deviously Euro 50, please read.

This footnote.

In conjunction with a D V proposal, obviously euro 50.

Now.

A bit more in detail for 2026 in terms of cash generation and cash return what can you expect.

Well, if you read my lips bit careful from the guidance section you can see.

Industrial free cash flow for 2026 in excess of 4 billion.

Very clearly we have the potentials on the M&A side.

Harald Wilhelm: Very clearly, we have the potentials on the M&A side. I talked about Athlon. We have our own retail in Germany, where we are ramping up the wave of the divestments in 2026. And then, we clearly have another little asset, which is called Daimler Truck stake. And happy to report here at this stage, so that a share of that has been reclassified in the financial statements, so to come out, and latest when you see them early March, in assets held for sale, that means nothing else, our firm determination to be in market in 2026. So if you size these opportunities, I would say give it a 2. So cash generation altogether, I mean, could be around a 6. What to do with it?

I talked about Atlanta.

We have the own retail and in Germany.

Where we are ramping up the way for the divestments in 2026.

And then.

We clearly have another little asset, which is called dominant truck stake.

And are happy to report here at this stage so that a share of that has been reclassified in the financial statements. So to come out and latest when you see them early March.

In assets held for sale that means nothing else our firm determination.

To be in market in.

In 2026, so as you size these opportunities I would say give it a tube.

So cash generation or together.

I mean could be around a six.

What to do with it.

Harald Wilhelm: Your dividend of EUR 3.50 translates into cash out of EUR 3.4 billion. I explained to you earlier that the share buyback launched in 2025. We did already EUR 300 million in 2025, so that leaves us with EUR 1.7 billion to go in 2026. On the back of the cash generation strengths, I think that fuels the perspective to launch a successor to the 2025 SPB program also in 2026. Just for the sake of the argument, assume same order of magnitude, then obviously it will come after the first one, after the EUR 1.7 billion, so give that. On the chart, you see EUR 1 to 2 billion.

Yeah, Divi, obviously euro 50.

Translates into a cash out of first 3.4 billion.

I explained to you earlier that the share buyback launched in 2025, we did already 300 in 2025, so that leaves us with 1.7 to go in 2026 and.

And on the back of the cash generation strengths.

I think that fuels the perspective to launch a successor to the 20th twenty-five SBB program also in 2026.

Just for the sake of the argument assumes same order of magnitude then obviously it will come after the first one after the $1 seven so give that on the chart, you'll see a one to two.

Harald Wilhelm: That means, basically around EUR 6 billion of cash generated from the industrial business and M&A, and approximately the potential of EUR 6 billion return to shareholders in 2026. At current share price and market cap, I think that would constitute a double-digit return, at the same time, retaining a very, very healthy balance sheet of EUR 32 billion. So I think it's time to wrap it up. I think you got the details of the attack plan on which we're moving full speed ahead. We are confident about that plan. Why are we confident? Is a leading tech stack, which now gets proliferated into the entire product portfolio. You have these incredible vehicles, I mean, coming to market with an unprecedented launch campaign, 2026, 2027, creating momentum.

That means basically around <unk> 6 billion of cash generated from the industrial business and M&A.

And approximately the potential of 6 billion return to shareholders.

In 2026 at current share price and market cap.

I think that would constitute.

A double digit return at the same time, retaining a very very healthy balance sheet of 32 billion.

So I think it's a time to to wrap it up.

I think you got the details.

Of the attack plan.

On which we're moving full speed.

Go ahead.

We are confident about that plan.

Why are we confident.

Is the leading tech stack, which now gets proliferated into the entire product portfolio.

You have these incredible we killed some in coming to market with an unprecedented launch campaign 'twenty six 'twenty seven creating momentum.

Harald Wilhelm: You heard loud and clear how we pull all levers to leverage the brand and the products in the market, to conquer the markets with a target, a clear target, back to 2 million. You heard a comprehensive game plan, how to attack China in terms of what the customers expect from us, in terms of the tech stack, in terms of the products, in terms of the cost base, and also how we leverage the local capabilities, intelligence, in terms of the R&D. You heard as well a fully engaged and motivated team from the shop floor to the boardroom with a determination to win. You heard about discipline when it comes to cost and investment, supporting higher level margin and cash generation, which should come back as cash returns to you.

You heard loud and clear how we pull all leavers to leverage the brand and the products in the market to conquer the markets with a target a clear target back two 2 million.

You had a comp you heard a comprehensive game plan how to attack China in terms of what our customers expect from US in terms of the tech stack in terms of the products in terms of the cost base and also how we leverage the local capabilities intelligence in terms of the R and the.

Deep.

You heard as well.

Fully engaged and motivated team.

From the shop floor to the boardroom.

With a determination to win.

You heard about our disciplined when it comes to costs and investment supporting higher level margin and cash generation, which should come back as cash returns to you.

That is the reason why we're confident.

Harald Wilhelm: That is the reason why we are confident, and we welcome you to join us in that confidence. Thank you very much.

And we welcome you to join us in that country dense. Thank you very much.

[noise] yeah. Thank you very much everybody. This was the presentation part of today. Thank you for joining us here in person and as a new thing and.

Christina Schenck: Yeah. Thank you very much, everybody. This was the presentation part of the day. Thank you for joining us here in person, in Sindelfingen, and all of you on the screen for joining us digitally. Thank you, Ola, Harald, Matthias, all of you, for your presentations. We will see all four board members back on stage for a Q&A session in roughly 12 minutes, at 10:45 sharp. This is still a public Q&A, so it will be broadcasted. However, only registered analysts, investors, and journalists will be able to ask questions. So see you back in 13 minutes.

Willem Spelten: Yeah. Thank you very much, everybody. This was the presentation part of the day. Thank you for joining us here in person, in Sindelfingen, and all of you on the screen for joining us digitally. Thank you, Ola, Harald, Matthias, all of you, for your presentations. We will see all four board members back on stage for a Q&A session in roughly 12 minutes, at 10:45 sharp. This is still a public Q&A, so it will be broadcasted. However, only registered analysts, investors, and journalists will be able to ask questions. So see you back in 13 minutes.

All of your and the screen for joining us digitally.

Thank you Willa.

Yes Ali for your presentations, we will see all four board members back on stage for Q&A session in a roughly 12 minutes at 10 45 shop visits are still a public Q&A. So it will be broadcast that however, only ratchets that analysts investors and joining us will be able to ask questions. So see you back in.

30 minutes.

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Operator: Welcome to the Q&A session. At a customer's request, this conference will be recorded. The replay of the conference will also be available as an on-demand video webcast in the investor relations section of the Mercedes-Benz website. If you have difficulties during the conference, please press zero and the pound key on your telephone keypad for operator assistance. I would like to remind you that this conference is governed by the safe harbor wording that you will find in our published results documents. Please note that our presentations contain forward-looking statements that reflect management's current views with respect to future events. Such statements are subject to many risks and uncertainties. If the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. Forward-looking statements speak only to the date on which they are made.

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Welcome to the Q&A session.

At our customer's request this conference will be recorded.

The replay of the conference will also be available as an on demand video webcast in the Investor Relations section of <unk> website.

If you have difficulties during the conference. Please press zero and pound key on your telephone keypad for operator assistance I.

I would like to remind you that this conference is governed by the Safe Harbor wording that you will find in our published results documents.

Please note that our presentations contain forward looking statements.

Reflect managements current views with respect to future events.

Such statements are subject to many risks and uncertainties.

If the assumptions underlying any of these statements prove incorrect and actual results may be materially different from those expressed or implied by such statements.

Looking statements speak only to the date on which damage.

Operator: May I now hand over to Christina Schenk, Head of Investor Relations, Digital and Communications at Mercedes-Benz, and Wilhelm Spelten, Head of Corporate Communications at Mercedes-Benz. Thank you very much.

I now hand over to Christina Cheng head of Investor Relations Digital and communications at Mercedes Benz and develop expansion head of corporate communications Aetna Cvs bench.

Thank you very much.

Well I come back here in the room, and we'll come back online for more interactive part now the Q&A session I have with me how got all our Oliver and materials for our Q&A and we have roughly one hour time, which we will dedicate the first 30 minutes till the analyst and the Investor Quest.

Christina Schenck: Welcome back here in the room, and welcome back online for our more interactive part now, the Q&A session. I have with me Harald, Ola, Oliver, and Matthias for our Q&A, and we have roughly one hour time, which we will dedicate the first 30 minutes to the analyst and the investor questions and the last 30 minutes to journalists.

And the last 30 minutes to journalists.

Willem Spelten: Once we've wrapped up the questions from the analysts, we will change to the media Q&A. We start with analysts, go then to the media. The media part will be held in German. We're starting in English, second part will be in German. If you're bilingual, we kindly ask you to pose your question in whatever language you prefer, English or German, and we will answer in the same language you chose. Simultaneous interpretation is available for all participants. German is on channel one, English is on channel two, and Chinese is on channel three.

And once we've wrapped up the questions from the analysts with a change to the media Q&A. So we start with analysts go then to the media the media part will be headed in German we're starting an English second thought would've been Jim if you're bilingual recount you ask you to pose your question and whatever Vanguards, you prefer English or German and wait for the answer and the same.

And then you just you chose simultaneous interpretation is available for all participants German is on channel one English is on channel two and Chinese is on Shannon.

Christina Schenck: So let's now begin with the analyst and the investor questions. As usual, please bear with me for some instructions. I see your hands already. For the participants online, the operator will explain the procedure for registering your questions on the phone line again shortly. For participants here in the room, as usual, please raise your hand, and we will call you up. To be audible to everyone, please press the button on the microphone in front of you. Please also tell us your name and the name of your organization. When your question is answered, please make sure to switch off your microphones again. Our conference call will end around 11:45. Please take your time with your questions and ask them slowly and clearly so that the translators can do their job well. Thank you, and now I hand back to the operator.

So, let's now begin with the analyst and the Investor questions as usual please bear with me for some instructions I see your hands already.

For the participants online the operator will explain the procedure for registering your questions on the phone line again shortly.

<unk> in the room as usual please raise your hand, and we will call you up and to be audible to everyone. Please press the button on the microphone in front of you. Please also tell US your name and the name of your organization. When Youre question is answered please make sure to switch off your microphone again.

Our conference call will end around 11 45.

Please take your time with your questions and ask them slowly and clearly so that the translators can do their job well.

And now I hand back to the operator.

If you wanted to ask a question. Please press nine and the Star key.

Operator: If you want to ask a question, please press nine and the star key on your telephone keypad, and you will hear the following message: "Thank you for your participation. Your request to speak is registered." When it's your turn to raise a question, you will hear the message: "You are now in talk mode." To withdraw a question, please dial three star, after which you'll hear the message: "Your request to speak has been removed." You will be called upon by us. One moment, please, we are now registering your questions. I will now hand back to Christina Schenk.

Catherine Keypad and you will hear the following.

Thank you for your participation your request to speak is registered when it's your turn.

You will hear the message.

Now in talk mode to.

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It will be called upon by Ash, but now in place we are now registering your questions.

I will now hand back to Christopher.

So let's start with the questions in the room I go for Horst Schneider after over to you.

Christina Schenck: So let's start with the questions in the room. I go for Horst Schneider. Horst, over to you.

Yes.

Okay.

Horst Schneider: ... Push the button? Yeah. Now you can hear me. Thank you. Yeah, thanks for taking my questions. When I, I mean, first of all, it's great detail that you provided in these midterm targets and how they can be achieved. I got it that you target down 7% revenue growth, and you target, we said also positive price mix. Positive price mix, especially mix, does not mean that also this positive mix arrives at the bottom line. So maybe can you outline the details, when you expect this price mix line to improve, which is still on price minus 0.5% in 2026? So you assume that to continue this level of negative price or this pricing on earnings, then also clips positive or neutral. Some details on that would be appreciated.

Pushed the button.

Now you can hear me. Thank you, yes, thanks for taking my questions.

When I.

I mean first of all it's great detail that you provided in this midterm targets in house that can be achieved.

I got it set target down 7% revenue growth and do you target. We said also a positive price mix positive price mix, especially mix does not mean that also this positive mix arrives at the bottom line. So it may be can you outline the detached when you expect this.

Price mix line to improve which is still on price minus half a percent in 2026. So you assume that to continue this level of negative price. This pricing on the earnings side also.

Flips positive or neutral some details on that would be appreciated.

Horst Schneider: The second question that I have is on China, because I looked recently at the sales figures of the CLA, which is very attractively priced in China. I think it's a great car, but I was disappointed how low the unit sales are. You target also for the upcoming EVs and unit sales growth in China. My impression on the back of that, it's not the product, it's basically that the Chinese customer has got prejudices against foreign EVs. So my impression is that the price needs to be lower than the Chinese car before the Chinese buy them. So therefore, what is your confidence that you take, that you can really succeed with EVs in China? Thank you.

The second question that I have is on China.

Because I looked recently at the sales figures of the CLA.

<unk>, which is very attractively priced in China, I think its great car, but I was disappointed how long the units heads.

It also for the upcoming <unk> unit sales growth in China My impression on the back of that it's not a product. It's basically that the Chinese customer has got prejudices against foreign navies. So my impression is that the price needs to be lower than the Chinese cod before the Chinese buyers and so therefore, what is your confidence that you take that you can really.

Succeed with Cvs in China. Thank you.

Yeah, maybe I'll kick it off with the first question our whole star in terms of on the <unk> the margin profile.

Harald Wilhelm: Yeah, maybe I kick it off with the first question, Horst, in terms of the margin profile. I mean, I would suggest, I mean, let's depart from the outlook, the guidance to 2026, so the 3 to 5. And for the sake of the argument, if you want to take them in the midpoints, there's a departure point from there. When I said before, it's minus 1 on FX and hedging, on tariffs, it's a 1.5 plus on volume, price, mix, BEV, and it is a 4 on the efficiency. So basically, obviously, a 1.5 going from around 1.8 million to 2-ish with a stronger top end, sounds rather like a lower number.

Would suggest mean, let's depart from the outlook the guidance through 2026 of the fleet to five.

For the sake of the argument even want to take them in the mid points. There's a departure point from from there right.

And I said before it's a minus one on FX and and hedging on tariffs.

It's a one and a half plus a on a volume.

Price mix.

Makes bev and it is a four on the efficiency. So basically obviously are.

One and a half.

Going from around $1 8 million to two ish was a stronger top end sounds rather like a lower number.

Harald Wilhelm: But clearly, I mean, you can see in that plan, therefore, I mean, we, we are not overambitious when it comes to the margin from the growth, but more ambitious when it comes to the margin from the cost. I think that's number one, what you can read in there. Number two, at the beginning of the ramp-up of the EVs, obviously, you still have, I mean, an EV margin, which is lower than ICE, and therefore, I mean, an EV dilution sitting in there. So that is, I mean, a net number of all of the levers, volume favorable, pricing, mix, and EV. How should you think about the profiling maybe of that, without giving each and every detail now in terms of fiscally or even quarter in 2027?

But clearly I mean, you can see in that plan. Therefore, I mean, we are not overly ambitious when it comes to the margin.

From the gross but more ambitious when it comes to the margin from the cost.

I was saying that's number one and what you can read and now our number two.

At the beginning of the ramp up of the Evs, Obviously, you still have I mean in EEV margin, which is lower than ice and therefore I mean.

E V dilution sitting in there so that is a net number of all of the levers volume favorable.

Pricing mix.

<unk> and <unk>, how should you think about the profiling, maybe all of that was out giving each and every detail now in terms of our fiscal year or even quarter in 2027, but clearly when you heard it 2026 is a ramp up year in <unk>. So I think that suggest that in 2027, we should see some meaningful <unk>.

Harald Wilhelm: But clearly, when you heard it, 2026 is a ramp-up year in H2. So I think that suggests that in 2027, we should see some meaningful contribution from the top line, so from that volume and mix, in 2027 already. I hope that helps.

<unk> from the top line, so from that volume and mix in 2027 already.

I hope that helps.

Oliver Thöne: Then coming back to CLA. First of all, I agree to your assessment. It's a, it's a great product, and that's why we also... Our customers' feedback, these activation rates, user traits on the technology given. If you look closely at that segment, you see the CLA is a touch more niche in China than it is here, because cars and everything have gotten so much bigger in China, so we deliberately position it a touch more niche. Secondly, you have seen the vast pricing pressure, especially in Q4, on BEVs. In light of the incentives and the fade out of incentives, there was extreme measures in the market. We did not participate in those measures because we believe that the substance of the product will require a certain amount of time for customers to be fully understood and fully appreciated.

Then coming back to CLA first of all I agree to your assessment, it's a it's a great product.

That's why we also our customers' feedback this activation rates user trades on the technologies given.

If you look closely at that segment you see the C. L. A is a touch more niche in China than it is here because cars and everything has gotten so much bigger in China. So we deliberately position at a touch more niche secondly.

You have seen the vast pricing pressure, especially in Q4 on bv's in light of the incentives and the fade out of incentives. There was extreme measures in the market. We did not participate in those measures because we believe that the substance of the product will require a certain amount of time for them by.

Customers to be fully understood and fully appreciate it if we know deliberately very fast go into this more aggressive positioning.

Oliver Thöne: If we now deliberately, very fast, go into this, more aggressive positioning, I believe the attractive positioning is the right one. The overly aggressive entails further risks. You've also seen, apart from the list price, if you look at the financial offerings, which many of the peer group offer, you see quite a deterioration in the net pricing. Year-over-year, some of these subsidies were dialed back, and I believe this will, in the foreseeable future, also help that there's going to be a slight rebound in pricing, and then the relative attractiveness of the CLA will increase.

I believe the attractive positioning is the right one the overly aggressive and Ted's further risks and you have also seen.

Apart from the list price if you look at the financial offerings, which many of the peer group offer you see quite a deterioration in the net pricing year over some of the subsidies were dialed back and I believe this will in the foreseeable future also had that theres going to be a slight rebound in pricing.

And then the relative attractiveness of the CLA will increase and then the plan for China has stabilized profitability or the ink or increased profitability again, yes.

Horst Schneider: And then the plan for China is stabilize profitability or increase profitability again?

Oliver Thöne: Yes, and, you will see with the next coming launches, especially the electric GLC, it is coming at a, as a significantly larger vehicle, a bit more sweet spot, a bit less of this niche. Like, these CLA sedans is something where the whole market has shifted a bit.

You will see what the next coming launches.

Especially the electric GLC it is coming at a significantly larger vehicles, a bit more sweet spot a bit less of this niche like these CLA sedans is something where the whole market has shifted a bit. So we will always have it but for us the CLA is the anchor.

Horst Schneider: Mm-hmm.

Oliver Thöne: So, we will always have it, but, for us, the CLA is the anchor car for this tech stack to show its capability. That's why we opted for a fixed pricing approach. And also together with Momenta, we can offer, roughly 10 cities right now, and we constantly roll it out, so the next cars coming will enjoy the fully, deployed tech stack.

For this tech stack to show its capability, that's why we opted for fixed pricing approach.

And also together with momentum we can offer.

Roughly 10 cities right now and we constantly rolled it out so the next cars coming with enjoyed the fully deployed textbook.

Horst Schneider: Okay.

Okay on that journey, just to add to that that I agree with everything all I said.

Harald Wilhelm: On that journey, just to add to that, I agree with everything Oli said. Look at the profile of our portfolio and also the average transaction price of our portfolio. You mentioned it, where we sit above-

Look at the profile of our portfolio and also the average transaction price of our portfolio you mentioned, it where we sit above.

Ola Källenius: ... the relevant peer group. The most important action for us on NEV starts with the electric GLC. And needless to say, then E-Class next year and so on, are going to be very important.

The relevant peer group.

The most important action for us on an EV starts with the electric GLC.

Needless to say then E class next year and so on are going to be very important.

Oliver Thöne: Mm-hmm. Okay, thank you.

Okay. Thank you.

Christina Schenck: Thanks very much. Raise of hands. Tim, over here.

Thanks, very much a raise of hands Tim over here.

Yes. Thank you Oliver if I can maybe follow up on that in China. Once the mid to long term here should we expect you guys show the same market share with Beth as you used to have on the ice side or where we have to get used to simply a smaller market with perhaps to ross's question and stabilize profitability.

Tim Rokossa: Yeah, thank you. Oliver, if I can maybe follow up on that in China, what's the mid- to long-term here? Should we expect you guys to have the same market share with BEV as you used to have on the ICE side? Or will we have to get used to simply a smaller market with perhaps, to Horst's question, a stabilized profitability?

Oliver Thöne: I believe some segments in the Chinese market have shifted, and going to remain shifted. If you jump into the pre-COVID era, 2019, then the whole entry segment looked completely different to what it looks today. If you just scale back in time and look, when did we deploy a long wheelbase A-Class in 2019, what kind of vehicles are now in those segments? Secondly, in China, half of the market, half of the car market is now NEV. If you look at and dissect the market by price segments, especially below CNY 300,000, below CNY 200,000, that share even increases.

I believe some segments in the Chinese market have shifted.

Im going to remain shifted.

If you jump into the pre Covid era on the 2019, then the whole entry segment look completely different to what it looks today. If you just scaled back in time and look when do we deploy a long wheelbase a class in 2019, what kind of what he calls are now in though in those segments.

Secondly.

In China, the half the market half of the car market is now nev. If you look at it and dissect the market by price segments, especially below 300000, RMB below 200000, RMB that share even increases so I would say in that segment, we will offer.

Oliver Thöne: So, I would say in that segment, we will offer a few cars, but no longer this full lineup as we have seen 2019, or if you scale back further. So, I do foresee, like deployed, and I explained the growth perspective, but it is to a lesser extent on the entry vehicles. But as of today, we cannot offer in mid-size SUVs, an electric alternative, right? So we are happily enjoying great sales for our combustion GLC, it leads the pack. However, for the 50% seeking NEVs, it will be by mid of this year that we come with the long-wheelbase GLC.

A few cars, but no longer this full lineup as we have seen 2019 or if you scale back products. So I do foresee like deployed and I explained the gross perspective, but it is two and lesser extent on the entry vehicles, but as of today, we cannot offer in midsize.

<unk> electric alternative right. So if we are we havent happily enjoying great sales for our combustion GLC. It leads the pack however for the 50% seeking ltvs it would be by mid of this year that we come with the long wheelbase GLC.

Tim Rokossa: Okay.

And don't forget that Ali mentioned in his presentation, a segment, where we have enjoyed a very nice business for many years has been the CPU imports of the daily one of our.

Ola Källenius: And don't forget that Oli mentioned in his presentation, a segment where we have enjoyed a very nice business for many years, has been the CBU imports of the GLE, one of our core vehicles in our portfolio worldwide. That turns local this year, with a specific China version of that vehicle. So those segments become even more important. And in light of the tariff situation that, Harald described, well, there was a slight shift in tariffs between the United States and China in 2025, which is not, supporting export business in the same way that it did before. So it's crucially important to now localize such a core vehicle in our portfolio, and we think that will build momentum in that segment.

Core vehicles in our portfolio worldwide.

That turns local this year.

With a specific China version of that vehicle, so those segments become even more important and in light of the tariff situation that.

Describe.

Well there was a slight shift in tariffs between the United States and China in 2025, which is not.

Supporting export business in the same way that it did before so it's crucially important to now localized such a core vehicle in our portfolio and we think that will build momentum in that segment.

Tim Rokossa: And 2, 2 more follow-up questions, please, to what was said. Maybe with you, Ola or Harald, because you also very much stand for this. I don't think I've heard the word growth as often from you guys as today, over the last 4 years, ever since Monaco. Certainly scared a few people, judging from my inbox on the investor side. Is value over volume over with this announcement? Do you now say 2 million units is what we need to achieve, we need the fixed cost coverage, or do you still very much prioritize margins? And if we then think about margins, Harald, to the 4 percentage points, sounds very ambitious with all the front loading you do on ADAS, as we discussed about yesterday, Ola, the cost going up on DRAM, all the other inflation.

Two more follow up questions. Please to what was said maybe with you all are all heroes. Because you also very much then for US I don't think I've heard the word growth S. Often from you guys is today over the last four years ever since Monaco.

Scared a few people judging from my inbox on the Investor side.

Is value over volume over with this announcement do you now say 2 million units is what we need to achieve we need the fixed cost coverage or do you still very much prototypes margins.

And if we then think about margins Harold's two to four percentage points sounds very ambitious with all the Frontloading you do one aid us as we discuss about yesterday all are the costs going up on DRAM all the other inflation.

Tim Rokossa: What makes you confident that we don't stand here next year and you're telling me, "Yeah, we achieved 4%, but actually the costs went up, so the net number is more like 2% or 3%." How should we think about that?

Makes me confident that we don't stand here next year, and you're telling me, yes, we achieved 4%, but actually the costs went up so the net number is more like 2% or three person how shall we think about that so on the first one if we go all the way back to that original presentation pillar two is called profitable growth, it's not core profit or growth its profitable growth.

Ola Källenius: So on the first one, if we go all the way back to that original presentation, pillar two is called profitable growth. It's not called profit or growth, it's profitable growth. And listening carefully to what Matthias said in his presentation, it is still profitable growth, but it's not profit without growth. And we do think that it matters, that if you invest into such a comprehensive innovation, technology, and product portfolio, you must have the ambition that you have success in the market with those products. When you go into a few segments where you literally have a wide spot at the moment, electric GLC or electric C-Class, and we know that that is the bulk of the premium electric volume in Europe, and you have no offering today, you must have an ambition to grow.

And listening carefully to what Matteo said in his presentation. It is still profitable growth, but it's not profit without growth.

And we do think that it matters that if you invest into such a comprehensive innovation technology and product portfolio you must have the ambition.

You have success in the market with those products. When you go into a few segments, where you literally have a white spot at the moment electric GLC or electric C class.

And we know that that is the bulk of the premium electric volume in Europe, and you have no offering today, you must have an ambition to grow so.

Ola Källenius: So profitable growth, and I believe that is the word we used, yeah. Profitable growth remains the mantra.

Profitable growth and I believe that is the word we used yeah.

Profitable growth remains the mantra.

And maybe business switching gears as you can see it was a buck or the support of the efficiency measures now and also moving forward.

Harald Wilhelm: Maybe a bit of switch of gears, as you can see, with the back or the support of the efficiency measures now and also moving forward, we believe we can generate and create ourselves, I mean, more headroom, in terms of stepping up competitiveness, without forgiving value, but stepping up the competitiveness also, on the commercial side of things. The other question in terms of what makes us confident that the net number, I mean, shouldn't look different than the one I'm telling you today here. I make one caveat on the slide to please pay attention to it. It was on the raw mats and all of the bridges I think I gave, I mean, consciously separated the raw mat effect from the efficiency effect.

Leave or we can generate and create ourselves I mean more headroom.

In terms of stepping up competitiveness without forgiving value, but stepping up the competitiveness also on.

On the commercial side of things. The other question in terms of what makes us confident that the net number mean shouldnt look different than the one I'm telling you today here.

Make one caveat on the slide to please pay attention to where it was on the raw mats and all of the bridges I think I gave I mean Conor.

<unk> separated the raw mat effect from the efficiency effect.

Harald Wilhelm: Obviously, we are exposed to risk, but also to opportunities in this respect. I think, I mean, other measures, I mean, our chiefly, I mean, behind us, as we think about, I mean, regulatory stuff. I mean, you mentioned the EU7 engines. Obviously, that's, I mean, quite a lot of content coming to the vehicles, but I think, I mean, we know what it is, and, I mean, that is, I mean, included and calibrated in the entire envelope I gave earlier today. So moving on, Christian, over to you.

Obviously.

We are exposed to risk, but also to opportunities and in this respect I think I mean, the other measures may not achieve Lee mean behind us.

As we think about I mean regulatory stuff I mean, you mentioned that you will see us seven engines, obviously, that's been quite a lot of content coming to the vehicles, but I think we know what it is and.

When that is.

Included in calibrated in the entire.

Envelope I gave earlier today.

So moving on.

Christian over to you.

Yeah, Hi.

Christian Frenes: Yeah, hi. So first of all, could you detail the product mix dynamics within the top-end vehicle space in 2026, but also 2027? So, you know, the impact of AMG versus the refreshed S-Class. That's my first question. I can ask, and then I have two more, which is, second question would be the net tariff headwinds. You detailed it for 2026, but please, if you could elaborate on post-production localization measures, what is the net impact, and also how should we think about the net tariff impact as we head into 2027? And then lastly, just, something specific to your China dealer restructuring efforts, what is the impact in 2026 on those for the P&L and for, cash? Thanks.

So first of all could you detail the product mix dynamics within the top end vehicle space in 2026, but also 2027, so you know.

The impact of AMG versus the refreshed S class.

That's my first question.

I can ask and then I have two more which is second question would be the net tariff headwinds you detailed that for 'twenty or 'twenty six but please.

If you could elaborate on the post production localization measures what is the net impact and also how should we think about the net tariff impact as we head into 2027, and then lastly, just something specific to your China dealer restructuring efforts what is the impact in 2026 windows for the P&L.

For our cash.

Ola Källenius: Yeah, I'll start with the first one to break it down more detail for you on AMG. So if you look at the current portfolio, the entry point to the AMG brand are the entry vehicles on the current MFA2 architecture, so like an A 35, and then you have the full performance version with A 45. As we go into MMA and electrification, we're going all in on electric performance, which means that that entry sliver of the AMG sales runs down in this year. That is why that affects the headline number to start with. But I want to emphasize that that is the lowest level of the AMG portfolio. What happens now on AMG is a very comprehensive product offensive in the next couple of years.

Yeah, I'll start with the first one to break it down more detailed for you on AMG.

So if you look at the current portfolio the entry point to the AMG brand.

Are the entry vehicles on the current MSA to architecture.

An 835.

And then you have the full performance version with a 45.

As we go into <unk>.

Mmk.

In electrification.

We're going all in on electric performance, which means that the entry.

A sliver of the AMG sales some downs and this year that is why that affects the.

The headline number to start with but I want to emphasize that that is the lowest level of the AMG portfolio.

What happens now on AMG has a very comprehensive.

Product defensive in the next couple of years on the combustion side.

Ola Källenius: On the combustion side, led by the brand new six-cylinder, further developed six-cylinder, you can see that they came out with a statement now that it starts in the middle of this year with the GLC 53, which is one of the most important segments. The brand new V8 that has gone into this car, there's of course an AMG version of that, and that will find itself into product next year. Stay tuned for how far that can go in terms of performance. There is some very exciting developments in the pipeline there. On the electric side, we're now going to reinvent performance electric vehicles. Some of you have had the chances to get some initial sneak previews, but it will be mind-boggling performance, where we try to pair it with the emotion for the ones that still have petrol in their veins.

Led by the brand new six cylinder further developed six cylinder you could see that they came out with a statement now that it starts in the middle of this year with the GLC 53, which is one of the most important segments.

The brand New V. Eight that has gone into this car.

There is of course, an AMG version of that and that will find itself into a product next year.

And stay tuned for how far that can go in terms of performance.

There is some very exciting developments in the pipeline there.

On the electric side, we're now going to re invent.

Performance electric vehicles. Some of you have had chances to get some initial sneak previews.

But it will be mind boggling performance.

We try to pair it with the emotion for the ones that still have petrol in their veins.

Ola Källenius: And the signature flagship product in that offensive is, of course, the AMG GT that we will show in May as a world premiere, and it comes in the second half of this year. But that technology, that superior performance, and that emotion is then rolled out into the whole portfolio. So you will have MMA versions of that, you will have MBE versions of that, et cetera, et cetera. So this run out and then run up for AMG, in particular, 2026, is a run out and then to prepare for a run up. So I think we're going to then see a run out and then into 2027, very, very good momentum on AMG. That's what's going on. And on the other two questions, Christian?

And the signature flagship product and that offensive is of course, the AMG G. T that we will show in May as the world's Premier and it comes in the second half of this year.

But that technology.

The superior performance and that emotion is then rolled out into the whole portfolio.

So you will have MMA version. So that you will have M. B E versions of that et cetera et cetera.

So this <unk>.

Iran out and then run up for AMG in particular.

2026 is a run out and then to prepare for a run up so I think we're gonna Duncey a run out and then into 'twenty 'twenty seven very very good momentum on AMG, that's what's going on.

And on the other two questions Christian just on the S class you Didnt mentioned.

Christian Frenes: Just on the S-Class, you didn't mention the S-Class, but you-

Ola Källenius: Yeah, S-Class, well, S-Class, the production starts in a couple of months from now. Here it is. You saw the, the Maybach version of it yesterday. And then with the lead times, I don't know, we hit China in September-ish, United States in the summer. We will then be in Europe in roughly May-ish, type timeframe. So of course, you, you first go down, and then you start going up. Full firepower of the S-Class is 2027 and forward.

S class well, that's because the production starts in a couple of months from now here. It is you sold the Maybach version of it yesterday.

And then with the lead times, so I don't know where he hits out of China in the September ish, United States in the summer. We will then be in Europe, and roughly may ish type timeframe. So of course, you first go down and then you start going up full of firepower of the S. Class is 2027 and forward. So when we think about the mix of the top and via.

Christian Frenes: So when we think about the mix of the top-end vehicle space, is there a significant shift then with the S-Class and the AMG?

Space, there's a significant shift and with the S class and the AMG.

The 27 gross.

Ola Källenius: 27% growth, year-over-year change, 26%.

Changeover year 'twenty six.

So your second question I think it was on the tariff impact on any localization. So we'll have them in the run rate impact of the tariffs in 2026 are outlined earlier stepping up from a 110 basis points from 25 to around call. It 150 is obviously in a 25.

Harald Wilhelm: So your second question, I think, was on the tariff impact and any localization. So we'll have them in the run rate impact of the tariffs in 2026, as I outlined earlier, stepping up from 110 basis points in 2025 to, call it, 150, is obviously in 2025. In Q1, there weren't, I mean, any incremental tariffs, so I think that explains the 2026 number. Then in that number, you already have the localization of the GLE in the US, in China, sorry. But, I mean, the vast majority of the incremental tariff headwind is anyhow the US tariffs, I mean, which impact the imports into the US.

The first quarter, there weren't any incremental tariffs. So I think that explains or the 2026 number.

Then in that number you already have the localization of the of the <unk> in the U S in China sorry.

But I mean, the vast majority of the incremental tariff headwinds anyhow, the U S tariffs midnight, which impacted the imports into into the U S.

Harald Wilhelm: So as we have a target to grow in the US towards the 400, as Matthias pointed out, that has, I mean, a tariff impact going along with it. That's why in the midterm, I said, I mean, that could go up, I mean, from 150 to 200 basis points. Yes, in the longer midterm, I mean, towards the end of the decade, I think I mentioned it during the localization section, there is clearly an opportunity with next generation GLC to come. That could be a significant mitigant to that tariff, but I think that is probably a bit outside the midterm territory we were using in the financial guidance outlook. Then on the dealer section, Oli, you want to take it or-

So as we have the target to grow in the U S are towards the 400 is immaterial been pointed out that has.

<unk>, a tariff impact going along with it that's why in the midterm I said I mean that could go up from 150 to 200 basis points, yes, Linda and the longer midterm or I mean towards the end of the decade, I think I mentioned it during the localization section. There is clearly an opportunity here with our next generation GLC to come that could be a <unk>.

Michigan to till that tariff, but I think that is probably a bit outside the mid term territory, we were using in the financial guidance outlook.

And then on the dealer section all of them and you want to take it or.

Oliver Thöne: Maybe I can take it. So first of all, the dealers in China, they are more than just part of the process. There is a very close and intensive partnership, so we work the whole strategy for China hand-in-hand with our dealer partners. That is important 'cause we deploy new formats to acquire customers. We're gonna bring something for the top-end vehicles, which I think is attractive in the customer journey. We complement it with the uplifted digital journey. Now, this is hand-in-hand because also this kind of recalibration of the density of the network is at the benefit of our dealer partners, because it is on the after-sales revenue, and generally on the profitability for the network and uplift.

Maybe I can take it so first of all the dealers.

In China. They are more than just part of the process that there is a very close and intensive partnership. So we walked the whole strategy for China Hunton Hunt with our dealer partners that is important because we deploy new new formats to.

To acquire customers we.

We're going to bring something for the top end vehicles, which I think is attractive in the customer journey, we complement it with the uplifted digital journey now.

This is hand to enhance because also this kind of recalibration of the density of the network is that the benefit of our dealer partners because it is on the on the after sales revenue in general on the profitability for the network and uplift so.

Oliver Thöne: So, I would say we are well on track with the figures Harald presented to proceed.

I would say we are well on track with the figures presented to proceed.

I take one more question in the room, and then I'll give people online the chance to also ask a question heading over to you.

Christina Schenck: I'll take one more question in the room, and then, I'll give people online the chance to also ask a question. Henning, over to you.

Henning Cosman: Yeah, thank you very much. To Harald, please, thanks for being so forthcoming with your bridges. I just have a clarification, please, because I think when you spoke about 26 to the midterm, I think you mentioned 1 percentage point headwind from tariff and FX again, and I just wanted to make sure you actually meant that, or is it from the starting point of 4? Is it just the 4 efficiency and 1.5 volume structure price?

Yes. Thank you very much to Harold please thanks for being so forthcoming with your bridges I just have a clarification. Please because.

When you spoke about.

<unk> 2006 to the midterm.

I think you mentioned, a one percentage point headwind from tariff and FX again, and I just wanted to make sure you actually meant that or is it from the starting point. Therefore is it just the full efficiency and one and a half volume structure price.

Harald Wilhelm: Yeah, to clarify, so the starting point, 26, so the 3 to 5. Again, take the mid-term, the midpoint as a reference, from tariffs and FX, incremental tariffs and FX, and then the 1.5, when we talked in terms of top line volume, mix pricing and BEV, and around 4 on the efficiencies.

To clarify so the starting point 26 of the suite to five again take the midpoint to midpoint as a reference.

A minus 1% from the tariffs and FX incremental tariffs and FX and then the one and a half when we talked in terms of top line volume mix pricing and Beth and around four on the efficiencies. Okay. So another one from for the period for another one okay.

Henning Cosman: Okay, so another one from, for the period from-

Harald Wilhelm: Another one.

Henning Cosman: Okay, thank you.

Thank you Paris and FX, yes.

Harald Wilhelm: Tariffs and FX.

Henning Cosman: Yes. And sorry, that's mainly related to hedges rolling off, yeah? The delayed effect of the FX coming through.

And sorry, and that's menu related to hedges rolling off yeah, the delayed effect of the FX coming through.

Harald Wilhelm: In 2026, I think we're still well covered, also at pretty good rates when it comes to the US dollar and also on the renminbi. So I mean, if current spot and more kind of call it towards the 120 kicks in, and the other currencies, interestingly enough, I mean, only the euro is strong and continue where they are, obviously, that creates some further headwind for the years post to 2026.

26 us anywhere so well covered also at a pretty good rates when it comes to the U S. Dollar and also on the renminbi. So I mean, if current spot and more kind of color.

Call it towards the 120 kicks in.

And the other currencies.

Interesting enough men only the euro is strong.

Uh huh.

And continue where they are obviously that creates some further headway.

Headwind for the years.

Post 26, Thank you and the second question is on China. Please enter the profitability there.

Henning Cosman: Thank you. And the second question on China, please, and the profitability there. I think at the CMD, we talked about trying to protect a double-digit margin. I think you were coming from still 15% or so in 2024. I don't think you probably deliberately didn't give a pinpoint update today. But if we could just talk conceptually, is that going lower before it's starting to go higher? And if you could give any color for profitability between imports and local, if that's a good way to just explore it a little bit further. Thank you.

I think at the CMV, we talked about trying to protect a double digit margin I think you were coming from still 15% or so in 2024, I don't think you probably deliberately didn't give pinpoint.

Pinpoint update today, but if we could just talk.

Conceptually.

Is that going lower before it's starting to go higher and if you could give any color.

<unk> profitability between imports and local.

If that's a good way to just explore it a little bit further thank you.

Christina Schenck: Sure.

<unk>.

Oliver Thöne: We made a slide, which we called We Deliver On The Targets We Promised Here, and in 2025, we still delivered a double-digit margin in the joint venture. 2026, as characterized by all the ramp-ups, it is going to be down year over year. Then we will have, pretty much second half of 2026, and then transitioning into 2027, the benefit of like a vehicle, like the GLE long wheelbase, providing additional profitability. At the same time, we see the facelift cycle for GLC C-Class, which also get their combustion side. What is definitely a topic of intensive work is the profitability in China for the electric vehicles, so this will slightly weigh on the profitability on, in the BBAC.

We made a slight which we called we deliver on the targets. We promised here and in 2025, we we still delivered a double digit margin and the joint venture.

2026, as characterized by all the ramp ups.

It is going to be down year over year.

Then we will have pretty much second half of 2026, and then transitioning into 27 the benefit of like a vehicle like the cheery long wheel base, providing additional profitability at the same time, we see the facelift cycle for G. O C C class, which also get their combustion side.

It.

What is what is definitely a topic of intensive work is the profitability in China for the electric vehicles. So this will slightly way on the profitability on the BVA seat, but that is why we embarked on this mission of a deep localization there taking out cost which is increasing there.

Oliver Thöne: But, that is why we embark on this mission of a deep localization there, taking out cost, which is increasing the resilience on the combustion side, as well as improving the resilience on the electric vehicles. So yes, year over... First, deliver on target for 2025. Second, 2026, slightly down. 2027, we, we will do our best to return to where we were.

Zillions on the combustion side as well as improving the resilience on the electric vehicles. So yes year over first deliver on target for 25.

Second 26 slightly down 27, we are we were we will do our best to return to where we were.

So let's move on to the telephone line, we have questions today, and I would start with public alumina.

Christina Schenck: So, let's move on to the telephone line. We have questions there, and I would start with Patrick Hummel.

Hello, Good morning, Patrick from UBS, Thanks for taking my question.

Patrick Hummel: Hello, good morning. Patrick from UBS. Thanks for taking my questions. My first one would be a clarification about cash returns and DTG, specifically. Harald, thanks for all the color on that specific slide. You highlighted EUR 2 billion of M&A inflows. I was just wondering, Athlon, there were some media articles suggesting that could be worth about EUR 1 billion, some additional German distribution outlets, I guess that's also EUR a few hundred million. So that would leave a relatively small amount for DTG, if you know, the total M&A bucket is about EUR 2 billion. Should we read it that way, or could it just well be if you execute all of these transactions, DTG, Athlon, and the distribution networks, that the M&A-related inflows would exceed EUR 2 billion?

My first one would be a clarification about.

Cash returns and <unk> specifically.

Thanks for all the color on that specific slide you highlighted 2 billion.

M&A inflows I was just wondering ASLAN.

There were some media articles, suggesting that could be worth about 1 billion.

Additional German distribution outlets I guess, that's also a few hundred million dollars. So that would leave a relatively small amount for atg.

The total M&A bucket is about 2 billion should we read it that way or could it just will be if you execute all of these transactions BTG asphalt and the distribution networks that the M&A related inflows would exceed 2 billion euros and would that also directly translate into.

Patrick Hummel: Would that also directly translate into additional cash return to shareholders, or would you say it's the EUR 6 billion that we talked about, EUR 5.1 billion is, is the dividend, and the EUR 1.7 billion remaining from the existing buyback, so whatever happens on the disposal front, the cash return this year won't exceed EUR 6 billion. Am I misreading that? I have a second question then.

The additional cash returned to shareholders or what do you say, it's the 6 billion that we've talked about $5 1 billion is the dividend and the one seven remaining from the existing buyback so whatever happens on the disposal front.

Cash return this year won't exceed 6 billion am I misreading that.

I have one question that thanks, Patrick well spotted.

Harald Wilhelm: Thanks, Patrick. Well spotted. I think the numbers, I mean, you reminded us, I think, correct in terms of Athlon, in terms of the own retail divest potential. I think the EUR 2 billion we put on the chart, I mean, should not be seen as a cap, in terms of cash generation from M&A. Maybe a bit of a prudent approximation. Await the financial statements coming out early March. As I said earlier, you will see assets held for sale. I think that rather gives an indication in terms of the size, so the order of magnitude we have in mind on DT. So does it mean therefore, M&A cash proceeds could be above EUR 2 billion? That could be a distinct possibility.

The numbers I mean, you're reminded us I think youre correct in terms of Athlon terms of.

One retail divest potential and I think of the 2 billion. When you put on the chart men should not be seen as a cap in terms of cash generation from M&A maybe.

Maybe a bit of a prudent Xbox immigration.

A way to financial statements coming out early early March.

As I said earlier, you will see assets held for sale.

I think that'd be a rather gives an indication in terms of the size. So the order of magnitude we have in mind on DT.

So does it mean, therefore M&A cash proceeds could be above 2 billion that could be a distinct possibility, let's talk about it when we're getting there I think the message here is.

Harald Wilhelm: Let's talk about it when we're getting there. I think the message here is a solid underlying cash flow of more than EUR 4 billion on the industrial side, including a significant cash out from the restructuring program. So in terms of underlying cash generation, I think that's a pretty reasonable number. And then this potential of cash generation on top of it. So I think, I mean, the message here in terms of potential for shareholder return and our commitment on shareholder return, I think that should be attractive for investors, and I think that should also be a bridge to look through somehow 2026, while we expand the margin in 2027 forward.

A solid underlying cash flow of more than $4 billion on the industrial side, including a significant cash out from the restructuring program. So in terms of underlying cash generation I think that's a pretty reasonable number and then this potential of cash generation on top of it. So I think I mean, the message here in terms of <unk>.

Tension for shareholder return and our commitment on shareholder return I think that should should be attractive for investors and I think that should also be a bridge.

Two looks who somehow 2026, while we expand the margin in 2007 and forward.

Thank you Howard.

Patrick Hummel: Thank you, Harald. My second question, I guess, is for Matthias or Ola. The next generation A-Class or whatever it's going to be called, when we think back at the Monaco CMD, you basically painted a picture that suggested that, you know, the very low end of your entry segment is not very attractive, neither from a margin standpoint, maybe also not from a CO2 compliance standpoint. So I'm just wondering, what changed your mind? Why do you think you need this model, and what can you do to avoid margin dilution? Is it maybe just that, you know, the cost structures in Rastatt are what they are, and you have to have a certain capacity utilization there?

My second question I guess, it's for <unk> or.

Karla.

The.

Next generation <unk> or whatever it's going to be called.

When we think back at the Monaco CMT U.

Basically painted a picture that suggested that the the very low end of your entry segment is not very attractive either from a margin standpoint, maybe also not from a tier two compliance standpoint.

So I'm just wondering what changed your mind why do you think you need this model and what can you do to avoid margin dilution.

Is it maybe just that.

The cost structure in Russia are what they are and you have to have a certain capacity utilization there or I mean, I get the point about young buyers getting sort of attracted to the brand but the.

Patrick Hummel: Or, I mean, I get the point about young buyers getting sort of attracted to the brand, but you know, the financial impact, at least in the history of that model range, has been rather dilutive. And if you can just share a bit more behind your thought process, why you bring this model back or bring a successor. Thank you.

The financial impact at least in the history of that model range had been.

Broader dilutive and if you can just share a bit more beyond your thought process why you bring this model back or bring a successor. Thank you Pat.

Ola Källenius: Patrick, good to hear from you. I'll do the financial mechanics and let Matthias do the market. Now, we have the MMA architecture fully industrialized, and all the technologies available. And when we looked at this equation again, weighing in what it means for the overall market presence in Europe, and it's really about Europe. For a very reasonable investment amount, very reasonable, and with the variable cost projection that Harald was alluding to, the sum of those financial mechanics said this can meet our lower-end threshold, I would say, Harald. But it does play a role in the market, and I want to let Matthias reflect upon that.

Okay. Good to hear from you all do the financial mechanics, and let our tests to the market now.

Now we have the MMA architecture fully.

Industrialized and all the technologies available.

When we looked at this equation again.

Weighing in what it means for the overall market presence in Europe, and it's really about Europe.

<unk> a very reasonable.

Investment amount very reasonable and where the variable.

Last projection that Harold was eluding to.

The sum of those financial mechanics said this can meet our lower end threshold I would say Harold.

But it does play a role in the market.

I want to let our matis reflect upon that absolutely I mean, Europe as I pointed out in my presentation as well.

Oliver Thöne: Absolutely. I mean, Europe, as I pointed out in my presentation as well, is extremely important for us. It's a market where this segment is being well served, and the A-Class, as it is today, is a vehicle where the average age of our customers is seven years younger than for all other Mercedes-Benz products on average. So that means we have the early opportunity getting younger customers into our vehicles. Plus, and I mentioned the topic of our new unit, we have very attractive downstream business combined with it, so we believe that it absolutely makes sense in Europe to have this product available, including the downstream effect. It will definitely a profitable case and very important for us to get customers acquainted with our brand at the very early beginning.

It's extremely important for us it's a market where the segment is it's being well served and the a class as it is today as a vehicle where the average age of our customer for seven years younger than for all other Mercedes Benz products on average and so that means we have the early opportunity getting young.

Customers into our vehicles, plus and I mentioned the topic of our new unit, we have very attractive downstream business combined with it. So we believe that it absolutely makes sense in Europe to have this product available, including the downstream effect. It will definitely a profitable case and very important for us to get customers.

Acquainted with our brand at the very early beginning.

Ola Källenius: The designers did present us something in 2025. When I saw it, I just thought to myself: It's hot as hell. I want that. That's the irrational part of the equation.

And the design of our state presented us something in 2025, when I saw it I just thought to myself, it's hot as Hell I want that that's the irrational part of the equation your new company content.

Oliver Thöne: Your new company car then.

Ola Källenius: Uh,

[laughter].

Christina Schenck: Okay, we do one last-

Okay, we do one.

Patrick Hummel: Thank you very much.

Christina Schenck: Sorry, Patrick. We do one last question in the room. I'll take a look for hands up. Steven?

Sorry, Patrick we do learn one last question in the room I'll take a look for hands up Steven.

Thank you Stephen Robin from Bernstein in London.

Harald Wilhelm: Thank you. Stephen Reitman from Bernstein in London. Question on China again. Obviously, you talk about the potential of filling the white spaces with the new BEV platforms, that you're coming out with new BEV models like GLC electric and such like. Could you just comment on the research you're doing on the Chinese customers? To what extent the customers have gone away? How much do you expect them to come back? What is the dealers' confidence in the product portfolio, which obviously you've shown to them as during your journey? Thank you.

A question on China again.

Obviously, you're talking about the potential of filling the white spaces with the U b EV platforms that youre coming up with EV models like GLC electric and such like could.

Could you just comment on the research you're doing on the Chinese customers to what extent the customers are going away how much do you expect them to come back what is the dealers confidence in the political party, which obviously you've shown to them is it your journey. Thank.

Thank you.

Most certainly.

Oliver Thöne: Most certainly. Let's talk about the Chinese customer, and obviously, maybe one of the most demanding customers in the world. So on average, for Mercedes, 37, S-Class, 39, I think Maybach just sits directly on 40. If you do a poll on what does Mercedes-Benz still mean for customer groups? It is still, for 65%, an icon of success, and they aspire to own such a car. What is today one of the biggest detractor, if you will, and that is, I guess, where your question is aiming to, the detractor could be intelligence. Can Mercedes offer the same level of ADAS infotainment updatability as they have seen by other competitors? And that is what we have shown today, that with the tech stack we have developed, we close that, so to say, gap, where you have it.

Let's talk about the the Chinese customer and obviously.

One of the most demanding customers in the world. So on average for mosquitoes certainty southern as class 79, I think my about just sits directly on 40.

If you do a poll on what would what this mercy to spend still mean for four customer groups.

It is still 465% an icon of success and they aspire to own such a car.

What is today one of the biggest detractor, if you will and that is I guess, where your question is aiming to the detractor could be intelligence.

Marci this offer the same level of Adas infotainment updates ability as they have seen by other competitors.

And that is what we have shown today that with the tech stack, we have developed we close that.

So to say gap, where youll have at specific vehicles in our portfolio like the E class.

Oliver Thöne: Specific vehicles in our portfolio, like the E-Class, they massively contribute to the highest-

Massively contribute to the higher.

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