Mercedes-benz Group Ag · XETR:MBG
Mercedes-benz — Investor Day (October 2020)
79 slides from Mercedes-benz's investor day presentation, Oct 6, 2020
Slide 1: Mercedes-Benz Strategy Update
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Slide 2: Forward-looking statements notice
The following presentation contains 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 materia
Slide 3: Our statement of intent: build the most desirable cars
Our statement of intent: We will build most desirable cars.
Slide 4: Our refocused strategy
We will deliver on this intent with our refocused strategy Think Focus Expand Embrace Lead Lower and act on customer base customers and in electric cost base like a luxury profitable by growing grow recurrent drive and and improve brand growth sub-brands revenues car software industrial footprint Su
Slide 5: Brand promise: Think and act like a luxury brand
Let us begin with our brand promise Think Focus Expand Embrace Lead Lower and act on customer base customers and in electric cost base like a luxury profitable by growing grow recurrent drive and and improve brand growth sub-brands revenues car software industrial footprint Sustainability as a guidi
Slide 6: Luxury has always been part of our soul
Luxury has always been part of our soul It ties together our values and virtues. Luxury is our home field advantage and our leading edge.
Slide 7: Luxury has always been part of our soul
Luxury has always been part of our soul at each moment in time.
Slide 8: Ambition 2039: luxury of the future will be sustainable
Luxury has always been part of our soul And luxury of the future will be sustainable. Ambition 2039
Slide 9: Luxury is where the growth is
Luxury is where we belong, and luxury is where the growth is Global # of wealthy individuals Per region (private investable wealth > $250k, individuals in million) (private investable wealth >$250k, individuals in million) 95 U.S. 26 45 52 Western Europe 7 12 Greater China 7 20 2019 2030 Source: BCG
Slide 10: Luxury experience across all touchpoints
We will provide the luxury experience across all touchpoints Brand touchpoints Product substance Digital experience
Slide 11: Setting new standards with the S-Class
Setting new standards with the S-Class
Slide 12: Summing up pillar: luxury grows economic value
Summing up pillar 1 Luxury is who we are and we will use it to grow economic value.
Slide 13: Focus on profitable growth pillar
Think Focus Expand Embrace Lead Lower and act on customer base customers and in electric cost base like a luxury profitable by growing grow recurrent drive and and improve brand growth sub-brands revenues car software industrial footprint Sustainability as a guiding principle Driven by a highly qual
Slide 14: We will focus on profitable growth
We will focus on profitable growth Profit Price Portfolio Rethink volume ambitions Reorientate pricing Reshape future product profitability first and channel mix portfolio to optimize returns #1 Profit Price Volume
Slide 15: Rethink volume ambitions: Profitability first
Rethink volume ambitions: Profitability first Reinforce our contribution margins with current portfolio shifting upwards over time Ensure volume targets focus on the most profitable models and regions
Slide 16: Reorientate pricing and channel mix
Reorientate pricing and channel mix Markets primarily measured on sales contribution growth Enhance positioning with optimized product substance Manage residual values to determine new car supply Get stricter about channel mix Improve lifecycle pricing
Slide 17: Reshape product portfolio
Reshape product portfolio: We will refocus product development resources to grow in the most profitable parts of our relevant segments Overall global car market 1 Premium segment 2 Luxury segment 3 will grow will grow faster will grow fastest 4.2 1.2 1.7 CAGR sales 2019-2030 CAGR sales 2019-2030 CAG
Slide 18: We will pursue higher portfolio profitability
Summing up pillar 2 We will pursue higher portfolio profitability.
Slide 19: Target profitable customer segments
Let us explain how we will further target profitable customer segments Think Focus Expand Embrace Lead Lower and act on customer base customers and in electric cost base like a luxury profitable by growing grow recurrent drive and and improve brand growth sub-brands revenues car software industrial
Slide 20: Mercedes-Benz is our master brand
Mercedes-Benz is our master brand and will always be our guiding star luxury car brand 1 1 Interbrand
Slide 21: Rapid and highly profitable growth
Rapid and highly profitable growth Sales volume in k units CAGR 2011-2019 12 7% 3 1 32 23% 4 9 15 2 113 27% 4 62 6 17 2011 2015 2019 1 G-Class without model 461; 2 AMG without G63; 3 Maybach CAGR (2015-2019) ; 4 CAGR of AMG and G-Class with G63 (double counting)
Slide 22: Global opportunity, increasing demand
N Sales actuals 2019 Demand ahead of capacity Sales vs. key competitor 2019 Capacity constrained AMG Gr. China Overseas Europe N.A. 2013 2019 U.S. Gr. China GB Global opportunity Increasing demand Conquest potential
Slide 23: Our sub-brands will target specific tribes
Our sub-brands will allow us to target specific “tribes” better “Brands need to light the fire we can gather around...” JP Kuehlwein
Slide 24: We will unlock the potential of our sub-brands
We will unlock the potential of our sub-brands Mercedes-Benz Modern Luxury Performance Sophisticated Adventurous Progressive Luxury Luxury Luxury Luxury
Slide 25: Clear growth plan for every sub-brand
Clear growth plan for every sub-brand Brand Maturity Taking it to the next level Growing the legend Unlocking the potential Addressing a new audience Time
Slide 26: AMG: Significant growth and high-performance electrification
AMG: Significant growth and high-performance electrification
Slide 27: AMG and Formula 1 links intensify in 2021
In 2021, the links between AMG and Formula 1 will intensify
Slide 28: Maybach: Global opportunity, double in size, go electric
Maybach: Global opportunity, double in size, go electric
Slide 29: G: Grow the legend, go electric
G: Grow the legend, go electric
Slide 30: EQ: Addressing a new audience
EQ: Addressing a new audience
Slide 31: Substantial EBIT growth via sub-brands
Summing up pillar 3 We will seek substantial EBIT growth via our sub-brands.
Slide 32: Our lifetime approach to customers
Pillar number four our lifetime approach to customers Think Focus Expand Embrace Lead Lower and act on customer base customers and in electric cost base like a luxury profitable by growing grow recurrent drive and and improve brand growth sub-brands revenues car software industrial footprint Sustain
Slide 33: The value of monogamy: life-long customer relationships
The value of monogamy: Life-long relationships with our customers
Slide 34: Owning the customer relationship
It‘s about owning the customer relationship and leveraging our car parc and customer base Embrace customers Grow recurrent revenues Physical Direct Data-driven Service & parts Digital services retail sales connection business business Luxury experience, Significant Personalized Still significant pro
Slide 35: Owning the customer relationship: targets
It‘s about owning the customer relationship and leveraging our car parc and customer base Embrace customers Grow recurrent revenues Physical Direct Data-driven Service & parts Digital services retail sales connection business business 67% 25% +20% 80% 1 bn. would pay more for a online sales customer
Slide 36: Summing up pillar: valuable customer bases
Summing up pillar 4 valuable customer bases we intend to make the most of it.
Slide 37: Our technology strategy
Now talk about our technology strategy Think Focus Expand Embrace Lead Lower and act on customer base customers and in electric cost base like a luxury profitable by growing grow recurrent drive and and improve brand growth sub-brands revenues car software industrial footprint Sustainability as a gu
Slide 38: Ambition 2039: societal responsibility
Ambition 2039: Our societal responsibility 2022 2030 2039 Carbon-neutral >50% xEV share Carbon-neutral production globally will follow our ambition
Slide 39: Our economic responsibility
Our economic responsibility Our challenge Our answer Contribution margins on EVs Driving down powertrain costs Technology and eDrive investments Intelligent platform strategy Legacy activities Clear plan for the transition 39
Slide 40: Our path to higher EV profitability
Our path to higher EV profitability Costs of batteries coming down faster than originally expected Other measures ( Significantly below €100/kWh system level by mid-decade (cell/module/system) Simplified Modular Strategy will drive economies of scale Partnerships and supply secured beyond 2025 Targe
Slide 41: Our aim is to lead in electric drive
Our aim is to lead in electric drive We will rapidly We will accelerate We will offer a expand our portfolio of range and efficiency state of the art luxury xEVs charging experience We will build the world‘s most desirable electric cars
Slide 42: Taking the lead in EV with a true luxury experience
Aiming to take the lead in EV with a true Mercedes-Benz luxury experience – the combination of aesthetics and technology Quality & Luxury Sublime World class Exceptional digital craftsmanship refinement ride & drive safety experience
Slide 43: We will rapidly expand our electric portfolio
An electric future: We will rapidly expand our electric portfolio > 20 BEV < 25 PHEV xEV share >50% > 10 BEV with very high > 25 PHEV flexibility > 5 BEV > 20 PHEV Increase of xEV models1 2021 2025 2030 1 MB xEV models, incl. EQV and T-Class, w/o smart
Slide 44: Reducing combustion engine variants
An electric future: We will significantly reduce our combustion engine variants Reduced by -40% Reduced by -70% Reduction in variants of combustion engines 2020 2025 2030
Slide 45: Attractive PHEV products support CO2 targets
Attractive PHEV products will support reaching CO2 targets Range in km1 E-Class S-Class (China) 100 GLE-Class 100km Compact 98km Class Best competitor Best 74km competitor 50 Best Best competitor competitor Charging Alternating current (AC) High Speed Charging (DC) Compact Full Size SUV Full Size La
Slide 46: Committed to dedicated electric architectures
We are fully committed to dedicated electric architectures Today Powertrain flexible architecture EQC EQA EQB Dedicated large electric platform (EVA) EQS EQE EQS SUV EQE SUV Dedicated compact and mid-size electric platform (MMA)1 Stay tuned! 1 Electric skateboard, intelligent modular strategy with b
Slide 47: EVA platform for large cars launching 2021
Launching in 2021: Our dedicated EVA platform for large cars will deliver high-tech performance and luxury Dedicated electric skateboard True luxury experience; architecture exceptionally quiet ride Proprietary Mercedes >700 km e-drive technology WLTP range Production in Germany, Up to 500kw China a
Slide 48: MMA compact and mid-size electric platform
The next step: MMA compact and mid-size car electric platform uncompromising -architecture and modules Exceptional range Very competitive e-drivetrain costs Benchmark high Luxury: aiming to offer power charging best noise and comfort in the industry Highly energy efficient State-of-the-art digital d
Slide 49: Range through efficiency
Range through efficiency: Focus on all relevant levers and total vehicle optimization Cd & front surface Drivetrain efficiency Auxiliaries Rolling mass resistance
Slide 50: Next generation e-drive unit developed in-house
Next generation of our e-drive unit developed in-house Electric-motor 2 speed gearbox 1 PMSM-technology Best cost-efficiency-ratio on system level Increase active diameter In 2nd gear one planetary gear active Optimized oil cooling concept Dog clutch to reduce drag loss Scalable e-motor length SiC-I
Slide 51: In-house battery R&D and strategic partners
Mercedes-Benz has extensive in-house battery R&D, and also works closely with key strategic development partners Next-gen battery development Cell format and production Simulation - speed up battery development - Continuous assessment of different cell architectures Improvement of simulation methods
Slide 52: Careful capital allocation in batteries
Careful capital allocation: We drive innovation via in-house R&D and partnerships but leverage strategic suppliers for cell production Cell Module Battery Pack In-house R&D In-house Production In-house Production AND Partnerships Supplier Supplier
Slide 53: Seamless EV-charging software experience
Our software delivers a seamless and easy EV-charging experience 80% of public infrastructure is accessible via Mercedes me in almost all markets Over 350,000 charging stations worldwide one contract, one invoice
Slide 54: >250 km in 15 min
The new EQS will offer high speed charging, enabling long distance capability >250 km in 15 min 1 1 Preliminary forecast based on WLTP indicated range
Slide 55: VISION EQXX: Range towards the next frontier
Range: Towards the next frontier CHALLENGE TO OUR ENGINEERS: • The most efficient EV ever build • 4 door Mercedes-Benz design • < 10kWh/100km • Ultra sophisticated eDrive • Halo Car as early enabler for series • New high speed working model in RD VISION EQXX • Cooperation with Formula 1/E (UK) • Pio
Slide 56: Our software strategy
Now let us explain our software strategy Think Focus Expand Embrace Lead Lower and act on customer base customers and in electric cost base like a luxury profitable by growing grow recurrent drive and and improve brand growth sub-brands revenues car software industrial footprint Sustainability as a
Slide 57: Strides in software competence
We have already made huge strides in our software competence and technology offer MBUX Software ADAS Software Battery Management Software
Slide 58: Digital user experience in the S-Class
The digital user experience in the S-Class sets new standards Crystal clear Biometric Natural voice OLED display and authentification interaction in 3D instrument cluster for personalized settings 27 languages Over Augmented Intuitive Personalized the Air Reality gesture infotainment updates head-up
Slide 59: Taking automated driving to the next level in 2021
In 2021, we aim to take automated driving to the next level L3 Drive Pilot 1 L4-ready Parking System: 2 Intelligent Park Pilot incl. 3D view OTA-based learning Augmented Reality Automated Driving functions Automated Driving experience 1 L3 System according to ALKS, planned for Germany first; 2 This
Slide 60: L3 S-Class technology suite
L3 S-Class: Technology suite including LIDAR and high definition maps Precise HD maps Benchmark and positioning cameras LiDAR Microphone sensors Long range / Redundant actuation short range radars Road condition sensor and service
Slide 61: Which software path to choose?
Decision time for the industry: Which software path to choose? Proprietary OS Outsourced OS
Slide 62: Proprietary operating system benefits
Our own proprietary operating system will deliver an extraordinary customer experience Compelling luxury experience Scalable, lower variable costs Speed of execution Lower complexity Higher customer loyalty Recurrent revenues 62
Slide 63: What exactly is MB.OS?
What exactly is MB.OS? And what will Mercedes-Benz develop? Vehicle software Vehicle hardware Cloud/ IoT Frontend Layer Sourced from suppliers 100% in-house 5 domains: but chipset specifications Applications Layer Drive train defined by Mercedes-Benz (key strategic partners) Mainly in-house 1 Autono
Slide 64: Delivering MB.OS by 2024 via development network
We will deliver MB.OS by 2024 by further expanding our international software development network 24 hours from idea to new function as prototype Seattle Berlin Stuttgart Tel Aviv Beijing Seoul Tokyo 3 months to series release Sunnyvale Bangalore 64
Slide 65: Co-inventing: Teaming up with the best
Co-inventing: Teaming up with the best
Slide 66: Summing up pillar: electric drive and proprietary software
Summing up pillar 5 Leadership in electric drive and proprietary car software will be essential for our future success.
Slide 67: Lower cost base and improve industrial footprint
Think Focus Expand Embrace Lead Lower and act on customer base customers and in electric cost base like a luxury profitable by growing grow recurrent drive and and improve brand growth sub-brands revenues car software industrial footprint Sustainability as a guiding principle Driven by a highly qual
Slide 68: The challenges are clear
The challenges are clear Our initial challenge got reinforced and amplified. Revenue Revenue Revenue COVID-19 Electrification & CO2 measures Cost & Capacity Growth Cost & Capacity Growth Cost & Capacity Growth
Slide 69: Our break-even point is too high
Our break-even point is too high Sales MB cars EBIT MB cars in units adjusted in bn. Pre-/post- COVID-19 measures 2019 2011 2011 2020
Slide 70: Stepped up cost reduction and capacity adjustment
In response we have stepped up our cost reduction and capacity adjustment measures Significant short-term cost reduction and cash preservation measures implemented and being continued Substantial cost reduction and capacity adjustment measures to lower break-even point initiated: - CAPEX and R&D - F
Slide 71: Indicators of change
Indicators of change Q2 Sales Accelerating headcount reduction Increase in exit packages signed 409,000 Headcount (rounded) Contracts signed, cumulated MB cars (-29% vs. py) 173,400 in units 1,100 -3,800 170,600 169,600 530 100 Q2 EBIT 12/2019 08/2020 03/20 06/20 08/20 MB AG in mn. , adjusted -284 F
Slide 72: We will lower CAPEX and R&D
We will lower CAPEX and R&D Key levers Reduction of platforms/portfolio, and vehicle complexity > -20% Reduced spending on conventional powertrain and highly standardized EV architectures Streamlined industrial footprint Absolute year by year 2019 2020 2021 2022 2023 2024 2025 for CAPEX and R&D (not
Slide 73: We will significantly reduce our fixed costs
We will significantly reduce our fixed costs Comprehensive fixed cost optimization scope, including Absolute fixed cost reduction Personnel cost reduction targets continued > -20% through to 2025 Adjustment of production capacity Structural change in marketing & sales Sustainable implementation of C
Slide 74: We will reduce variable costs
We will reduce variable costs to mitigate CO2 burden Comprehensive optimization of all external and internal variable cost levers, including Increased saving targets for material costs Ambitious targets for variable manufacturing costs Reduction of variable sales costs 2019 2020 2021 2022 2023 2024
Slide 75: Lower cost base and improve industrial footprint
We have initiated a series of transformational actions to drive down costs Lower cost base and improve industrial footprint Operational Supply Portfolio and complexity Performance Future footprint strategy reduction culture sales setup Powertrain Global engineering E2E processes and IT and Governanc
Slide 76: Our financial ambitions for MB AG 2025
Our financial ambitions for MB AG 2025 Market environment/revenues Contribution margin Profitable growth Fixed costs > -20% vs. 2019 > -20% vs. 2019 > -20% vs. 2019 CAPEX and R&D (CF impact) > -20% vs. 2019 > -20% vs. 2019 > -20% vs. 2019 RoS MB AG Mid to high single digit High single digit Double d
Slide 77: In summary: Our refocused strategy
In summary: Our refocused strategy Think Focus Expand Embrace Lead Lower and act on customer base customers and in electric cost base like a luxury profitable by growing grow recurrent drive and and improve brand growth sub-brands revenues car software industrial footprint Grow economic Higher portf
Slide 78: In summary: Our refocused strategy
In summary: Our refocused strategy Think Focus Expand Embrace Lead Lower and act on customer base customers and in electric cost base like a luxury profitable by growing grow recurrent drive and and improve brand growth sub-brands revenues car software industrial footprint Sustainability as a guidin
Slide 79: Disclaimer
Disclaimer This document contains forward-looking statements that reflect our current views about future events. The words and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global