Despite "exceptional" uncertainty, Mercedes' share price increases by 5% due to share buyback.

• The company cautioned that the availability of essential parts is a major threat, and that there is a high level of uncertainty regarding international politics and trade agreements.
• The full-year EBIT figure was 19.66 billion euros, slightly ahead of consensus expectations, with fourth-quarter EBIT coming in at 4.33 billion euros.
• The group declared a new share buyback program worth up to 3 billion euros, which would result in the cancellation of the repurchased shares.

Despite warning of "exceptional" risks in the year ahead, shares of the German carmaker gained around 5% on Thursday after beating fourth-quarter earnings expectations and announcing a new share buyback program.

The full-year EBIT figure was 19.66 billion euros, slightly ahead of consensus expectations, with fourth-quarter EBIT coming in at 4.33 billion euros. Revenues increased by 2% in 2023 to 153.2 billion euros from 150 billion the previous year.

The group declared a new share buyback program worth up to 3 billion euros, which would result in the cancellation of the repurchased shares.

Mercedes-Benz has identified supply chain bottlenecks for critical components as a significant risk factor, and stated that an "exceptional degree of uncertainty" surrounds geopolitical events and trade policy, particularly in the context of the Russia-Ukraine and Middle East conflicts and tensions between Western powers and China.

In 2024, the company anticipates flat growth due to inflation and supply chain costs, while Mercedes-Benz Cars' adjusted return on sales is projected to decrease from 12-14% to a range of 10% to 12%.

Jefferies' automotive analysts stated in a reactive note on Thursday that the earnings did not contain any major surprises, but the cash return policy was a sign of confidence and aligned with the premium/luxury positioning, indicating that buyback would continue to boost EPS.

On Thursday, Ola Källenius, Chairman of Mercedes-Benz, stated to CNBC that the company was well-equipped to handle the challenges posed by the macroeconomic environment.

He stated that today Mercedes-Benz Cars presented very impressive figures, and that the light commercial van division had an outstanding year.

The revenue of Mercedes-Benz Vans increased by 18% year-on-year to 20.3 billion euros, and adjusted EBIT jumped by 59% to 3.1 billion euros, with unit sales also climbing by 8% to a record 447,800 units.

In the second half of 2023, supply constraints affected the company, and this trend will continue in the first quarter of 2024, as noted by Yet Källenius.

We are currently addressing the issues we faced with our partner by increasing capacity that was previously prepared. By the end of the first quarter, we anticipate resolving these problems, allowing us to return to a more normal supply situation in the second quarter.

Despite the challenging macroeconomic environment, including escalating conflict and geopolitical tensions, high interest rates, and structural economic headwinds in China, Mercedes will not reduce its investments in future development, according to Källenius.

Although we're not withdrawing from any market, we always strive to maximize our potential in the over 150 countries where we operate, and we're not reducing our investments, he stated to CNBC's Annette Weisbach.

Källenius stated that the company is currently experiencing the highest level of investment in its history, with plans to launch a new generation of products, including battery electric vehicles, starting in 2025 and continuing through 2026 and beyond.

We are progressing rapidly in the development of new technologies, innovations, and a diverse range of products for the future.