Mercedes tops 500 million euros in sales by 2023 – a first in F1

Mercedes-Benz Grand Prix Ltd., which runs the F1 team, reported a revenue in 2023 of £546.5 million, covering the year ending 31st December 2023.

This figure represents an increase of £71.9 million compared to the 2022 figure, which was £474.6 million. For comparison, Red Bull Technology, the company behind the Red Bull F1 team, achieved a turnover of £385.6 million in 2022.

However, despite the increase in turnover at Mercedes, the company based in Brackley reported a slight decrease in its profits, down to 83.8 million pounds compared to the 89.7 million pounds declared in 2022.

This is the result of a combination of factors which include both an increase in costs and higher tax payments during the 2023 financial year. Monoplane development assets that are deferred to the following season increased from GBP 41 million in 2022 to GBP 52.2 million last year.

This higher figure included in part the additional investment needed to change its F1 2024 challenger, which required a new chassis for this season.

The figure of 52.2 million pounds sterling also includes the initial work that the team was able to carry out to produce the gearbox and suspension parts for 2023, which were supplied to the customer, Williams, this year, and which were able to be completed before the 2024 components used by Aston Martin.

An increase also at the level of resources

Mercedes also reported a strong increase in average staff numbers, rising from 175 to 1,289 last year, compared to 1,114 in 2022.

This led to an increase in its wage bill from £29.6 million to £111.7 million compared to the £82.1 million reported in 2022. Although part of this is due to an increase in staff bonuses paid to the team finishing second in the constructors’ championship rather than third place in the previous season. Some tax elements also played a role in the final profit calculation.

The team’s figures for 2022 included a deferred tax asset, which meant that its profits last year were very good. This, combined with the government raising the corporate tax rate to 25% in April 2023 from 19% in 2022, means that Mercedes’ bill has jumped by £23.7 million, rising from £8.6 million in 2022 to £32.5 million last year.

The contrast in tax payments from one year to the next had a significant impact on overall profit, but the company seems to be built on a very solid foundation with its EBIT (earnings before interest and taxes) remaining fairly stable. It stood at £113.8 million for the year ended in 2023, compared to £113.6 million in 2022.

A decrease in media coverage

If Mercedes finished the 2023 season in second place in the F1 constructors’ championship behind Red Bull, thus improving its performance from 2022, it also reported a decrease in the media coverage it received on television as it achieved fewer podiums. However, other factors experienced strong growth.

In a statement included in the file, Mercedes declared: “The team’s television coverage share showed a slight decrease to 14.7% for 2023, reflecting the lower number of podiums the team benefited from compared to 2022.”

« The cumulative advertising value equivalent (AVE) remained strong for commercial partners and shareholders, at $5.3 billion. The team continued to grow significantly on social networks, with a cumulative number of 36 million followers (+15%) and a total of 465 million engagements (+9%). »

« During the year 2023, the team welcomed seven new business partners and introduced a world-class hospitality offer at the Las Vegas Grand Prix, in response to the growing demand for VIP race participation as F1 continues to grow globally. In July, Forbes estimated the team’s value at 3.8 billion dollars. »